REPORTCARD2000.COM
Home Humor Top 10 List Detailed Home
Table of Contents Background
Analytical
Review Current Data Quotes Contact Discussion Board
The following is (1) an excerpt from the Chairman of the Senate
Budget Committee, Senator Kent Conrad, on July 11, 2007 and (2) a clarifying
response from the web host.
"The result has been that the $5.6 trillion projected
surplus he (President Bush) inherited has been wiped out." - Chairman Kent Conrad July 11,
2007
Included in the press release were graphs explaining his
points. In the following analysis are
comments on the images in the press release.
Here is a website link
for the chairman’s press releases.
Here is a
link to an analysis of the images of the
July 11, 2007 press release. The
analysis provides clarity on the tactics being used by the Chairman.
In response to Senator Kent Conrad’s press
releases, the following Letter to the Editor was submitted:
Today, July 11, 2007, Senate Budget Committee Chairman Kent
Conrad D-ND continues a deceptive Democrat tactic that has existed and been
advanced since 2001. In a press release
today the Chairman stated:
"The result has been that the $5.6 trillion projected
surplus he (President Bush) inherited has been wiped out." - Chairman Kent
Conrad July 11, 2007
The chairman's reference to the $5.6 trillion surplus comes
from The CBO Budget and Economic Outlook: Fiscal Years 2002-2011 issued in
January 2001. The $5.6 trillion
projected surplus conclusion is contained in the second
sentence of the Summary section of the 190 page baseline budget
document. What the chairman and others
choose to ignore is the balance of the report, including 11 pages of
uncertainties. It is important to note
if a CEO of a public company does not disclose a projection accompanied by
meaningful cautionary statements identifying important factors that could cause
actual results to differ materially from those in the forward-looking
statement, the CEO would be subject to a fine and prison sentence (Securities Act 1933).
Here are a few quotes from the same 2001 report the
chairman has chosen to ignore:
"Moreover,
projections that are quite different from the baseline also have some
significant probability of coming to pass. For example, the figure suggests
some probability, albeit small, that the budget might fall into deficit in
2006, even without policy changes." - Summary section
"The primary negative
risk is that the current slowdown might turn into a recession. Although
forecasters widely anticipated that economic activity would slow, the
deceleration has been surprisingly rapid. " - Economic Outlook section
"CBO's upward revisions were mostly driven by the increasing belief that acceleration in the
growth of information technology—which was a major force behind the investment
boom of the late 1990s--will continue to stimulate investment over the next
decade... ", followed later by, "Like consumer spending, spending by businesses on structures,
equipment, and software--known as business fixed investment (BFI)--weakened in
the second half of 2000 after a strong showing in the first half"-
Economic Outlook section
"In particular, it
is difficult to isolate the role of the extraordinary rise in the stock market"
and "Capital gains realizations,
which are not included in either GDP or taxable personal income, account for a
large part of the growth in AGI (Adjusted Gross Income)..." - the Revenue
section. Also included in the same
report is, "On average, the businesses listed by the Nasdaq stock market,
which include many well-known high-technology companies, lost about half of
their market value between March 2000 and the end of the year. High-technology start-ups lost much of their
attractiveness to investors and faced greater difficulty raising funds in
capital markets." - Economic Outlook section.
"A major risk to CBO's short-term forecast is that consumers and businesses will curtail their
spending much more than CBO assumes, leading to a recession this
year." - Economic outlook section
"Thus, the short-term
outlook for the economy, and hence for the budget, is particularly
uncertain when the business cycle may be approaching a turning point." -
Uncertainty of Budget Projections section.
"(T)he baseline
projection is not a prediction of future outcomes." - Spending Outlook
section
"Figure 5-1 is
intentionally somewhat fuzzy because the uncertainties are themselves
estimates." - Uncertainties of Budget Projections section
"The longer-term
outlook is also unusually hard to discern at present." - Uncertainty
of Budget Projections section
"The pessimistic trend scenario reverses most of the
assumptions of the optimistic scenario and
assumes that the economy reverts in many respects to its situation before
1996." - Uncertainty of Budget Projections section.
There are many more possible excerpts; however, the point
is clear there is more to a 190 budget projection document than a single
sentence.
To allow Chairman Conrad a pass on his tactic of citing
only one sentence in an often-referenced report without asking him to explain
how he ignores the balance of the report is inexcusable. The obvious reason the senator is confident he
can use the tactic cited above is because, until now, the tactic has not been
challenged.
____________________________
At the discretion of the Editorial Board about inclusion of
this section in the above letter, I have developed a website explaining what
occurred during the budget surpluses and subsequent deficits of the 1990s and
2000s. Also, included in the website are
all the excerpts above in the context of the actual January 2001 report. There is no advertising on the website. The website is www.ReportCard2000.com.