Sunday, December 30, 2012

Predictions Are Hard, Especially About the Future, and Especially About Estimating the Excesses of Government Debt

Predictions Are Hard, Especially About the Future, and Especially About Estimating the Excesses of Government Debt:
James Pethokoukis at American Enterprise Institute's web site
takes us back to yesterdecade to remind us that even the smartest
and most expert of estimaters of future government debt
can be very, very wrong
:


 Here’s the Congressional Budget Office’s ten-year budget
forecast from 2002
 (note that this was after the Bush tax
cuts were passed):....Instead of publicly-held debt as a share of
GDP being a microscopic 7.4% this year [as they predicted then], it
was closer to 74% – or 72.8% to be specific (as of the August
update from the CBO.)
Peter Suderman's great January 2010
Reason feature on the problems with CBO
predictions
, on "the highly speculative nature of its work,
which requires an endless succession of unverifiable
assumptions."