Let’s investigate CBO deficit projections vs what actually happened.
A friend of mine does not believe CBO projections because he thinks they are biased on the high side and the TCJA II will revive the economy.
I don’t believe CBO deficit projections because history shows CBO estimates are consistently on the low side.
Please consider the WSJ article The Path to Record Deficits
In 2000, the federal government actually ran a surplus and the Congressional Budget Office, Capitol Hill’s nonpartisan scorekeeper, projected the Treasury would keep collecting enough revenue to pay for all government programs and generate continuing surpluses.
Fast-forward to 2025, and the U.S. is running record deficits outside of wars, recessions or crises. The nation’s publicly held debt is nearing 100% of gross domestic product and is projected to surpass the post World War II record of 106% in a few years.
What happened?
It wasn’t a single event but a mix of factors: an aging population, tax cuts, wars, the 2008 financial crisis, expanded healthcare spending, the Covid-19 pandemic and rising federal assistance to households. Both parties played a part. Democrats did little to reverse that tide of red ink when they controlled Congress and Joe Biden was president. Now, Republicans and President Trump are pushing a tax-and-spending megabill that would add trillions to deficits, compared with letting tax cuts expire as scheduled.
Here’s a look at how we got here. The solid black line is reality. The dotted lines are CBO’s moment-in-time forecasts of a future that never happened.
The June 2025 projection reflects a WSJ analysis of CBO estimates of change in outlays and revenues from the One Big Beautiful Bill Act [OBBA] passed by the House of Representatives May 22, including resulting increase in debt service, as a percentage of CBO’s January 2025 GDP projections.
Note: Estimates do not include the Senate bill released this week. Source: Congressional Budget Office
Surplus Lies
Nearly every year, debt rises more than the alleged deficit. This is not a fiscal vs. calendar year distortion, but an ongoing deficit lie.
For example, there were alleged budget surpluses in four consecutive years, 1998 through 2001. Yet debt only fell once, in the year 2000, by 113.875 billion vs a purported budget surplus of $236.241 billion.
2001 had a reported surplus of $128,236 billion. Yet ,debt rose by $281,223 billion.
For 2020, the reported deficit was $3.132 trillion but debt rose by $4.546 trillion. That’s a whopping negative discrepancy to the tune of $1.414 trillion.
I discussed this on Nov 27, 2022 in The Budget Deficit Big Lie and When Will Soaring Debt Finally Matter
No Recession Forecast Ever
The CBO never factors in recessions nor government responses to them. Another recession is coming and deficits will balloon again.
And Trump’s Tariffs and deportations are not factored in. Both will be negative to GDP.
Governments always overstate benefits and understate costs.
So take the CBO deficit projections and increase them because that’s what going to happen.
The Senate improved on OBBA but you may as well believe in the great Pumpkin if you think Trump’s fiscal plans will reduce the deficit.
Big Changes to Trump’s One Big Beautiful Act
On June 16, I noted The Senate Makes Big Changes to Trump’s One Big Beautiful Bill but don’t expect miracles.
The biggest changes are SALT and Medicaid, but there are many significant details.
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As always, Trump has lied to his minions – and all Americans.
Now, again in office, trump has:
Yet his minions and sycophants can not admit they have been taken in by a carnival barker and pathetic shill.
The Deficits will only get wider under trump as he is bringing the economy to a standstill AGAIN!
If he takes over the Federal Reserve ~ the flood of money Trump releases will destroy the dollar and our banking system. This in turn will destroy our nation as economic leader of the formerly free world. Our banking system is the backbone of this country. Do not forget that fact!
Will Trump go down in history as the only person to bankrupt both a Casino and the United States of America?
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But the political views of CBO’s analysts are even more biased. A whopping 78.9 percent of CBO employees with matched voter registration records are Democrats, compared to just 12.5 percent who are Republicans, and 8.6 percent who are independent or unaffiliated—a shocking tilt of the scales to the left.11-12 This Democrat advantage of approximately D+66 is higher than the advantage among career bureaucrats in any federal agency.13 Many of those labeled as independent or unaffiliated also appear to lean left, with donation records showing political contributions to Democrat candidates and causes, suggesting the true share of liberal employees may be even higher.
