In my last post I asked this same question about the House Budget Committee. As my readers saw in that one, the attempts at deficit reduction leading to budget balance were so severe that they implied that if the House budget were followed, and if the economy did not collapse before the decade projection period ended due to a collapse of aggregate demand, then private sector deficits would be produced in every year from 2017 – 2025. In addition, since the budget provided for severe cuts to federal spending designed to benefit poor people and the middle class, it was likely that the private losses from this budget would be concentrated on the people who can least well absorb them.
In this post, I'll review the sectoral financial balances implications of the White House/OMB projections to see how they compare to those of the House Budget Committee. I'll begin by repeating the explanation of sectoral financial balances basics I included in my earlier post. Read more about When Will the White House and OMB Ever Learn About Sector Financial Balances?
The Peter G. Peterson Foundation (PGPF) and its allied army of associated deficit hawks want the Congressional Budget Office (CBO), the General Accountability Office (GAO), and the Office of Management and Budget (OMB) to do fiscal gap accounting and generational accounting on an annual basis and, upon request by Congress, to use these accounting methods to evaluate major proposed changes in fiscal legislation. Generational Accounting is an invalid long-range projection method that doesn't take into account inflation, the projected value of the Government's capability to issue fiat currency and reserves in the amounts needed to fulfill Congressional appropriations, and re-pay its debts, the projected non-Government assets corresponding to government liabilities, the likely economic impacts of Government spending, surpluses, and deficits, the impact of accumulating errors on projections, and the biases inherent in pessimistic AND contradictory assumptions. It is a green eye shade method that ignores both economic and political reality.
If you want America to end deficit terrorism and austerity, and to have the fiscal policy space it needs to begin to restore the American Dream, then you need to defeat proposed policies or legislation which puts building blocks in place to bias fiscal policy towards austerity and the economic decline it will surely produce for ourselves, our children, and for their children. Proposed policies and legislation of this kind must be defeated for the following seven reasons. Read more about Beware of Policies and Legislation Based on the Generational Accounting Scam
The OMB (“o” stands for opaque) report: OMB Report Pursuant to the Sequestration Transparency Act of 2012 (P. L. 112–155), Appendix B. Preliminary Sequestrable / Exempt Classification, classifies accounts as sequestrable, exempt, etc.
One reason to be “exempt” is funds were already sequestered elsewhere in the budget. Makes sense on the face of it.
But for 487 entries out of 2126 in Appendix B, or 22.9%, are being sequestered from some unstated part of the government.
Patrick makes his analysis of Appendix B available for download as a CVS file. I took it and turned it into this handy online spreadsheet. Read more about Preliminary Sequestrable Exempt Classification by OMB Account and Type of Budgetary Resource