Hope for the Best, Prepare for the Worst

In the 10-year path of the President’s budget, the deficit never falls below $500 billion, and it rises to $712 billion by 2019. But even those disturbing figures, reflecting record high deficits, rely on economic assumptions that are significantly more optimistic than those of private forecasters. In fact, assuming the Blue Chip consensus economic forecast, and applying administration methodology, budget deficits would be more than $750 billion higher than the administration projects over the next 5 years. Assuming a more adverse economic scenario – the same that is being used by federal regulators to “stress test” the nation’s banks – budget deficits would be nearly $1.2 trillion higher than the administration projects over the 5-year window.

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