Speaking Of "Credibility", Here Is The CBO's 2001 Forecast Which Predicted Negative $2.5 Trillion Net Debt In 2011

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Sat, 08/06/2011 - 22:09 | 1532144 FidelityBoy
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Credibility Bitchez (whatever that means!)

Sun, 08/07/2011 - 01:19 | 1532251 Pladizow
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Due to the current financial situation caused by the slowdown in the economy, Congress has decided to implement a scheme to put workers of 50 years of age and above on early, mandatory retirement, thus creating jobs and reducing unemployment.

This scheme will be known as RAPE (Retire Aged People Early).

Persons selected to be RAPED can apply to Congress to be considered for the SHAFT program (Special Help After Forced Termination).

Persons who have been RAPED and SHAFTED will be reviewed under the SCREW program (System Covering Retired-Early Workers).

A person may be RAPED once, SHAFTED twice and SCREWED as many times as Congress deems appropriate.

Persons who have been RAPED could get AIDS (Additional Income for Dependents & Spouse) or HERPES (Half Earnings for Retired Personnel Early Severance).

Obviously persons who have AIDS or HERPES will not be SHAFTED or SCREWED any further by Congress.

Persons who are not RAPED and are staying on will receive as much SHIT (Special High Intensity Training) as possible. Congress has always prided themselves on the amount of SHIT they give our citizens.

Should you feel that you do not receive enough SHIT, please bring this to the attention of your Congressman, who has been trained to give you all the SHIT you can handle.


The Committee for Economic Value of Individual Lives (E.V.I.L.)

PS - Due to recent budget cuts and the rising cost of electricity, gas and oil, as well as current market conditions, the Light at the End of the Tunnel has been turned off.

Sun, 08/07/2011 - 06:08 | 1532399 spiral_eyes
Sat, 08/06/2011 - 22:37 | 1532148 hedgeless_horseman
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...we most certainly won't comment on the idiocy of the Treasury chastising someone, anyone, for erring, or disputing, forecasts.

I will.  Exhibit A.

For the output effects of the recovery package, we started by averaging the multipliers for increases 

in government spending and tax cuts from a leading private forecasting firm and the Federal 

Reserve’s FRB/US model.  The two sets of multipliers are similar and are broadly in line with other 

estimates.  We considered multipliers for the case where the federal funds rate remains constant, 

rather than the usual case where the Federal Reserve raises the funds rate in response to fiscal 

expansion, on the grounds that the funds rate is likely to be at or near its lower bound of zero for 

the foreseeable future.  



Sat, 08/06/2011 - 22:28 | 1532154 Caviar Emptor
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Ministry of Unicorns

Sat, 08/06/2011 - 22:28 | 1532156 Belrev
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If these forecasts were true over the past 10 years, I would have been a millionaire by now and retired. Instead I am here on ZH.

Sun, 08/07/2011 - 01:09 | 1532237 Doña K
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Retirement is an illusion. And many millionaires do read zero hedge.

Sun, 08/07/2011 - 11:10 | 1532505 cossack55
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Of course. They wish to know when to secure the gates and when to hire more mercs.

Sat, 08/06/2011 - 22:29 | 1532157 buzzsaw99
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bonds should be rated by what the chances are i will get my freaking money back and that's it. the s&p is the banksta's bitchez and a political pawn making a politcal statement. zero credibility.

Sun, 08/07/2011 - 01:14 | 1532243 Doña K
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It's all a game. They (?) will collapse Europe and then buy it with inflated dollars. There is a quadrilateral financial war going on.

Sat, 08/06/2011 - 22:34 | 1532167 Freebird
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Hey, anyone know a more articulate way of saying that things are well & truly fucked?

Sun, 08/07/2011 - 01:42 | 1532271 papaswamp
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Sun, 08/07/2011 - 04:49 | 1532371 Yen Cross
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 You grew some balls!

Sun, 08/07/2011 - 06:28 | 1532414 A Nanny Moose
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...big time.

Sun, 08/07/2011 - 11:11 | 1532507 cossack55
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Sun, 08/07/2011 - 01:51 | 1532280 Fedophile
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Proper fucked.

