CBO July budget review

[oldfart]

Every month the Congressional Budget Office issues a report on how revenues and expenditures look for the current fiscal year. The July report covers ten months (October 2012--July 2013), so it gives a pretty good idea of where the budget stands.

Revenues are up $278 billion compared to fiscal 2012 (increase of 14%) and expenditures are down $90 billion (decrease of 4%).


Link: CBO | Monthly Budget Review for July 2013

The food fight may now resume.

 

[Rshermr]

Every month the Congressional Budget Office issues a report on how revenues and expenditures look for the current fiscal year. The July report covers ten months (October 2012--July 2013), so it gives a pretty good idea of where the budget stands.

Revenues are up $278 billion compared to fiscal 2012 (increase of 14%) and expenditures are down $90 billion (decrease of 4%).


Link: CBO | Monthly Budget Review for July 2013

The food fight may now resume.

The CBO is about as good a source as you can get imho. But I am sure that the think tanks are working hard to provide talking points against the cbo analysis. Should be interesting.

 

[Rshermr]

Every month the Congressional Budget Office issues a report on how revenues and expenditures look for the current fiscal year. The July report covers ten months (October 2012--July 2013), so it gives a pretty good idea of where the budget stands.

Revenues are up $278 billion compared to fiscal 2012 (increase of 14%) and expenditures are down $90 billion (decrease of 4%).


Link: CBO | Monthly Budget Review for July 2013

The food fight may now resume.

Well, looks like a number of folks have looked at this post and the cbo numbers. And no one disagrees. So, that must mean that all agree with the cbo. Which they should, of course.

 

[Rshermr]

I suspect that a lot of those posting on this board do not know what the cbo is. Or else they are simply waiting for their talking points to be printed. Because what the cbo said is interesting, and important.

 

[oldfart]

I suspect that a lot of those posting on this board do not know what the cbo is. Or else they are simply waiting for their talking points to be printed. Because what the cbo said is interesting, and important.

This was kind of an experiment to see what happens when we just post the raw information. The CBO release also made the observation that the deficit declined by $368 billion, mainly as a result of the higher revenues created with an improving economy. This is about a 40% decline in the deficit y.o.y. from $974 billion to $606 billion.

There are some obvious implications. First, the best way to reduce the deficit is to grow the economy. We can argue over what the best way is, but growth and a lower deficit go together. I haven't double checked the forecast numbers, but this puts us real close to where the budget would be balanced with a moderate unemployment rate, say 5.5--6%.

Second, spending, including Social Security, Medicare, and Medicaid, all of which grew (5.4%, 3.0%, and 5.7% respectively). I was astounded that expenditures for federal unemployment benefits decreased from $82 billion to $62 billion, a drop of 24.4%.

The rest of the budget is a little weird too. Military spending went down $36 billion (6.7%), net interest paid down $5 billion (2.4%), and other spending was reduced $25 billion (2.8%). The net cost (recovery) from GSE's (Fannie & Freddie) went from a cost of $5 billion in 2012 to a recovery of $82 billion this fiscal year, a $87 billion swing.
Pause to think about that a minute. Despite all of the borrowing and a continuing deficit. the outlays for interest expense WENT DOWN. If we ignore the GSE figure, which has some problems, spending would have been essentially flat.

So the reason for the improvement had nothing to do with entitlement programs, except possibly for unemployment benefits. I think the argument for a "grand bargain" that includes entitlement cuts is taking a pretty good hit.

Finally, we have had some debate on other threads about what constitutes research and analysis in economics. Technically what CBO does is research and when we talk about it, that's analysis. I have done some original economic research, in the sense that I took some raw data (in one case 100 years of land titles in a given county) and organized it into a usable form to confirm or confute a hypothesis about what was going on. And of course I do a good bit of analysis of well packaged data.

When I try to analyze a report of a packaged data set, like the CBO monthly report, I try to post a link to the announcement or at least a citation. I try to avoid using another commentator as the citation for the data set if the primary source is available. IMHO if we all followed this distinction, a lot of misleading and incorrect supposition would be avoided.

Peace all!

 

[Freemason9]

I suspect that a lot of those posting on this board do not know what the cbo is. Or else they are simply waiting for their talking points to be printed. Because what the cbo said is interesting, and important.

This was kind of an experiment to see what happens when we just post the raw information. The CBO release also made the observation that the deficit declined by $368 billion, mainly as a result of the higher revenues created with an improving economy. This is about a 40% decline in the deficit y.o.y. from $974 billion to $606 billion.

There are some obvious implications. First, the best way to reduce the deficit is to grow the economy. We can argue over what the best way is, but growth and a lower deficit go together. I haven't double checked the forecast numbers, but this puts us real close to where the budget would be balanced with a moderate unemployment rate, say 5.5--6%.

