Dylan Scott over at Talking Points Memo has an interesting story up about the Kaiser Family Foundation’s report showing that Obamacare premiums are coming in lower than the Congressional Budget Office had anticipated.
For example, the CBO had projected $320/month for a silver plan for a 40-year-old. Kaiser found the premium will be lower in 15 of the 18 regions it analyzed.
A few days ago, I posted that while you’re going to see the FY 2013 sequestration number as $85 billion, don’t believe that because, according to the Congressional Budget Office, it’s really only $44 billion that would get cut this year with the rest in future years (if the sequester went on that long, which of course it won’t).
Interesting case in point. On the front page of the WSJ weekend edition, they refer to the mythical $85 billion. But if you go to the bottom of the fold on page A4, there is a box with teeny-tiny print that answers your sequester questions. And there, for those who have persevered, it says “actual outlays of government dollars would fall by about $44 billion during this period [FY 2013], with the rest of the decline occurring later, according to the Congressional Budget Office. This is because outlays often lag the budget by months or years.” Ta da!
Obviously the smaller the sequester this year, the smaller the impact it will have both on the government’s ability to function and our overall economy. We all need to know the real number.
From “In Shovels, A Remedy For Jobs And Growth,” Eduardo Porter, NYT:
“At the end of last year, according to the nonpartisan Congressional Budget Office, the economy was still about 5.5 percent smaller than it would have been had it avoided the recession and kept growing along its long-term potential path, making full use of the workers and equipment currently sitting idle. … By the time we recover to our potential — which the C.B.O. expects will take until 2017 — the Great Recession set off by the implosion of the housing bubble more than five years ago will have cost us nearly half of one year’s entire economic production: about $7.5 trillion.
“We will be paying the price for years. The slump is hindering capital investment, stunting the careers of college graduates and encouraging workers to drop out of the labor force….” Emphasis added.
Every time I hear some Republican apoplectic about the debt we’re placing on our kids and the high taxes they will have to pay, I think of my own Millenial son who does not have a job commensurate with his education and is not on the career path he should be. I believe his earnings and achievements will be adversely affected for the rest of his life. I’m sure he would much, much rather pay higher taxes down the road on an income higher than what now seems in store for him. It’s not just the loss of money that’s so sad, it’s the loss of career satisfaction as well.
What’s worse than high federal deficits? Reducing the deficit too quickly.
The CBO projects that if the sequester takes effect on March 1, the federal deficit for fiscal 2013 will be $845 billion, the first time the deficit has been below $1 trillion in five years.
But the other side of that coin is their prediction that unemployment will stay above 7.5% all year and that GDP will grow at a pathetic 1.4%.
Recognizing that there isn’t going to be a big budget deal between now and March 1, President Obama is asking for more limited spending cuts and tax reforms to replace the sequester.
As we watch Europe fall off a cliff, let’s not forget that we ourselves will take a plunge on January 1 unless Congress pulls us back.
The CBO has gamed out three scenarios. If the Bush tax cuts expire and the automatic cuts in domestic and defense spending take effect, GDP will fall 1.3% between the fourth quarter of 2012 and the second quarter of 2013. So we’re talking another recession.
If the Bush tax cuts are extended, the payroll tax cut expires, and the automatic spending cuts don’t happen, GDP will grow by 1.7% in the same time frame. No new recession, but not great growth either.
If we keep on the same path, with all tax cuts extended (Bush and payroll) and no automatic spending cuts, GDP will grow by 5.3%.
I’m with Option 3. Let’s get some solid growth, and then we can deal with the deficits and national debt.
Embattled Farmers 