Sunday, November 20, 2011

CBO and OMB both flawed

I was trying to produce an even better model but have temporarily abandoned it. There are numerous small problems that exist, such as:

1. What is "net interest"? I assume it is interest paid, less receipts from the Federal Reserve, and so that number is in my model. But I can't even find good numbers on what net interest was in 2010. Was it 228, which is what I am using from the Treasury? That seems to be the number. But the CBO says it was 196 and OMB says it was 196. What about 2011? I have 266 from the Treasury, CBO says 221, and OMB says 205.

2. What is "Defense Spending"?  In 2010, per the Treasury, "Defense-Military" outlays were 667 and in 2011 it was 678.  Per the CBO, in 2010, "Defense" outlays were 714, and in 2011 were 712.  Per the OMB, in 2010 "Security" outlays were 815, whereas "Security" funding levels for 2010 were 682.8 (including Defense of 530), and in 2011 "Security" outlays were 891, with "Security" funding of 714.

3. What is "Mandatory Spending"?  Treasury doesn't use the term.  The CBO says that "Mandatory spending" in 2010 was 1913.  OMB says that outlays in "Mandatory programs" was 1954 in 2010.

4.  What about "Social Security" spending?  Treasury says the spending in 2010 was 696, CBO says it was 701, and OMB also says it was 701.  But for "Medicare", in 2010, Treasury says it was 450, CBO says it was 520, OMB says it was 446.

In conclusion, I am convinced that the CBO and OMB numbers are both unreliable and would use them only for comparison purposes.  I believe the Treasury numbers are very reliable.

I am going to continue to use my model for now, which is split into 5 categories: Social Security, Medicare, Medicaid, Interest, and Other.

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