The Homa Files

Yesterday the CBO released a new budget outlook for 2010 and beyond.  The highlights (or,  lowlights):

• ” … if current laws and policies remained unchanged, the federal budget would show a deficit of about $1.3 trillion for fiscal year 2010.”
• The unemployment rate is projected to fall to 9.5% by 2011, 8% by 2012 and about 6% by election day 2012 (hmmm)
  
    

• Somewhat buried in the details is a re-estimation of the cost of the 2009 stimulus bill (officially known as ARRA – American Recovery and Reinvestment Act).
  
  CBO originally estimated that ARRA would cost $787 billion from 2009 through 2019. Its new estimate is $862 billion, about $75 billion (9.5%) higher than previously forecast.
  
  Roughly 75% of the overage is attributable to “safety net” programs — food stamps and unemployment benefits.  Logical since the Stimulus program was going to be the silver bullet that kept unemployment below 8%.  Oops.Below is a chart summarizing all of the costs.

  Note that $258 billion hasn’t been spent yet (bank it ?) and that, so far,  a whopping 3% of the budget ($28 billion) has been spent to rebuild our roads and bridges.  Wasn’t that supposed to be the main event?

  Side note: if CBO estimate is off by 10%  in the current year of a budgeted program, how much confidence should we have in a trillion dollar healthcare estimate ?  Yipes.

  Click the chart to enlarge it

See Appendix A of the CBO Report:
http://www.cbo.gov/ftpdocs/108xx/doc10871/01-26-Outlook.pdf

This entry was posted on January 27, 2010 at 7:59 am and is filed under Economics, Financial Crisis. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.