by Calculated Risk on 1/31/2005 10:41:00 PM

The following chart shows the accuracy of the CBO's projections from 1981 to 1997.

Misestimates in CBO's Projections Made from 1981 to 1997


Source: Congressional Budget Office. Notes: CY = current year; BY = budget year.
 

When the CBO makes an error (see '80s or 90's) they continue to make the same error for several years running. We are seeing the same phenomenon now. The CBO is consistently underestimating the tax revenues, specifically Corporate and Individual Income taxes. Social Security taxes (now 38% of all Federal revenue) have been reliable.

As an example, in Jan 2002 CBO projected a unified deficit of 21 Billion for fiscal 2002 (ends in Sept). The actual unified deficit was $158 Billion. The primary causes for this miss were Individual Income Taxes (short $89 Billion) and Corporate Income Taxes (short $31 Billion). This pattern is repeated for 2003 and 2004.

Just a reminder: On January 29, 2002, George W. Bush said in his State of the Union Address: "... our budget will run a deficit that will be small and short-term". He was sure wrong.

by Calculated Risk on 1/31/2005 08:57:00 PM

Mort Zuckerman (US News & Report) writes: "A 'cure' worse than the cold"

Excerpt:

"[T]here is value in savings and self-reliance, in making private investment decisions, planning ahead, and increasing distance from the government. But there are other values in the very title of the program--Social Security. "Social" surely implies a contract to help manage poverty among the old and to know that our society provides a minimum income for all of our fellow citizens in their retirement years. And "security" means buffering the harshness and cruelty of the markets so that the well-being of the elderly is not dependent on shrewd stock picks and hot mutual funds that enrich some but fail the very people who need Social Security benefits the most.

Privatization thus gets things upside down. Social Security was not meant to re-create the free market; it was intended to insure against the vagaries and cruelties of the market and to permit Americans to count on the promise that the next generation will take care of them in their old age."

by Calculated Risk on 1/31/2005 10:44:00 AM

The Census Bureau's report today:

Sales of new one-family houses in December 2004 were at a seasonally adjusted annual rate of 1,098,000, according to estimates released jointly today by the U.S. Census Bureau and the U.S. Department of Housing and Urban Development. This is 0.1 percent (±9.4%) above the revised November rate of 1,097,000, but is 2.0 percent (±10.6%) below the December 2003 estimate of 1,120,000.

The median sales price of new houses sold in December 2004 was $222,000; the average sales price was $276,600. The seasonally adjusted estimate of new houses for sale at the end of December was 432,000. This represents a supply of 4.8 months at the current sales rate.

In 2004, there were 1,183,000 houses sold compared with 1,086,000 houses sold during 2003, establishing a new record. This is an increase of 8.9 percent (±3.0%).

by Calculated Risk on 1/27/2005 04:01:00 PM

The 4th quarter report of Housing Vacancies and Homeownership is now available.

The housing inventory increased 1.325 million units in 2004. Interestingly, 1.763 million more units were occupied by owner; more units than the overall inventory increased.

The number of occupied rental units decreased slightly for the year and increased in the 4th quarter. This is the 2nd consecutive quarter of an increase in occupied rental units - a trend change from the last few years.

The Home Ownership rate is at a record 69.2%.

by Calculated Risk on 1/24/2005 09:29:00 PM

An international climate change task force has issued a new report that "global warming is approaching the point of no return, after which widespread drought, crop failure and rising sea levels will be irreversible."

"An ecological time bomb is ticking away," said Stephen Byers, who was co-chairman of the task force with U.S. Sen. Olympia Snowe, R-Maine. "World leaders need to recognize that climate change is the single most important long-term issue that the planet faces."

See also: Institute for Public Policy Research: G8-Plus Group needed to tackle climate change.