Yeah, This Will Work Out Fine (Budget) *CBO SAYS DEFICIT THIS YEAR TO AMOUNT TO $1.5 TRILLION *CBO SAYS PUBLICLY HELD DEBT TO GROW TO 90% OF GDP BY 2020 *CBO SAYS OBAMA BUDGET WOULD PRODUCE $9.76 TRILLION IN DEFICITS Not a snowball's chance in hell we get to 2020 doing this.
Oh, that's $1.4 trillion more than their last guess, mostly on lower tax collections (no really?)
Here's the problem with this new CBO number - it more than doubles the public Treasury debt float over the next nine years.
It also "predicts" that China and other investors will increase their holdings of US Government debt from their current $7.5 trillion (the current marketable paper) to $20.3 trillion by 2020. And under the CBO's optimistic view, interest payments would "only" quadruple, to some $900 billion annually.
Yet if GDP rises at a compound rate of 4% for the entire ten year period (no more recessions!) the tax base upon which to assess taxes to pay that quadrupled interest expense will expand by only 48%.
Best-a-luck on this one folks - we won't make it to 2020 on that trajectory before someone who has done the math (we're talking basic math here too folks, not grad school stuff) calls BS on this one.
