CBO Releases Latest Budget Forecast: Hilarity Ensues

Tyler Durden's picture

We won't spend any time discussing the accuracy of the "impartial" Congressional Budget Office: we already did that in August 2011 when we showed that back in 2001 the CBO forecast total 2011 public debt would be negative $2.4 trillion; instead the real number was positive $10.4 trillion, a delta of only $12.8 trillion. We also won't spend much time on the just released CBO headline grabbing projection that the 2013 budget deficit will be under $1 trillion, or $845 billion to be precise. Instead we will show the progression of the CBO's baseline forecasts for the period 2012 and onward. We will also note that the now-forecast 2013 budget deficit of $845 billion was supposed to be a deficit of just $585 billion one short year ago, a token 40%+ error rate, but in the immortal words of Hillary Clinton: "who cares." Of course we should note that if we apply the same forecast error to the 2013 budget, it means the real final deficit print will be $1.2 trillion - just a tad more realistic. Finally, we will certainly note that while the CBO believes 2013 may see the first sub $1 trillion deficit in 4 years, a number which will decline modestly in the coming years, the deficit then proceeds to grow and grow and grow, until we reach 2024, at which point the US deficit returns to $1 trillion once again... and never gets smaller. And this is the optimistic version.

The chart below shows the progression of the CBO's Optimism in the past 4 years. The black line is the most disturbing one, if not so much for Obama whose second and (for now) final term ends in 2016, then certainly for the unlucky sod who gets to follow in his footsteps.

The epic implosion toward the end of the forecast period can be confirmed by looking at the CBO-forecast annual change in debt held by the public: it drops to just $949 billion in 2013, declines to 2015, then just pulls a Birinyi ruler, and hits $1+ trillion in 2022 and never drops.

What happens next? Well, the CBO did not provide an extended Long-Term Budget outlook beyond 2023 just yet. For that we will have to go back to the last time it did, in June 2012. The summary is shown below. We will merely note that as of this moment, the "Extended Alternative Fiscal Scenario" is the baseline.

We let readers do the math.

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firstdivision's picture

Can anyone point me towards what home price index was released today that is levetating the markets?  MarketWatch is using that as a reason for today's up print.

AlaricBalth's picture

Unfunded liability estimates range from $55 - $220 trillion over the next 20 years.
Can't wait to see the printfest which will satisfy those obligations.

centerline's picture

Reduction in liabilities is more likely what is coming.

TerminalDebt's picture

I was led to believe there would be no math.

Where' my foodstamps?

Say What Again's picture

Washington is so out of control its hard to believe their rhetoric if for real.  This is really starting to sound like a second-rate sci-fi movie.

Midas's picture

Plan 10 from Outer Space?

TruthInSunshine's picture

Choomwagon tax is supposed to provide revenue +387 billion USD annually, which is largely responsible for the offset of the 1.2 trillion as now forecasted by CBO.

smlbizman's picture

 ....when an oppurtunity to gain revenue, on lets say something like... BETTING ON THE SUPERBOWL!!!,.... is ignored by the feds, is it because the only way they know how to collect is at the end of a gun.....or do they just like keeping us in our place.....i bet, from the money raised from their cut of the vig....ospender could send michelle and 5,000 of her closest friends for a weekend at bernies...

gaoptimize's picture

No, "Phase IV" ( http://www.imdb.com/title/tt0070531/ ) with the leftist as the ants.

Poetic injustice's picture

Shooting liabilities or sending them to camp or prison, so they work for free?

I believe in second option, as TPTB just love free slave labor.

AGuy's picture

Not to worry, The Gov't Bean counters are working on how to divide by zero. Once the math is worked out, The US budget will be smooth sailing until our sun swells into a red giant!


Nothing To See Here's picture

Here here! And can anyone point me to a chart published on this fine site sometime last year, showing the timeline of ECB's intervention in the euro crisis and their effects on markets?

redpill's picture

I'm turning Japanese

I think I'm turning Japanese

I really think so

Turning Japanese

I think I'm turning Japanese

I really think so

Hippocratic Oaf's picture

Fuck yea we're turning Japanese.

See what zero interest rate results in?

Fuck the fed and mark to market you mother fuckers!

You can't save everything!!!!! Let shit fail!!!!!!!

adr's picture

That song was about masturbation.

If we are turning Japanese now, I think it has been rubbed clean off, but at least we'll die happy, right?

Orly's picture

They say that a stitch in time saves nine.

They say I'd better stop, or I'll go blind...


Ah!  She-bop, she-bop!


Orly's picture

Not bad, not bad.

Missed it by that much!  The time is coming, though.

