Relevant and even prescient commentary on news, politics and the economy.

Because He Would Never Name N. Gregory Mankiw or R. Glenn Hubbard as Arsonists Screaming for a Fire Hose

Go read Mark Thoma. Because he’s a kinder, gentler human being than I am:

The time to stand up to the budget busting was when it happened, and when members of the list had the power to affect policy, not many years later in an article at Politico. Many on the list were either part of the decision making team in the 2000s that opened the hole in the budget, or supported what the team did.

Or, as The Pragmatic Capitalist said on Twitter (h/t Joe Weisenthal, whose own take on the cabal is here; translated into English):

So, 10 former White House economic advisers (who, judging by results, suck at their jobs) now say USA is bankrupt from high deficits.

Grandpa died last week
And now he’s buried in the rocks
But everybody still talks about
How badly they were shocked
But me, I expected it to happen
I knew he’d lost control
When he built a fire on Main Street
And shot it full of holes

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Get Ready for Data Overload: Weds Report releases

by Bruce Webb

via Brad DeLong we learn that CBO is releasing its 2010 Long Term Budget Outlook on Wednesday at 9AM. Which is also the date that the 2010 Social Security Report is (over-)due to be released. Which means some head to head, apples to apples comparisons of economic projections over the 75 year window.

The Long Term Budget Outlook shouldn’t be confused with the more detailed (for my purposes) Long Term Social Security Projection typically put out by CBO in August, but there should still be plenty of material on Social Security and Medicare to discuss. Good times!

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Those Who Think the "Left of Center" is Too Tough on N. Gregory Mankiw

should read Sensible Centrist J. Bradford DeLong on the difference in forecasting between the current Administration and the CEA under N. Gregory Mankiw.

Romer/Bernstein/Kreuger et al., 2008-9 edition:

As I understand matters, last December the median private-sector forecast had the unemployment rate topping out at 9% in the second half of 2009. The incoming Obama administration simply adopted that forecast. At the time I thought that was a mistake: (I thought that was a mistake: I thought they should have made a bifurcated forecast with a “good case” 80th-percentile scenario and a “bad case” 20th-percentile scenario; they should then have stressed that in the bad case we would need a large stimulus indeed to prevent high unemployment, and that in the good case we could restrain inflation via monetary policy.)

Mankiw et al., 2003 edition:

it would make it extremely difficult for things to happen like what happened to the Mankiw CEA over the winter of 2003-2004, when high politics appears to have reached down into the forecast, changed the table for payroll employment (and only payroll employment: the rest of the forecast is not out of line with contemporary professional forecasts), and produced an estimate for December 2004 (a) inconsistent with the rest of the forecast, and (b) high by 2.3 million in its estimate of payroll employment–all because Karl Rove and company thought it important to avoid headlines like “Bush administration forecasts 2004 payroll employment to be less than when Bush took office.” (link from original)

The positive-spin version is that Mankiw plays politics better than the Obama Team.

UPDATE: Kauffman Foundation invitee Mark Thoma adds to the fun.

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CBO: Preliminary Budget Analysis

h/t Movie Guy

CBO Preliminary Analysis (PDF)

For your reading and commenting pleasure. I would only note that much of the change between the CBO January baseline and today is just the result of scoring the intervening legislation and not due to any unexpected economic changes. But in any case here it is.

Update: here is a link to the Director’s Blog page announcing the report release (with excerpt)
Preliminary Analysis of the President’s Budget

Our current assessment of economic developments indicates that:
Although the economy is likely to continue to deteriorate for some time, the enactment of the American Recovery and Reinvestment Act and very aggressive actions by the Federal Reserve and the Treasury are projected to help end the recession in the fall of 2009. In CBO’s forecast, on a fourth-quarter-to-fourth-quarter basis, real (inflation-adjusted) GDP falls by 1.5 percent in 2009 before growing by 4.1 percent in both 2010 and 2011.

For the next two years, CBO anticipates that economic output will average about 7 percent below its potential—the output that would be produced if the economy’s resources were fully employed. That shortfall is comparable with the one that occurred during the recession of 1981 and 1982 and will persist for significantly longer—making the current recession the most severe since World War II. In this forecast, the unemployment rate peaks at 9.4 percent in late 2009 and early 2010 and remains above 7.0 percent through the end of 2011. With a large and sustained output gap, inflation is expected to be very low during the next several years.

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More Following the Money

by Bruce Webb (h/t Susan G at dKos.)

David Waldman aka KagroX has put together at Congress Matters what he calls a
Treasure trove of tools we need to understand the budget process.

It’s pretty impressive, if you want the full span of Congressional budget materials you have it right here. Heck even Movie Guy would probably approve.

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2008 Financial Report of the United States

by Bruce Webb

2008 Financial Report of the United States Government (Report) provides the President, Congress, and the American people a comprehensive view of the Federal Government’s finances, i.e., its financial position and condition, its revenues and costs, assets and liabilities, and other obligations and commitments. The Report also discusses important financial issues and significant conditions that may affect future operations. This year’s Report gives particular emphasis to two key issues: The Government’s response in recent months to the financial market crisis, and the Government’s capacity to sustain the funding and pay the benefits of key social insurance programs, such as Social Security and Medicare.

Andrew Biggs once again tips us off to the release of valuable new Reports at his blog Notes on Social Security Reform. As it turns out the link was a little off, but anyone interested in Social Security owes it to themselves to read what Andrew has to say on the topic, if only to get a corrective to what you get here from me and Dale Coberly.

I have yet to read the Report and at this point in the evening am not likely too, still less comment on it. But here you have the GAOs 194 pg statement on the financial health of the United States including but not limited to Social Security/Medicare. Among other things it helps to understand some of the terminology used in budget discussions. In short this document gives you the economic world as the Bush Administration would have you see it. I present it to you unfiltered.

See you in comments.

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