In A Few Weeks, Everything We Currently Think About Future Deficits Could Change

Within the next few weeks, the Congressional Budget Office — which provides the hard data and projections regarding the debt and deficit — will release updated numbers, potentially upending the current debate about the size of the deficit.

CBPPYesterday, the Center on Budget and Policy Priorities' Richard Kogan unveiled a new chart that New York Times Columnist Paul Krugman interpreted to mean that the deficit problem is almost entirely solved.

His conclusion is related to the ideas that the most effective and painless solution to the deficit is additional growth and that spending is not fundamentally the problem.

However, Kogan also reminded us of a major potential shift coming up in the discussion of the deficit in his article.

Every so often, the Congressional Budget Office updates their estimates and projections given new economic data and new budgetary baselines.

It could go either way. As Kogan says in his initial CBPP report:

By themselves, new CBO estimates could make the challenge hundreds of billions of dollars easier or harder, and at this point we don’t know which.

The last time that the CBO updated their stats — statistics that form the foundation of the entire discussion of debt and deficits — was August 2012, essentially ages ago economically and fiscally.

FREDSince then, the fiscal cliff was averted.

Even more, the new policies that fueled Kogan's chart — a chart that Krugman said convinced him that the deficit was basically fixed — have gone into effect.

Even more, the civilian unemployment took a sincere and somewhat unexpected dive, heralding new, positive economic fundamentals.

What this could mean is that updated data from the CBO in a few weeks could paint a much rosier picture of the future of the debt and deficit. In that case, the calls for additional cuts to government services on top of the sequester could be rebuked with these new projections.

On the other hand, the projections could mean that the severity of the deficit has in fact grown, and that the situation has become more dire in the eyes of budget hawks.

Still, though, the point is that the fundamental values that form the crux of the debate are bound to change very soon, and the difference could be in the hundreds of billions.