27 Feb 2013

Sequestration Analysis

Debt, Shameless Self-Promotion 10 Comments

Man the CBO makes it tough to figure out what absolute spending levels will be. Their analysis of the December/January budget deal–the one that spared us the horrors of the fiscal cliff–is couched as changes relative to the then-current baseline. So I took that as the August 2012 CBO Outlook, and constructed the following:

I have a more comprehensive analysis that may be published soon at a different site; I’ll link it from here when that happens. But in the meantime, I wanted to reward diligent Free Advice readers with a sneak peak.

10 Responses to “Sequestration Analysis”

  1. Yancey Ward says:

    Savage austerity.

    • matt says:

      there will be starving women and children in the streets. no men, though, they will resort to cannibalism.

    • The Existential Christian says:

      The deflationary spiral will begin any day now.

  2. Joseph Fetz says:

    What was the change, exactly?

  3. Rohit says:

    According to your graph, the deficit is going to be 1 trillion this year. I thought the projected deficit by the cbo was under 900 billion?

  4. Gamble says:

    Let me see if I understand the graph?

    Spending continues to go up.
    Revenue continues to go up.
    Debt reduces slightly assuming revenue continues to go up.

    Where are the cuts Obama, Congress, academia, media and the intellects are belly aching about?

    • Bob Murphy says:

      Gamble, the debt goes up in every year in that graph too, it’s just not shown. There are deficits each year.

      In my longer article, I have another graph showing everything (including federal government debt held by the public) as a percentage of GDP, which some would argue is more balanced. Even there, the debt/GDP ratio by 2022 is above where it was in 2012.

      • Major_Freedom says:

        How can that be?

        They’re going to CUT spending…….from an originally projected $Eleventy bajillion spending increase yes, but still!

        • Major_Freedom says:

          Cut, CUTS I tell you!






          To feel better about this horrible predicament, we should ask the government to spend more. Preferably borrow or print more, so that we don’t have to say TAXES. AGH!

  5. Gamble says:

    The last line I wrote, should have said, deficits continue but reduce slightly, then begin to grow again.. Your graph makes no reference to debt, my bad. Thanks for the clarification. Certainly debt as a simple number and as relation to GDP will grow.

    Do you have a link to the longer article, maybe I should simply browse past articles…

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