Good Reporting on the Deficit and Taxes in the WaPo
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Steve Verdon | Thursday, May 5, 2005 |
Usually I only get to complain about the reporting of the deficit in mainstream outlets. However, this story in the Washington Post (which James noted below) is a pleasant surprise.
For that fiscal year, the government recorded a $412 billion deficit, the largest ever in nominal dollar terms, although not as large as some of the deficits of the 1980s when measured against the size of the economy. The 2004 mark was up from 2003’s $378 billion deficit, which topped 2002’s $158 billion deficit.
Nominal dollars, referencing the deficits of 1980s and talking about the debt as a share of the economy! My God what is the world coming too? Will cats be living with dogs next? Usually most reports tend to focus only on the deficit being the largest ever with no mention of adjusting for inflation let alone as a percentage of GDP. Is this change due to the influence of blogs? I dunno and frankly I don’t care. I’m just happy with the improvement in disseminating information.
As for the improvement in the budget situation it is indeed temporary as the article notes. For example at the top of the second page is this little skunk,
Also, by next year, costs from the new prescription drug benefit should start rolling in.
My guess is this program is going to be far more costly than even the most pessimistic forecasts we have today. These programs always cost much, much more than initially believed. Medicare is a great example of a program that is projected to cost $X and in reality costs something closer to $10X.
About the Author: Steve has a B.A. in Economics from the University of California, Los Angeles and attended graduate school at The George Washington University, leaving school shortly before staring work on his dissertation when his first child was born. He works in the energy industry and prior to that worked at the Bureau of Labor Statistics in the Division of Price Index and Number Research.
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"These programs always cost much, much more than initially believed. "
Especially when they're written in such a way as to preclude bargaining for good prices.
You just know the drug companies are going to structure prices, especially on new drugs over coming years, in order to soak Medicare. Medicare will be a sitting duck, waiting to get, um, fleeced.
The predicted costs for Medicare were grossly overoptimistic too...
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