Saturday, June 26, 2010

New Prediction: we have until 2028

The good news is that I think we have a few more years before the financial collapse I see occurring. My new year is 2028, and my figures are as follows:

Year Debt GDP %
==== ===== ===== ===
2009 11,910 14,273 83
2010 13,410 14,563 92
2011 14,866 14,927 100
2012 16,109 15,300 105
2013 17,330 15,683 111
2014 18,780 16,075 117
2015 20,480 16,447 124
2016 22,511 16,889 133
2017 24,806 17,311 143
2018 27,382 17,744 154
2019 30,392 18,187 167
2020 33,823 18,642 181
2021 37,426 19,108 196
2022 41,210 19,586 210
2023 45,182 20,075 225
2024 49,354 20,577 240
2025 53,733 21,092 255
2026 58,332 21,619 270
2027 63,161 22,159 285
2028 68,231 22,713 300

Notes: 1. These numbers are much more optimistic than the previous figures. However, the problem still exists.
2. I'm using dates ending on 9/30 of each year instead of 12/31 as I previously did. It doesn't really make a difference except for the first few years.
3. I'm assuming GDP growth of 2.5%/year, whereas previously I was using 2%.
4. For revenue, I am using the CBO number of 2460 for 2011, assuming 10% growth in 2012-2013, and 5% growth thereafter.
5. For expenses, I am using the CBO numbers through 2020, but adding a 3% cumulative "fudge factor" starting in 2011. I assume that spending will be 3% higher than they project. After 2020, I assume that spending will increase 5%/year.
6. In none of these years does the annual deficit exceed revenue. If this were ever to occur, I think this would be a warning sign of an imminent collapse.

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Update 6/19/2012:

I am labeling this model A-2.  The debt projection seems spot on, but the GDP numbers are too low. I think this model has ongoing validity.

1 comment:

  1. http://www.cbo.gov/ftpdocs/102xx/doc10297/toc.html
    CBO Long-Term Budget Outlook

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