Sun, 08/07/2011 - 06:10 | 1532404 jabu
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Ingsthay areyay ellway andyay ulleytrey uckedfay!



Sat, 08/06/2011 - 22:41 | 1532178 gwar5
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Those CBO numbers were the good old days, for sure. Where have they all gone?

"Where are the blossoms of those summers?  Fallen, one by one; so all of my family departed, each in his turn, to the land of the spirits. I am on the hilltop and must go down into the valley; and when Uncas follows in my footsteps, there will no longer be any of the blood of the Sagamores, for my boy is the last of the Mohicans."

-- Chingachgook, last of the Mohicans

Sun, 08/07/2011 - 00:13 | 1532189 FinalCollapse
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Why laughing - the only thing that Economics Ph.D can do is the straight line extrapolation. 

Sun, 08/07/2011 - 00:38 | 1532210 gmj
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Multiple typo alert:  the article says negative $2,436 trillion.  The number in the table is negative $2,346 billion.

Sun, 08/07/2011 - 01:23 | 1532257 knukles
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See, see.  There it is.... the error which birthed the histronics between S&P and the What House.
Pure elegance.
What are a bazillion zeros amongst friends?

The numbers are so fucking huge, they don't mean anything, anymore.
And the politicians don't give a shit.  The numbers are ancillary to the bull shit process.
Charades.  All fucking charades.

Sun, 08/07/2011 - 02:16 | 1532298 Libertarian777
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reader alert.


article states 2 POINT 436 trillion, which is correct (in US and UK nomenclature, in Europe this would be incorrect. US/UK 1,000,000.00 = 1 million, hence 1.0 million. in Europe it is 1.000.000,00 = 1 million; although in UK parlance pre-1974 1 billion is 1,000,000,000,000 {a milliion squared})

correct that the CBO figure shows 2,346 billion.

the magnitudes are correct (2.4 trillion = 2,400 billion), however ZH is off by 90 billion.

Since its a fat finger, are we to maybe think the same ZH article writers are programming HFT algo's and fat fingered ES puts on thursday?... just a thought..

<grammar nazi out>

Sun, 08/07/2011 - 00:54 | 1532227 Paul Bogdanich
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I understand that most of the commenters here were in grade school back then and might not realize it but, we actually had a fairly good handle on revenue and spending in 2000 and 2001.  See, that was before the wars and the tax cuts.  I remeber when the financial community was complaining because the United States was not issuing enough bonds and indeed redeeming the ones they had.  They screamed bloody murder at that as well so much so that the administration cut down the rate of redemption.  But alas we are so far away from that now that is seems like a fairy tale.  But it did happen.  You shoulda been there. 

Sun, 08/07/2011 - 01:44 | 1532273 papaswamp
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Revenue was great until the tech bubble popped and then 9/11

Sun, 08/07/2011 - 03:16 | 1532325 Quixotic_Not
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Revenue is just money stolen from productive citizenry from the end of the gun (or threats thereof).

Bureaucrats and politicians have an extremely limited playbook consisting of taxation, regulation, and inflation.

These three ugly sisters of bureaucracy effectively serve to steal from people, make things more difficult for them, and rob them of their purchasing power… and yet they’re dressed up as solutions instead of problems.

Regardless of the scenario, Congress will reach deep into this playbook until they chase away every productive citizen and company they can…

Sun, 08/07/2011 - 05:39 | 1532390 A Man without Q...
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Things looked ok in the 90s, because of the equity bubble, which generated tax receipts that were taken back in later years as the gains switched to losses.  The slowdown in 2000/ 2001 was a direct consequence of the loss of this theoretical wealth, but because the claim was it was a transitory slowdown leading to a v-shaped recovery, the government was able to justify massive tax cuts and stimulus.  Rates kept too low plus easy credit resulted in a housing bubble, that made people ignore how fast the debts were growing, and inflationary effects were understated owing to cheap goods flooding in from China and the housing ATM.

