I have made some doozy prediction errors on this blog, the most notable of which was incorrectly declaring ObamaCare “dead” after the Scott Brown election in January 2010.
I therefore want to catch up on a few of my recent predictions/analyses and compare them with subsequent events. My recent track record is a bit better.
First is a recent one I sort of got wrong. In early February I analyzed the President’s trade message and the signals he was sending about the Panama and Colombia Free Trade Agreements (FTAs). While I didn’t make a concrete prediction, the point of my post was to be skeptical that the President would ever move these two FTAs forward. It appeared that he was setting himself up to do the Korea FTA only, and to allow the Colombia and Panama FTAs to languish indefinitely.
Since then the President has begun to move forward on all three FTAs. This is great news, and I’m happy that my skeptical lean from early February was incorrect. Kudos to the President for moving all three FTAs.
Second is my March 4th prediction for the final spending level in the FY11 appropriations battle. The day after negotiations began I wrote:
I predict a final enacted non-emergency discretionary spending level of $1,052 B.
The final enacted level was $1,050 B. I missed the mark by only $2 B.
Third is my simple analysis from three days ago, when I wrote of the President’s new budget outline:
In this scenario, $4 trillion of deficit reduction over 12 years translates into about $2.8 trillion over 10 years.
As with the FY11 appropriations prediction, I calculated this number from a simple back-of-the-envelope calculation.
Today Lori Montgomery reports:
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blockquote>“Under the Administration’s estimates, the president’s framework saves $2.9 trillion over 10 years and $4 trillion over 12 years,”
So my $2.8 trillion estimate was off by only $100 B (or less, depending on the second decimal place) over 10, and my conclusion that the President’s new budget outline contained “$3 trillion or less of deficit reduction over 10 years” was correct.
Having patted myself on the back, I’ll remind you of my most recent guess, which will take some time to evaluate. On Tuesday I wrote:
There is a high probability of incremental spending cuts being enacted this year and next as part of debt limit legislative struggles. I’ll make a wild guess of $100B – $300B over 10 year range.
There is a moderate chance (1 in 3) of an incremental, slightly bigger (maybe $300B – $500B over 10 years) deficit reduction deal before the 2012 election. The President would trumpet such a deal as a good first step, but it appears this would fall far short of what S&P says is needed.
Given the President’s apparent budget strategy, there is at the moment a vanishingly small chance of a big medium-term or long-term deal like that described by S&P as necessary to avoid a possible downgrade, ($3-4 trillion over 10 years, with even bigger long-term changes to Social Security, Medicare, and Medicaid).
If you think these latest predictions are wildly off, please let me know how and why, either in the comments or by email.
(photo credit: Jeff Seeger)