Again, the red line riding off into budgetary infinity is described as "Obama FY2010 Budget," and the projection is sourced to the CBO. The point I made in the last post is that the CBO has never done a projection of the Obama budget through 2080, so that sourcing can't be right.
But I assume what the GOP is relying on is a CBO letter to Ryan called "The Long-Term Economic Effects of Some Alternative Budget Policies," which contained budget estimates based on the CBO's December 2007 Long-Term Budget Outlook.
But there are three problems with using this as a source. The first is that the CBO's 70 year projections are, as one CBO official told me a moment ago, "advisory is nature": "We have a lot of uncertainty in our ten-year projections, so there's obviously much more in our 70-year projections."
Second, both the 2007 Budget outlook and the 2008 letter to Ryan are based on the Bush budget, not the Obama budget. (For the ineluctable, historical reason that they were written in 2007 and 2008.)
Third, both budget documents were written by Obama's budget direcetor, Peter Orszag, when he was head of the CBO. (I'm going to guess he knows about the long-term budget risks that he identified last year.)
Finally (and this is mostly an excuse to include another pretty graph), the growth in spending is almost entirely the result of an increase in long-term Medicare and Medicaid liabilities that has nothing to do with the Obama budget. Orszag has made this his personal campaign for the last few years, so I'm guessing he knows about this, too:
But I assume what the GOP is relying on is a CBO letter to Ryan called "The Long-Term Economic Effects of Some Alternative Budget Policies," which contained budget estimates based on the CBO's December 2007 Long-Term Budget Outlook.
But there are three problems with using this as a source. The first is that the CBO's 70 year projections are, as one CBO official told me a moment ago, "advisory is nature": "We have a lot of uncertainty in our ten-year projections, so there's obviously much more in our 70-year projections."
Second, both the 2007 Budget outlook and the 2008 letter to Ryan are based on the Bush budget, not the Obama budget. (For the ineluctable, historical reason that they were written in 2007 and 2008.)
Third, both budget documents were written by Obama's budget direcetor, Peter Orszag, when he was head of the CBO. (I'm going to guess he knows about the long-term budget risks that he identified last year.)
Finally (and this is mostly an excuse to include another pretty graph), the growth in spending is almost entirely the result of an increase in long-term Medicare and Medicaid liabilities that has nothing to do with the Obama budget. Orszag has made this his personal campaign for the last few years, so I'm guessing he knows about this, too:
But the "crazy" spending line going up to 40% of GDP does matter, though Obama is not to blame for it and it's misleading at best to call this the "Democratic" line. It's not crazy either, but rather is where we're headed on current trends. The better candidate for the crazy line is the "Republican" line that shows all of these future costs magically controlled by a benevolent un-spending Republican majority. I'll have to read through the budget proposal, or your analysis, to see how this is supposedly accomplished - neat trick...
1. The reason Medicare explodes is because these graphs all assume a growth rate greater than inflation, even per person. In other words, you could provide the exact same level of care we do now in the future, for far less.
2. These multidecade projections are all fiction. Whatever happens, it won't look like either line. The only reason to do them is to get some idea of how much entitlements have overpromised to future retirees. You don't need rocket science to answer that -- "a lot!" The non-entitlement budget really shouldn't grow faster than the economy.
3. Technology is going to continue to change the world, and there's a lot of it coming down the pike. What exactly, is unknown and unknowable. That's the dominant factor in version of the future, which makes these projections worthless.