Saturday, October 12, 2013

Truth in the Age of Niallism

This is too much fun not to post. Matthew O'Brien at Atlantic on Niall Ferguson's latest:
Here are three facts about how the 10-year budget outlook has changed in the past year: 1) the fiscal cliff deal raised $600 billion in new revenue; 2) the sequester, if left in place, cut spending by $1.2 trillion; 3) the CBO revised its projection for federal healthcare spending down by $600 billion. 
Harvard historian Niall Ferguson has a counterfactual take. Here's how he described how our debt trajectory changed the past year: 
A very striking feature of the latest CBO report is how much worse it is than last year's. A year ago, the CBO's extended baseline series for the federal debt in public hands projected a figure of 52% of GDP by 2038. That figure has very nearly doubled to 100%. A year ago the debt was supposed to glide down to zero by the 2070s. This year's long-run projection for 2076 is above 200%. In this devastating reassessment, a crucial role is played here by the more realistic growth assumptions used this year. 
This isn't a difference of opinion. It's incorrect. But it's incorrect for reasons that will escape casual readers.