Debt, Debt, Debt

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The Congressional Budget Office released some new numbers today and the White House had this to say:

Responding to today’s new, more pessimistic CBO scoring of the president’s budget in light of the deteriorating economic situation, Peter Orszag was at pains to emphasize that deficit projections are highly sensitive to relatively small changes in assumptions. For example, suppose that first you project revenues of $100 and spending of $103 for a $3 deficit. Then you get some bad news about the economy so projected revenue drops by five percent. Well, suddenly you’re looking at a deficit of $8. The alarming way to put this is that the deficit has nearly tripled. The calm way is that revenue has fallen by 5 percent.

Well, yes, deficit projections are highly sensitive to small changes in assumptions, which is why presidents traditionally tweak their assumptions to produce rosy economic projections.  It doesn’t take much.  Obama and Orszag actually did this less than most administrations in their initial budget proposal, I think, but they still did it.  And now it’s coming back to bite them since, in fact, the alarming way of looking at this is also the correct one.

Now, given the current state of the economy, a larger deficit might be a feature, not a bug.  But if the deficit stays above 4% of GDP for an entire decade, as the CBO suggests, then we have a problem.  We can’t keep that up forever any more than Wall Street could keep the subprime bubble going forever.  Someday we’re going to pay.

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SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

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