The general belief we could borrow our way to prosperity became a classic economic mania, the expansion of credit money led to bubbles everywhere.  

However, for those who were watching, the real economy and investment in real wealth generating assets was in a state of decline.  Real wages were falling, income disparity was growing, the burden on the young, the cost and quality of education, real technological innovation was declining, the trade deficit all getting worse.  It seemed obvious to me that the US economy was deteriorating and minus the phoney accounting behind the malinvestment, shrinking.  

"There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved."



Sun, 08/07/2011 - 12:41 | 1532861 monoloco
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Come on, who could have ever guessed that it wasn't a good idea to cut taxes and borrow a whole bunch of money from the Chinese to finance a couple of wars, DHS, and a prescription drug benefit plan?

Sun, 08/07/2011 - 01:09 | 1532238 patb
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To be fair, This projection is dated before Greenspan went to the Senate and said "If the surplus continues the Treasury Bond Market will Implode"


2 Bush Era budget cuts, a poorly designed Medicare Drug supplement and 2 Wars were not on the radar in early 01.

Sun, 08/07/2011 - 11:16 | 1532517 oldmanagain
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We know what happened, Bush and the "tax cuts pay for themselves" era.

Really stupid premise of this article is too ignore subsequent history to make an invalid point.

Sun, 08/07/2011 - 01:22 | 1532255 James T. Kirk
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Personal Captain's log: Ever since the Enterprise got stuck in this century, I dream about how much fun it would be to simply set the ship's phasers on stun, and blanket DC from orbit, every time Uhura monitors any tranmissions from the surface, indicating that someone in the guvmmit is lying about US budgetary matters. Every time they lie or make stupid, self-serving and misleading economic predictions, simply stun everyone in DC, until they learn to stop it. I'd like to call it "Pavlov conditioning from the 23rd century." I would like some ZH feedback on how many times it would take to make them stop. 10 times, 20 times, 50 times?????? Anyone think I would be violating the prime directive?

Sun, 08/07/2011 - 01:41 | 1532268 StychoKiller
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Why not violate the prime directive, we're used to being violated anyway!  Let a photon torpedo take out the Federal Reserve, you'll be doing the entire planet a favor!

Sun, 08/07/2011 - 06:28 | 1532416 jabu
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Fire away, Kirk.  However many shots it takes.  Can we watch?

Sun, 08/07/2011 - 01:56 | 1532283 adr
adr's picture

wait so they were supposed to bring in $3.4 trillion in revenue and spend $2.4 trillion by 2010. whoops someone reversed the numbers. 

i guess this was made before the dotcom blowup. people can blame the wars and the Bush tax cuts all they want but the truth is Washington would have spent the money on something else anyway. Obama added $4 trillion in debt without giving us anything for it.

we don't have a revenue problem, we have a social welfare problem. Socialism has never worked and never will. Capitalism without the check of failure and the loss of money due to stupidity it destined to always fail as well.

all the US government has done is reward stupidity and perpetual laziness with a golden ticket to armageddon. on the way there the stupid and lazy will think they've got it made.

Sun, 08/07/2011 - 02:24 | 1532302 Libertarian777
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are you kidding me?

you know exactly what we got for that $4 trillion, I'll list a few

1. highly paid jobs in Libya (war contractors)

2. highest standard of living ever (hours worked per person is at its lowest level ever)

3. exports are the highest they've ever been (since the US $ has been debased so much we can export 1,000x as much)

4. GDP is $15 trillion. If they factor in 'GDP created or saved' its in the order of $9,000 million billion trillion GDP saved.

5. we have a functioning congress. They are so efficient now, they only need 12 guys in a room who's IQ is in the million billion range, who will tell us exactly what legislation we need. We won't even have to waste time voting on bills anymore!

6. Technology is so advanced now, we can just manufacture paper food (stamps) and feed 45 million people.

7. every traveller is provided with a free prostate/rectal/mammogram examination. The amount of future public health funds saved by not having to treat these people for prostate/colon/breast cancer since it will be detected early is in the quintillion $ range.

