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View Diary: "An Elaborate Charade" - Dean Baker on the Debt Ceiling Crisis (251 comments)

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  •  One Little Problem (1+ / 0-)
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    There's a little problem with your deficit projection logic.  If, as you say, the enormous increase in the size of the deficit was entirely the result of the burst housing bubble, which is real - the deficit during the bubble or the deficit after it pops?  Isn't the definition of a bubble that it creates a false sense of prosperity and wealth?

    •  There is more than one little problem, (2+ / 0-)
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      lmnop, Hawkjt

      lmnop - I agree with your comments.

      Also, there may be bit of cherry-picking of the CBO deficit forecast. I looked at the CBO data and it kept changing throughout 2008.

      In Jan 2009, CBO was forecasting a FY-2009 budget deficit of $1.18 trillion dollars.

      Yes, the dramatic change was the result of the recession. But the small budget deficits under the Bush Administration seem to be based on an economic/financial apparition; for the the true nature of GDP growth and budget growth was something different.

      "Truth exists, only falsehood has to be invented." Georges Braque

      by vetforobama on Wed Jul 27, 2011 at 05:52:28 PM PDT

      [ Parent ]

      •  Balance (1+ / 0-)
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        I guess the broader issue is that revenues tend to ride up and down with the economy, whereas spending generally creeps upward, unless specifically tended to.  It's misleading to project balance using only an economic peak or valley as a reference point.

        And I'm not arguing that we should be pursuing austerity at this juncture.  I just don't see the difference between the argument presented here and the one the GOP is using citing the current economy as the only meaningful reference point.  It strikes me as less than helpful to make specious and hyperbolic arguments.

      •  Baker said (1+ / 0-)
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        the other day that the President lied about the budget deficit being projected at 1.1 trillion by the time he took office. I thought Baker was full of crap on that comment and he was. I hate it when supposed experts in their field play games with the numbers to support their case and critcize the guy who actually on the firing line....cowardly in my book,Baker.

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