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Politics: What a surprise: The CBO wild-ass guessed about ObamaCare fines

Published by: Dan Calabrese on Thursday September 20th, 2012

Dan Calabrese

By DAN CALABRESE - So they were off by 2 million. Guessing is hard!

The real news here is not that the CBO now thinks it underestimated how many people would get stuck paying the fine for not having health insurance under ObamaCare. Yeah, they said 4 million and now they think 6 million. No one should be surprised by that.

The real news is what this should serve to remind us: Government projections are wild-ass guesses. Always. Remember the original projection upon the creation of Medicare that it would cost less than $100 billion a year by 1990? Right . . . never mind!

But here's why it's a problem: Much of the selling of ObamaCare was based on such projections. The CBO, using the garbage-in-garbage-out numbers provided to it by Harry Reid, breathlessly told us that ObamaCare would reduce the deficit by around $90 billion over 10 years, and that its overall 10-year implementation cost would be less than $1 trillion. Of course, no one has any idea what it will cost. Just as they've already had to revise by 50 percent the estimate of those who will be fined, they're sure to end up revising every other number too - or just wait until the actual costs come in nowhere near what they guessed.

Now, it's hardly a surprise that the government can't guess in 2010 what's going to happen in 2019. No one should really expect that they can. But CBO projections are often treated as gospel truth by the media, and especially by those dopey media "fact checkers" who rate Republican statements "pants on fire" by citing CBO projections that contradict what Republicans say will actually happen. Because the CBO is "non-partisan" (even though it's actually teeming with Keynesians), it is regarded by the media as credible and above politics. But even if it was, that wouldn't mean its guesses about the future were necessarily accurate. (By the way, Republicans love to cite the CBO when it suits their purposes too, and that doesn't help things.)

The same thing happens when Congress and the president agree to spending deals (not that we actually have a budget) that include long-term spending cuts in the "out years." The media will tell us that the deal cuts the deficit by such-and-such an amount over 10 years, as if that's actually going to happen. Of course, it never does. As soon as the scheduled spending cuts are about to happen, Congress cancels them, citing some emergency or whatever. It's going to happen in December with Taxmageddon and the accompanying defense sequester. There's no way Congress lets either one happen.

The issue here is that Americans need to stop taking these long-term projections seriously. They are meaningless. Of course the CBO didn't know in 2010 how many people would have to pay the fine. It doesn't know now either. It just changed its guess. And by the same token, it doesn't know what ObamaCare will cost either. No one will know that unless we actually get to implementation (which we hopefully never will) and we see what happens. You can pretty much take it to the bank that it will cost a lot more than originally promised, but you can tell nothing from what anyone is forecasting today.

This latest revised guess simply serves as the latest illustration of this phenomenon. Congress passes massive spending measures, guesses wildly at their long-term costs, and the media reports their wild guesses as if they mean a damn thing. What do you get when you do business like this? How about $16 trillion in debt and rising?