8. the manufacturing base has rebounded. Government Motors is able to produce way more cars than ever needed (or wanted). In fact they are scaling up and hiring! Soon we'll be producing 15 million Chevy Volts per year! (and we'll recharge them with our government funded Solyndra solar tubes!)


Sun, 08/07/2011 - 05:45 | 1532393 A Man without Q...
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"Socialism has never worked and never will."

If you look at nations such as those in Scandinavia, you see that socialism can and in fact does work (not saying it is perfect).   What doesn't work is offering people something in order to win votes, but not actually taxing them enough to pay for it.  

Sun, 08/07/2011 - 15:44 | 1533611 BigJim
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Sweden came to prosperity on the back of laissez-faire policies adoped in the 19th century. The Swedish government only adopted socialist policies in the 60's... and since 1970 (when its ranking peaked at 4th) Sweden has actually become poorer relative to other countries.

Google the subject; you'll see there's lots of material out there debunking this standard socialist canard.

Sun, 08/07/2011 - 11:04 | 1532501 docj
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the truth is Washington would have spent the money on something else anyway.

Yeah, rather inconvenient, that.

Sun, 08/07/2011 - 11:21 | 1532530 oldmanagain
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Pure garbage.  Obama didn't cause the debacle. Bush and the idiots.  Obama just got the bill and problem.

Sun, 08/07/2011 - 02:48 | 1532312 ImNotExposed
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Bulliten: Prediction isn't worth a darn.

Updated bulliten: Computer enhanced prediction isn't worth a darn faster.

Sun, 08/07/2011 - 04:08 | 1532358 Byte Me
Byte Me's picture

Let me guess TD

This is all calculated before Dubyah effed it all to hell and back with "I'm  going to give away a trillion dollars"? People seem to forget about that y'know -- and that it STILL caries on a decade later. Factor in that and the CBO forcast may not be so far out of the money.

(But the CBO are still wishfull pillocks)

Sun, 08/07/2011 - 04:34 | 1532365 Yen Cross
Yen Cross's picture

 Yes those charts are weak!  Really weak

Sun, 08/07/2011 - 04:47 | 1532370 Yen Cross
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 Did anyone have the" NUTS" enough to read those charts?  GROW some NAD"S

Sun, 08/07/2011 - 04:52 | 1532373 Yen Cross
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  As i spill across Captain A'habs mundane lovelies!...>

Sun, 08/07/2011 - 04:54 | 1532374 Yen Cross
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  Girls like me!   I love Women!

Sun, 08/07/2011 - 07:35 | 1532457 hungarianboy
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This is going to happen... from the movie "Rollover"





Sun, 08/07/2011 - 07:49 | 1532470 Iguanadon
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Considering this 2001 report was from January of that year, it probably would have been fairer to look at the 2002 or 2003 report once the Sept 11 attacks were taken into account along with the war in Afghanistan.  Not that the CBO's prognostication skills would have been any better, but at least we'd be looking at reports in which they had a chance to taken into account circumstances unimaginable in January 2001.

Sun, 08/07/2011 - 11:00 | 1532498 ApukalyptusNow
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not to mention the Bush tax cuts, which account for about 3 trillion of our current debt, and the Iraq war, which was a totally unnecessary boondoggle that also added to the debt, and off the books, at that. The truth is, we were projected to have a surplus before Bush II happened. Normally I agree with what you post, TD, but this right here is a bit of nonsense.

Sun, 08/07/2011 - 12:49 | 1532893 monoloco
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How many people would support war if there was a constitutional amendment that prohibited borrowing money to pay for them? I prdict that if taxes were required to be raised to pay for conflicts, there would be a whole lot fewer hawks.

Sun, 08/07/2011 - 08:06 | 1532481 oogs66
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Remember when Greenspan was worried about too little debt?

Sun, 08/07/2011 - 09:28 | 1532491 MoneyWise
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Rate US Debt AA+ by S&P at the same time Spain AA,
Italy A+ ??? Which is currently collapsing.. And UK AAA?
These guys are jokers. Or they did what they've told
to do by some power source.
Is Spain really AA??? Common, they cannot even print money.


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