CBO Is Biased—And So Are Their Coverage Loss Estimates
Maybe you can’t set aside your narrow minded MAGA view but there are people that can set aside their personal beliefs and report facts.
Wall street dealers make a fortune off of issuing and managing federal debt. They don’t want to give that up. Ever. Wall Street ghouls will skim debt issuance until we all sink unto death debt spiral. They will have their fortunes and escape. Those that remain will be arrested and tried and who knows what.
Big, Beautiful Deficits!
Excellent point that debt is increasing faster than reported deficits. Public sector spending is an addiction at all levels in the US: city, county and state as well as federal. It transcends parties although at the state level and local level Republican dominated states are less bad. It will end in tears.
Yes, consider the double and triple dipping by public safety officers and other government employees.
Limit should be ONE PENSION!
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A real estate mogul masking as president knows very little about how productivity works to help advanced economies grow further. We live in a kleptocratic economy now.
Said it for a long time. We are going down the path of Japan. Demographics not the same but debt to gdp getting worse.
Good post. Also appreciate the explanation of why the debt generally goes up by more than the annual deficit. Isn’t it true that from time to time there is other “off budget” spending aside from SS?
It is almost the default for govt to in various ways lie.
There’s the intelligence community black budget. Figure at least $100B per year for that.
You mean that Big Brother is watching us?
Rest assured, if you are a thinker of any consequence and cross any unwritten lines, they can or will create a case against you. Our complex tax laws make compliance impossible.
When ICE is finished with the immigrants they will need jobs. Trump will likely keep them employed capturing those of us that practice the first amendment.
Sycophants like JoJo and Patrick will be in uniforms similar to the SS of times past.
Think if it as Trumps ethnic or “social cleansing”.
That’s what dictators do…
Trump does not care about rental income. He uses his charisma to scam loans out of banks for his (failed) RE and other ideas. He brings the same way of thinking to the Federal Govt. He will borrow 4-5 trillion to spend like a drunken sailor and give his buddies millions of dollars in tax breaks. He will leave the mess for someone else to clean up. Despite his danger to this country, as long as the very rich continue to buy Treasuries, the debt really doesnt matter much. Need more money? Borrow more. This has worked just fine since the 1980s.
Nothing new from Trump. Kick the can down the road for a couple more years to reelect as many worthless Republicans as he can. If he bombs Iran, MAGA is done. How can the USA compete long-term with countries like Russia and China, which plan and govern for decades ahead? That actually seek to serve their own people and nation? We can’t. Americans and America is a long way off from ever electing representatives who actually govern responsibly. It’s going to take some great shocks to our economy before people actually wake up to the fact that we elect bought and paid for charlatans.
Trump has already given the order to bomb. Most of MAGA will justify it after the fact.
US doesn’t need to compete with Russia. Russia is nowhere in the race where it matters (AI/Tech etc). China is the real competition. They will be laughing to the bank once we hit Iran. They might help Iran just to the extent that keeps us mired in. Israel will quickly extricate itself and thank us for doing the long fight for them.
If Trump loses 20% of his supporters his movement is electorally untenable.
wrong. as was explained thousands of years ago in “republic of plato”, representative democracy works perfect. that’s the problem. when a nation are a bunch of assholes, they elect themselves. assholes. trump and mamala and biden and bush and clinton crime families are perfect reflections of amerikan assholes from bottom to top. just like schumer and mitch and speakers etc. are. the fools who cannot look in the mirror will go to their dirt naps being fools.
Tax cuts always trump deficits in politics. But everyone knows this.
The saying in Washington is debt has no constituents. But truly they know banks love debt because it means more profits.
If Trump is a Russian agent, everything he’s doing makes sense. He’s damaging America with a trade war which is hurting consumers and American importers. Trump doesn’t give any weapons to Ukraine but loads Israel up with weapons. Trump insults NATO and doesn’t cooperate with them. Putin loves it all. With Trump the presidency is for sale. He’s running an extortion/protection racket, shaking down countries and billion airs like Bezos, Zuck and Musk. Trump is openly corrupt, seeking money, business deals that he doesn’t have a dime into; also royalty deals on hotels other people pay for. Trump’s done a lot of this with Russians n the past….Trump Soho in Manhattan with Felix Sater (a Russian) & several similar deals in Florida. Many Russians bought condos. Trump received approximately 18% of the proceeds with no investment in projects. Putin loves that Trump is not giving weapons to Ukraine. He loves NATO with no America. He would pay in a lot of untraceable gold to get those things.
yep
just ck out “all the presidents tokens”
https://www.citationneeded.news/issue-85/
Crypto markets are as opaque as CDS markets. No one knows the counterparties. This sets up massive opportunities for money laundering.
