zerohedge.com / By Tyler Durden / October 6, 2013, 11:42 -0400
Why the Debt Ceiling Debate Should Be Different This Time
Same political disfunction. Same blue team indifference to soaring government debt. Same hypocrisy from those on the red team who helped set debt on its upward trajectory. Same lack of any serious effort to tackle the most important issue – the unsustainable paths of our major entitlement programs.
But there is one difference.
We mentioned it in July when we posted preliminary estimates for the Congressional Budget Office’s (CBO) 2013 Long-Term Budget Outlook. Before updating that analysis, though, I’ll repeat my obligatory warning that the CBO’s projections are pure fiction. Here’s a brief recap of the problem:
- The CBO publishes projections for a “baseline scenario” and an “alternative scenario.” The baseline gets all the attention, while the alternative is either relegated to the spreadsheets that accompany the reports (as in May’s 10-year projections) or buried deep inside a 100+ page document (as in September’s long-term outlook). Both scenarios are based on a fantasy world of permanent full employment and no budget surprises or recessions. I’ll call them UNICORNs, for Unemployment Never Increases, Crises (anything that throws off budget plans) become Obsolete and Recessions are Nonexistent.