Tuesday, April 13, 2010

I am from the federal government and here to help

The chart is a projection of the cash flow deficit for the Social Security "trust" fund.    Notice two things.  First, it is larger than it was projected to be even a few years ago.  Second, when combined with the pension deficits rampant in public entities, it shows that governments are not very good managers of long term obligations.

If you believed that the CBO projections on the recently passed health care bill were anything but rosy scenarios (this is not the name of a Puerto Rican economist who makes these estimates), you may now reinstate your previously suspended disbelief.
The second chart, from Taxprof blog is a simple one.  It projects the increases in income tax rate and capital gains rate over the next couple of years.  If you believed that economic growth and capital formation would help us out of the problem above. Refer to the suggestion above.

And you wonder why Thomas Carlyle called it the dismal science.  But then Carlyle also said "A man lives by believing something: not by debating and arguing about many things."

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