Visualizing The Government’s Massive Budget Deficit Forecasting Error
That government projections are not worth the price of the paper (especially not in today’s dis-disinflationary environment) they are printed on is no secret. As Zero Hedge recently demonstrated the margin of error in the most recent budgetary prediction can only be classified as insane. We wrote: “On February 28, 2001 George Bush said this about his 2002 Budget: “It will retire nearly $1 trillion in debt over the next four years.” Instead, US debt, which at that point was $5.7 trillion, rose to $7.7 trillion. $3 trillion rounding error? Also in the same budget, Bush predicted a $5.6 trillion surplus over the next ten years, which would wipe out all of America’s debt by 2011. The latest debt figure was $14.1 trillion. A $14.1 trillion rounding error, or a nearly five fold increase in “rounding errors” in a decade.” So that’s debt, what about budget surplus and/or deficit projections? It’s not any prettier. And courtesy of the NYT we can now see this in an easy to comprehend animation. Following the jump readers can see just how endlessly upward biased projections tend to almost without fail deviate with reality (and unemployment rates as well). The best indication: the 2012 projection to the 2008 budget forecast callsed for a surplus. Now we are expecting a massive deficit. So why do we listen to these monkeys with typewriters again?
Ful animation after the jump: