CBO Overly Optimistic about Economic Growth and the Federal Debt

CBO

Introduction
The Congressional Budget Office’s (CBO) latest projections of budget and economic conditions over the next ten years indicates the economy will grow slowly this year at a 1.4 percent rate after being adjusted for inflation.[1] CBO attributes the short term slowdown to the recent fiscal cliff deal that raised tax rates and the Budget Control Act that will reduce spending beginning March 1. In subsequent years, CBO expects these fiscal drags to dissipate and the economy to recover at a faster pace, due largely to a rebound in the housing market. However, the higher tax rates are here to stay, and CBO has apparently failed to account for the extent to which these tax increases will reduce long term investment, hiring, and work...More



Categories: Financial News, Headlines

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