And, by the way, I didn't hear you give a counter-offer, so who wore the huevos on that thread, eh?


fuu's picture

As I have learned over the years that putting your chestnuts in the fire is what gets them burnt, I leave the predictions to the prophets. I just stack.

Orly's picture

Well, you keep "stacking" and just admit that I was right and have it done with.





And guess what?







Now, anything eltse, Mr. Smarty-Pants?


fuu's picture

You called 1564 by the end of January, it didn't go there.


But you can go on pretending you weren't, that would be your prerogative. Pretty typical of gurus actually.


NEOSERF's picture

Will come in at $219T which will be a "beat"...Dow hits 30,000

NotApplicable's picture

You forgot to add the #winning tag.

Buck Johnson's picture

Those people will be dead or out of office when that hits, that is why they don't care.  This whole game is coming to a conclusion that all in govt. and in the media knows will be bad. 

mightycluck's picture

I saw this yesterday. Not sure if this is what you are referring to. But housing is levitating thanks to the Fed.  All others RUN!!!!!


ZippyBananaPants's picture

The market is up because banks are buying market with 85 billion per month.  no other reason.

ejmoosa's picture

And that will feed right into the class warfare arguments that Obama will make, as the rich are obviously getting richer.

adr's picture

Well my house just lost $10k in value in one week since my neighbors put thier house up for sale for $10k less than what my home appraised for two months ago.

But yeah, keep believing the home price index lie.

I guess I should have bought in the ghetto. I could have paid $1500 and seen a 300% increase to $4500. WOW!!!! I'D BE RICH BEOTCH!!!!

So the ghetto rises 300% and my home declines 25% in the same time period. The price index would show a percentage rise, but the loss on my home of $28k is a bit larger than the $3,000 gain of the ghetto home.

Reality is a fucking bitch. I use the scenario above whenever an asshole realtor says housing is going gangbusters.

FEDbuster's picture

Just think when someone flips a house in Detroit that cost them $1. for say $5,000. after a couple grand in repairs?  What does that do to the "numbers"?

Kiwi Pete's picture

Don't count your losses too soon adr. It may well sell above asking price if it is being pitched low. That's a common selling strategy over here anyway.

firstdivision's picture

Fuck Case-Shiller, I'm using this for my investing thesis.


Banksters's picture

Don't worry, if the Fed weren't monetizing debt, the buyers for US treasuries and MBS would be endless.  TRIPLE A TRIPLE A


Sarc off.  



koder's picture

Wake me when the EBT cards stop working.

Joe Davola's picture

Set your alarm for approximately 2 weeks after guns have been confiscated.

Osmium's picture

If they want my guns they will need to find them at the bottom of the lake where they were lost in that boating accident. 

nightshiftsucks's picture

If they want my guns they will have to catch all of the lead first,,,,,moving at 1200fps

ejmoosa's picture

Better be a wind-up alarm.  Because I know that the power will have been cut by that point...

ar01's picture

The CBO is forecasting ~10% more revenue this year -- where is that coming from exactly? 

blu's picture

The rape and pillage of Canada.

FoeHammer's picture

Rape and pillage of the World's citizens.

Fixed it for ya!

fuu's picture

Hookers and blow tax.

blu's picture

They just do it for the lulz.

Planner 1: "Hey I know let's put some random shit in this report and see what those limp dicks at Zerohedge do with it!"

Planner 2: "U mad bro."

Planner 3: "Last time they ripped us a new asshole."

Planner 1: "So what? We're full of assholes around here."

Planner 2: "Okay I did it. They are totally gonna go all WTF??!!11!?OMGbuygold"

FEDbuster's picture

When you pull numbers out of your ass, a new asshole isn't such a bad thing.  New asshole, new numbers which we call revisions.

Hell Japan went so far to get a new Finance asshole, named Aso.

Orly's picture

...famous for having said that all old Japanese should just hurry up and die.


FEDbuster's picture

At least he had the balls to say it outloud.  Here they just wish it and work with DoD and CDC to make it happen.

youngman's picture

In this case ...the devil really is in the details.....what assumptions did they use???? but it will make the nighttime news...headlines tomorrow...and on the campaign trail....life is good when you control the propaganda...and combine that with a politician that can lie with a smile....well..you get what we have...

LongSoupLine's picture

I'd call them fucking idiots, but the CBO is simply a group of fucking propagandist crooks.


Fuck you Congress.  fucking fullretard assholes.

Bay of Pigs's picture

Tyler, please don't confuse me with the facts.

thecoloredsky's picture

You have to spend money today to save money tomorrow. Am I right?