March 8, 2012
Grading the Government's Ability to Forecast Revenues and Expenses
In my studies of the past four Obama budgets, I found a glaring and growing error in the administration's ability to forecast government revenue.
I decided to take a look at the FY1996, 2000, 2004, and 2008 budgets to see how the government matched up in its ability to forecast revenue and spending.
On government spending...
The government has pretty much overspent its projections for the past 12 fiscal years. It's interesting that the Bush Administration seems to have prepared for the increased entitlement spending, and yet the government still outspent those projections.
On government revenue...
The government is more dependent on economic cycles for revenue than it ever has been. We still have yet to reach the peak revenue years of 2007 and 2008. This is scary because the government needs higher revenues to feed its bloated bureaucracy. The more the government needs the revenue, the more likely they are to loosely spend money in a recession to "chase" recovery. How much will the government spend in the next recession?
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