As an FYI, the starting point data I used was obtained from the White House budget history web page. Specifically, I looked at table 1.3 and used the data in "current dollars" and "as percentage of GDP." They offer budget projections to 2017. What is quite striking is that their rate of revenue increase and spending are considerably higher than the rates I've proposed above. Also, they assume economic growth rates of 4 to 6% per year! We have hit 4% and higher only 9 years out of the last 32 years with the last time in 2000 according to World Bank data. In the last 10 years, we have only hit 3% growth on 3 occasions. Of course, with a realistic road map to a bring the deficits and debt under control, the economy may perform better thus reaching the balance point sooner.
Below is a graph generated from a CBO report of budget estimates for 2011 to 2021. As you can see the growth of the two lines is much steeper and yet the two lines do not meet. I was not able to figure out what their economic growth assumptions were. I'm sure it is in there somewhere but I didn't find it in a quick scan of the data table.
Suffice to say, I'd like to see the types of charts I'm generating here rather X number of dollar of tax increases and Y number of dollars in spending cuts reported in fiscal cliff negotiations. The cited numbers are always relative to some unstated "baseline." Instead, they ought to show absolute dollar charts like what I have here. Also, the fiscal cliff negotiators probably have unstated economic growth projections that are unrealistic. I just wish the politicians would just tell the truth about the numbers!
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