The CBO’s Crystal Ball

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Over at The Corner, Avik Roy is outraged at today’s estimate from the CBO that the 2011 deficit will be $1.5 trillion. Beyond the outrage, though, he also implies that perhaps this reflects badly on the CBO’s forecasting ability, since they predicted a lower deficit last year. “What’s a $500 billion, 50 percent error among friends?” he sneers. ZOMG!

To his credit, though, Roy reproduces a table showing exactly where the $500 billion “error” comes from. Here it is:

Hmmm. Estimated 2011 revenues are down $442 billion, accounting for virtually all of the difference. And where does that come from? Table A-1 in the CBO report provides the answer: nearly all of it is due to the package of tax cuts that were signed into law during the lame duck session last year. Almost none of it is due to technical changes.

So there’s no “error” here. The CBO did fine. What happened was that Congress passed a whole bunch of tax cuts — cuts that I’m sure Roy supported — and those cuts increased the deficit. Only a conservative could possibly be surprised by this. Or someone trying his best to undermine the credibility of the CBO for unrelated reasons. Like, say, someone who doesn’t like the CBO’s contention that healthcare reform will reduce the deficit.

By the way, did I mention that Roy mostly writes about healthcare reform?

UPDATE: Roy responds here. He’s right that not all of the lost revenue comes from extension of the Bush tax cuts. The tax package passed during the lame duck session includes both extension of the Bush tax cuts and various other tax cuts implemented at the same time (the AMT patch, payroll tax holiday, etc.). I’ve corrected the text.

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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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