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CBO Is More Optimistic than I Am

The CBO has its Economic and Budget Outlook out:

http://www.cbo.gov/ftpdocs/108xx/doc10871/01-26-Outlook.pdf

The two most noteworthy of CBO's analytical judgements, from my perspective:

  1. Unemployment is not going to get much higher, but it is likely to stay above 8% until the second half of 2012 (and there are, of course, risks to the forecast that would make matters worse).

  2. If we can stick to PAYGO over the next decade, we probably won't have an exploding-debt-and-deficit problem until the 2020s: we still have a decade to figure out how to get a government that has the means to live and lives within its means.

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