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Tue Jul 22, 2014, 09:02 PM

CBO – Still Pushing Deficit Scaremongering Propaganda

We’ve written from time to time about the shameless partisan role that the Congressional Budget Office plays in stoking misguided and destructive concern about budget deficits. It’s important to recognize the CBO’s openly partisan stance on this issue, because it is supposed to make independent, apolitical budget forecasts and is widely and mistakenly seen as “objective”. In fact, the CBO’s regularly takes stances that put them in the same camp as billionaires like Pete Peterson and Stan Druckenmiller, who want to slash Social Security and other social safety nets.

In fact, as we detailed in a 2012 post, the CBO departed wildly from clearly stipulated procedures for preparing long-term budget analyses to cook up projections that showed Medicare costs continuing to grow markedly faster than is remotely plausible. This mattered because health care cost increases are the driver of long-term budget worries. The CBO’s analysis was so dubious that two budgetary experts at the Fed published a devastating paper on the CBO analysis. From our post:

A remarkably important and persuasive paper that calls into question the need for “reforming” Medicare has not gotten the attention it warrants. “An Examination of Health-Spending Growth In The United States: Past Trends And Future Prospects” (hat tip nathan) by Glenn Follette and Louise Sheiner looks at the model used by the Congressional Budgetary Office to estimate long term health care cost increases. Bear in mind that this model is THE driver of virtually all forecasts of future budget deficits.

This paper, although written in typically anodyne economese, is devastating in the range and nature of its criticisms….

More at http://www.nakedcapitalism.com/2014/07/cbo-still-pushing-deficit-scaremongering-propaganda.html .

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