Words & Numbers

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Insightful weekly commentary on news & current events from economist Antony Davies and political scientist James R. Harrigan.

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The Government’s Rosy Outlook

February 5, 2020

The Congressional Budget Office is tasked with forecasting the federal budget. Over the past twenty years, the CBO has tended to over-estimate future tax revenues and under-estimate future government spending. The result is that CBO paints an unrealistically rosy picture of the government’s financial future. If we take CBO’s forecasts and compensate for their historically rosy biases, we find that, where the CBO predicts trillion-dollar deficits forever, the likely reality is actually worse.

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