CBO Facts and Figures

The Congressional Budget Office (CBO) released its Budget and Economic Outlook for 2012-2022 last week.   In its 165 pages I found a few interesting facts and figures.

• The federal budget deficit for the year ending September 30, 2012 is projected at $1.1 trillion.
• This will be the fourth consecutive budget deficit in excess of $1 trillion.  $5.4 trillion in debt will have been added in the last 4 years.  To put this in perspective, federal debt held by the public was only $5 trillion in 2007 meaning that overall debt held by the public has doubled in 5 years.
• Social Security will be running an annual cash flow deficit between taxes collected and benefits paid over each of the next 10 years.  The projected deficit is $60 billion in 2012 but it is expected to increase to $168 billion in 2022.
• We hear a lot about the need for spending cuts but the reality is that the federal budget could be balanced by 2022 based on CBO projections if we just held overall spending to around 2% per year with no increase in taxes.  When do you ever hear that?  This chart prepared by Daniel Mitchell of the Cato Institute paints the picture.  Bear in mind, these are the CBO numbers assuming the Bush tax cuts remain in place.  Revenues will continue to increase due to inflation, a growing population and economic expansion.

• If the Bush tax cuts are not extended, American taxpayers will be paying an additional $2 trillion in taxes over the next ten years on top of what is shown in the chart above.

This chart from the CBO Report shows how dramatic this tax increase would be on individual taxpayers.

• If you want to see how big the problem is with the housing depression this chart from the CBO shows it graphically.  Vacant housing units comprise about 14% of all total units.   This amounts to roughly 2.1 million excess housing units based on CBO estimates.  It will be difficult to make real progress on the economy until this problem resolves itself.

Vacant Housing Units
(Percentage of total units)