Latest Congressional Budget Outlook For 2012-2022 Released, Says Real Unemployment Rate Is 10%

[stockholmer]

http://www.zerohedge.com/news/latest-congressional-budget-outlook-2012-2022-released

What do the NAR, Consumer Confidence and CBO forecasts have in common? If you said, "they are all completely worthless" you are absolutely correct. Alas, the market needs to "trade" off numbers, which is why the just released CBO numbers apparently are important... And the fact that the CBO predicted negative $2.5 trillion in net debt by 2011 back in 2001 is largely ignored. http://www.zerohedge.com/news/speaking-credibility-here-cbos-2001-forecast-which-predicted-negative-25-trillion-net-debt-2011 Anyway, here are some of the highlights. 2012 Deficit: $1.1 trillion; 2013 Deficit: $0.6 - yes, we are cackling like mad too... Unemployment to remain above 8% in 2012 and 2013; will be around 7% by end of 2015; to drop to 5.25% by end of 2022.

This forecast is utterly idiotic and is completely unattainable unless the US workforce drops to all time lows and the US economy generates 300,000 jobs a month for 10 years. Needless to say, CBO assumes the best of all worlds in this meaningless forecast. But here is the kicker: "Had that portion of the decline in the labor force participation rate since 2007 that is attributable to neither the aging of the baby boomers nor the downturn in the business cycle (on the basis of the experience in previous downturns) not occurred, the unemployment rate in the fourth quarter of 2011 would have been about 1¼ percentage points higher than the actual rate of 8.7 percent" translation: CBO just admitted that the BLS numbers are bogus and real unemployment is 10%. Thank you



Here is the CBO's alternative forecast which is a little closer to reality:

CBO has developed budget projections under an “alternative fiscal scenario,” assuming—instead of current law—that certain tax provisions that have recently expired or are set to expire (including most of the provisions in the 2010 tax act but excluding the Social Security payroll tax reduction) are instead extended, that the AMT is indexed for inflation after 2011 (starting from the 2011 exemption amount), that Medicare’s payment rates for physicians’ services are held constant, and that the automatic enforcement procedures of the Budget Control Act do not take effect. Under this scenario, deficits from 2013 through 2022 would average 5.4 percent of GDP, compared with the 1.5 percent in the baseline.

Some views on SSN and Medicare...............

snip

much more at link above

the full document: http://www.scribd.com/document_downloads/79972330?extension=pdf&from=embed