by None of us should put too much stock into any long range economic outlook. But CBO’s economic outlook impacts its (baseline) budget projections, which matter for policymaking in all kinds of ways.By assuming a gloomier economy—no growth, higher unemployment, stickier inflation, and more aggressive rate hikes in the near term (among other things)—CBO is telling lawmakers that projected deficits over the period 2023-2032 will be 0 billion higher than previously forecast (back in May 2022). Part of that jump is due to higher (revised up 5B) projected debt service over that period.Keep this in mind, because I’m going to write more about rate hikes and their budgetary impacts in my next post....The LensQuick Thoughts on CBO's Budget and Economic OutlookStephanie Kelton | Professor of
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None of us should put too much stock into any long range economic outlook. But CBO’s economic outlook impacts its (baseline) budget projections, which matter for policymaking in all kinds of ways.The LensQuickBy assuming a gloomier economy—no growth, higher unemployment, stickier inflation, and more aggressive rate hikes in the near term (among other things)—CBO is telling lawmakers that projected deficits over the period 2023-2032 will be $900 billion higher than previously forecast (back in May 2022). Part of that jump is due to higher (revised up $295B) projected debt service over that period.
Keep this in mind, because I’m going to write more about rate hikes and their budgetary impacts in my next post....
Stephanie Kelton | Professor of Public Policy and Economics at Stony Brook University, formerly Democrats' chief economist on the staff of the U.S. Senate Budget Committee, and an economic adviser to the 2016 presidential campaign of Senator Bernie Sanders