Second, spending, including Social Security, Medicare, and Medicaid, all of which grew (5.4%, 3.0%, and 5.7% respectively). I was astounded that expenditures for federal unemployment benefits decreased from $82 billion to $62 billion, a drop of 24.4%.

The rest of the budget is a little weird too. Military spending went down $36 billion (6.7%), net interest paid down $5 billion (2.4%), and other spending was reduced $25 billion (2.8%). The net cost (recovery) from GSE's (Fannie & Freddie) went from a cost of $5 billion in 2012 to a recovery of $82 billion this fiscal year, a $87 billion swing.
Pause to think about that a minute. Despite all of the borrowing and a continuing deficit. the outlays for interest expense WENT DOWN. If we ignore the GSE figure, which has some problems, spending would have been essentially flat.

So the reason for the improvement had nothing to do with entitlement programs, except possibly for unemployment benefits. I think the argument for a "grand bargain" that includes entitlement cuts is taking a pretty good hit.

Finally, we have had some debate on other threads about what constitutes research and analysis in economics. Technically what CBO does is research and when we talk about it, that's analysis. I have done some original economic research, in the sense that I took some raw data (in one case 100 years of land titles in a given county) and organized it into a usable form to confirm or confute a hypothesis about what was going on. And of course I do a good bit of analysis of well packaged data.

When I try to analyze a report of a packaged data set, like the CBO monthly report, I try to post a link to the announcement or at least a citation. I try to avoid using another commentator as the citation for the data set if the primary source is available. IMHO if we all followed this distinction, a lot of misleading and incorrect supposition would be avoided.

Peace all!

Good discussion.

Call me a pessimist, though . . . when I see the government engaging in "austerity" in a rough economic environment, I see trouble on the horizon. The economy is still in horrible shape.

 

[Rshermr]

From my pigeon hole, austerity is not so much a gov issue, as it is specifically a political issue. Ant that politics is pushed hard by some very wealthy folks outside of gov and politics. Such as the Koch brothers.

 

[Avorysuds]

I'll wait until the end of the fiscal year and the numbers are real to see what things are like. Debt VS revenues.

 

[Freemason9]

I'd like to see ONE nationally significant politician demand a full-employment environment. The fact that I don't tells me that the American middle class is doomed.

 

[Mad Scientist]

Every month the Congressional Budget Office issues a report on how revenues and expenditures look for the current fiscal year. The July report covers ten months (October 2012--July 2013), so it gives a pretty good idea of where the budget stands.

Revenues are up $278 billion compared to fiscal 2012 (increase of 14%) and expenditures are down $90 billion (decrease of 4%).

So Revenues are up 278 Billion right? Let's just assume that number is real.

America is 16 Trillion in debt.

16 divided by 0.278 equals:

57.5 years to pay off the debt. Are we supposed to be happy about that?

 

[Freemason9]

Every month the Congressional Budget Office issues a report on how revenues and expenditures look for the current fiscal year. The July report covers ten months (October 2012--July 2013), so it gives a pretty good idea of where the budget stands.

Revenues are up $278 billion compared to fiscal 2012 (increase of 14%) and expenditures are down $90 billion (decrease of 4%).

So Revenues are up 278 Billion right? Let's just assume that number is real.

America is 16 Trillion in debt.

16 divided by 0.278 equals:

57.5 years to pay off the debt. Are we supposed to be happy about that?

Goddammit, stop it. Just stop it. This is NOT a debt that will ever, ever need to be paid off . . . in fact, paying down the "debt" will certainly harm the economy. As it did in the late 90's and early 00's.

 

[Auteur]

It seems to me that employment is the key issue, and one that few are taking very seriously. High unemployment means wasted talents, it means a lack of demand for products, important in an economy so skewed towards consumerism, as it is today, and it could mean social friction and conflict.

There are trends today that are continuously lowering the need for workers. This is a political problem, in as much as these trends are very unlikely to go away, or even change much in intensity. Ever more work is being taken over by automation (ominously, even in what used to be "third world" countries). Globalization has shifted employment to some of the poorest countries, creating a global labour market that is being inundated by masses of the desperately poor, and hence eliminating jobs, or pulling down wages and benefits overall.

Money and debt, on the other hand, are more of an abstraction. Debt can be reduced by various means, and what seems crushing today can look rather small a few years down the road.

 

[Rshermr]

Every month the Congressional Budget Office issues a report on how revenues and expenditures look for the current fiscal year. The July report covers ten months (October 2012--July 2013), so it gives a pretty good idea of where the budget stands.

Revenues are up $278 billion compared to fiscal 2012 (increase of 14%) and expenditures are down $90 billion (decrease of 4%).

So Revenues are up 278 Billion right? Let's just assume that number is real.

America is 16 Trillion in debt.

16 divided by 0.278 equals:

57.5 years to pay off the debt. Are we supposed to be happy about that?

So, old boy. Who pays?? To whom?? In your opinion, of course. (just thought I would try to kindle that food fight.)