Veronique de Rugy of George Mason University compiled this handy chart (HT: Mauldin Economics):
The CBO is a bunch of myopic clueless geeks with models that have absolutely no relation to the real world -- and they are likely under political pressure to be optimistic too.
In 2010, the CBO estimated that the 2013 deficit would be less than 3% of GDP in its "baseline" (aka "current law") scenario which assumed the expiration of all of the Bush tax cuts, the AMT fix, the payroll tax holiday, and the Medicare doc fix.
Now you don't have to be a Keynesian psychopath to understand that large tax increase on the middle class in addition to cutting off people's unemployment checks would have a significant impact on GDP. That is accepted by all economists across the political spectrum. Except, apparently, the model monkeys at the CBO.
In fact, the deficit is running around 6% of GDP this year [UPDATE: It came in at 4.1% thanks to a booming stock market, low interest rates, $78 billion in interest remittances from the Federal Reserve's debt monetization program, and a change in the definition of GDP] even though some of the "baseline" assumptions were eventually adopted (Bush tax cuts for the rich and payroll tax holiday ended at the end of last year). All of the "baseline" tax increases and spending cuts -- including both the extended and the expired -- amounted to only 2% of GDP, so even given the ludicrous stipulation that large middle-class tax hikes have no impact on GDP, the CBO was still way too optimistic.
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Anybody else think horse paste might be worth a try?