Back to blog

The hubris of ten-year budgets

See blog

Readers' comments

Reader comments are listed below. Comments are currently closed and new comments are no longer being accepted.


Moscow on the Hudson

Speaking of hubris, when are we going to see the Mexican financing for that wall on the boarder? I want college grads to pick my fruit. One day their picking fruit, the next thing you know they're voting illegally.
We need to 'Make America Great' again, and that starts by picking our own fruit.


Hopefully no tax reform is passed. Judging by historical examples and the current congress, I'd say that they will probably just make it worse.

MySetDancer in reply to CA-Oxonian

"Budget projections and budget plans are merely window-dressing with no practical importance" Well, your post does contain some truth, but not all of it. It ignores some recent lessons from the CBO. The CBO has release a few budget and spending projections based on proposed legislation by the republicans and those projections helped sink that legislation.
For example, every time the republicans released a new "healthcare" plan, the CBO ran the numbers and published what they projected to be the impact on the budget and the people. Each time this was done, the republican proposal was killed. Now, healthcare reform is on-hold until ACA collapses because the republicans have been exposed for what they are trying to do. For some reason, Americans of both parties are actually listening to what the CBO forecasts, and registering their displeasure with their representatives. This is the way the system is supposed to function. I think it is great.
The reason so many republicans (and some democrats) desire limited federal government is a recognition of some of the attributes of your model posted above. Since "people" are so easily deceived and the system is subject to corruption, the less government, the less corruption occurs. People are the same everywhere, and much of what the federal government tries to do simply fails, and the money is squandered due to human nature while the politicians take "credit." I get that. But exactly what the level of government should be is not clear to me. Leaving people to die under an overpass is not acceptable, but neither is creating a dependent demographic living on state aid.
I email my representatives every week on various issues. If everyone did, then the special interests would have to share the room with the rest of us.
Best regards.


What the idiot neoconservatives didn't understand was that freedom through invasion doesn't work and is economically ruinous (not to mention the cost in human lives) for the country that launches it.


The writer overlooks the fundamental job of politicians: to be re-elected. Politicians are nominally in the business of governing but in reality they are 100% focused on the business of winning votes. This means that they must pander to their donors (the wealthy) and to voters (the ignorant and thoughtless) with "policies" that promise jam today and jam tomorrow, no matter how implausible these promises may be.
The wealthy benefit from the system because the politicians they've paid for reliably deliver legislation that either reduces their taxes through a series of careful loopholes or cripples competition in the name of "fairness" to US corporations. The poor and simple-minded pay through the nose but they're too simple-minded and ignorant to realize they're being fleeced by the very people they are cheering for.
Budget projections and budget plans are merely window-dressing with no practical importance. Forecasts are utilized only when they support more tax cuts; no one believes them but they make fiscal suicide sound so much more appealing. Whatever topic politicians select to talk about, the real purpose is merely to garner cash and support regardless of the lies one must tell or the outcome of inept policy.
All in all it's not exactly a system of governance that's likely to produce any sort of outcome other than the most catastrophic. Which is, in fact, what we see.
So the question is: why do we continue to accept this hopelessly flawed system and its predictably disastrous outcomes? Are we simply too stupid and complacent to think, "there must be a better way than this?" Are we too locked into the sports-team mentality (my team's better than your team!) to understand that self-governance is a deeply serious business that isn't about winning or losing elections at all?
Apparently so. QED: goodnight and goodbye, the West.


"Or the almost total collapse of capital markets. " I remember Greenspan saying on CNN that he saw no financial crisis coming. Greenspan was often wrong on the "big" stuff. Maybe the Fed Chief's cultural role is to be a Priest who is supposed to make people feel good. I don't know. But even Bernanke was unable to see the financial crisis coming, and when he did, he sat paralyzed in denial for weeks before he did anything meaningful. He really was incompetent. Having these kinds of people in powerful positions does not appear to be a very good idea. We need people who actually understand how the system works and have many years of practical experience as well. Professors make for very poor leaders.
If any of the "savings" that politicians trumpet has ever materialized, I certainly don't know where it went. I think those kinds of statements are simply lies to deceive voters. Politicians spend everything they can get their greasy hands on. Historical fact. Not alternate.

Allan Edie

Excellent article, for which thanks.

Hubris indeed - it is unfortunate that projections such as Greenspan's are not subjected more often to retrospective examination, and lessons learned from the results.

WT Economist

"Alan Greenspan, one of the great economists of his or any generation, did not see these things coming."
I have a rather less charitable view of convenient "mistakes" that happen to accord with the self-interest of yourself and your crowd. Generation Greed made those mistakes over and over, so at what point are they not mistakes? The Trump tax cuts?
Not just tax cuts and not just Republicans either. How about all those public employee pension increases that "cost nothing," for example?


Politicians rosy predictions are needed to stay elected even though they know our tax revenues, which look incredibly strong at the moment, will be slashed in half very soon. It's the nature of business cycles. That's the problem right now in the stock markets, analyst value these companies as if they will continue seeing growth and the levels of revenues/profits as we see today in 2017. But we know this is not the case.. Recessions are a part of business and will always be. It is are fault for giving elected officials the power over the budget in the first place. A business will not give politicians money unless they spend every bit of tax revenues plus a deficit because if they saved money that will be less money in the economy for the business to soak up. We need to hire an independent firm who knows alot about business cycles and the inevitable down turn so that we save money instead of spending more than we take in. Elected officials know the problem they just have no incentive to fix it. They want us to stay uninformed and confused.


I wonder if it might be possible to predict government revenue without a too large margin of error. First I would take the average % of GDP represented by tax revenue for every 10 year period since 1980. I think this would be 20% + or-- something not that great. Then I would forecast GDP as follows: multiply the number of people employed by the average number of hours worked & multiply that by the rate of productivity. I think this figure varies from time 1 to time 2 in the same way as GDP. In other words, it correlates with GDP at a very high level. Here too I would use the degree of variation in every 10 year period for average productivity to create a +&-. It's up & down over time but not so much in terms of 10 year averages. Similarly for % of population working, applied to existing estimates of population growth. Similarly for hours worked. This would provide a range of estimates of government revenue each year that I think would turn out to be accurate. The main point here is that revenue can be predicted to some degree. It's spending that is an unknown.

guest-aaawwwmj in reply to CA-Oxonian

The wealthy benefit from the system because the politicians they've paid for reliably deliver legislation that either reduces their taxes through a series of careful loopholes or cripples competition in the name of "fairness" to US corporations.
Which is why we need "tax reform."
(Nudge, nudge, wink, wink)

Mexico should pay for that wall because if not guess what happens to their countries tax revenues as people leave their country. If all their citizens leave they will have no country.. lol that is why Trump said Mexico will pay for the wall. Or we could ban Mexican citizens from sending money out of the USA to mexico.


why not just admit to ourselves that we will have a recession for example within the next few years. Our tax revenue has increased dramatically since 2009 from 2.5 trillion to 4 trillion est. next year. Of course we plan on spending all of that plus 500 billion in deficits. Why not instead spend 3.5 trillion and save 500 billion for the inevitable recession that will occur very soon. politicians could care less about our deficit they will all be dead before shit hits the fan anyway they only care about their own personal paychecks but first have to stay elected by spending all tax revenues plus a deficit. The problem is not hard to figure it out, just the ones in power don't care to figure it out.