Since Trump has taken over the cross border drug trade?
Trump did bribe people to buy his currency!
Fentanyl deaths are continuing at the same rate, so it getting in somehow?
And that sir is why call options on Russian Ruble futures have exploded in value!
The Ruble is up over 30% since January first.
Who does trump work for?
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It’s easy to imagine and tout disruptive new solutions. Then comes paying for them.
The solution to deficits is to spend less money, not more. The education system clearly failed you.
Now we can overlay “Global War on Terror” part 3. Those never costs as much as projected, right?
Trump will say that the new regime in Iran will pay for it. Remember how Mexico paid us for the wall?
did not the Carthaginians empty their treasury to defend their sliver of N Africa?
According to Israeli estimates, its interceptions of incoming missiles during an intensive bombardment costs as much as $285 million per night. Each Arrows 3 interceptor is priced at $ 2 million.’
https://x.com/ann123fitz/status/1936133796845519035
Would be cheaper to just let them hit.
correction. israel is amerikan pawn and bitch. those are amerikan taxpayer costs.
People like to spend money. Ever think about YOLO? Seriously what’s the point of not taking the fullest advantage of every day? I’ve never known anyone that was near death that said they wished they worked more or saved more. The only thing they say is they regret not DOING more!
Live!
Laugh!
Love!
… with the money stolen from future generations!
Credit & Debt always balance, that’s why it’s called a balance.
You cannot borrow from the future; we are not eating tomatoes & eggs that still have to be grown.
You only change the distribution of liabilities and assets.
People who dont care about future generations think this way. This is why they pass nothing to their kids and the cycle repeats itself.
Solid post since, for the first time in a VERY long time Trump’s name is only mentioned 3 times and the article demonstrates that debt has risen for 24 years save for the rounding error in 2000. 12 years Democratic Administiration, 12 years Republican Administration. My comment on the waste, corruption and grift is this–if the charge and fallout from robbing a bank is the same regardless of size, well, rob the largest bank you can if that’s your choice. Largest “bank” is the US Treasury / Fed, and that’s what’s happened. Interestingly enough, it’s the one bank that it appears you can rob without consequence which also happens to enrich the banking system at the same time.
Houston, we have a problem.
The mere fact w live on “deficits” as being gross (with Social Security Surplus Funds) then NET w/o Social Security is prima facia evidence of our inability to be serious and realistic about THE deficit.
Perhaps gold is a bullish investment.
I can construct a quick pie chart of possible scenarios, weighted by my guess of probability, then allocate a slice of investment to deal with each one. Despite the runup in gold, I am now thinking of a sliver on my chart for that. This is especially true with the “Genius act” that bodes to fragment the dollar and banking into potential crypto chaos, IMO. But even that now appears on the edge of my radar screen/pie chart.
When the most conservative president in decades, is Billy Boy, then there is a systemic problem.
Big Beautiful Bill = Big Beautiful Deficit
“What happened?
It’s very simple. The Fed began QE in Nov 2008, something they had never done in their 95-year existence, which ushered in 17 years of massive liquidity that ensured there was ample money to buy treasuries, even when the Fed wasn’t buying them.
It’s called Modern Monetary Theory for the newbs, and it’s the simplest reason (tip of the spear, if you like) why budget deficits have exploded. Any further explanation is simply a result of this fateful decision on the part of Ben Bernanke.
Gonna need at least a trillion for the war
Will there only be one war?
no. of course not.
Trump’s Immigration Crackdown Is Overwhelming ICE Facilities and Running Up Huge Bills
https://reason.com/2025/06/19/trumps-immigration-crackdown-is-overwhelming-ice-facilities-and-running-up-huge-bills/