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Population Growth and the CBO

As I believe I’ve mentioned before, I think it’s pretty silly that people in Washington DC in 2010 spend a lot of time talking about bleak CBO forecasts of the budgetary situation in 2062. As Doug Henwood points out, one reason the long-term forecasts for entitlement spending look so bad is that the Congressional Budget Office has decided that the future U.S. economic growth rate will be slower than it’s been historically. They’re somewhat pessimistic about future productivity growth, and as Brad DeLong emphasizes also forecast a deceleration in the labor force growth rate.

Either of those contentions might be true, or they might not be true, but the point I would emphasize is that neither of them are beyond our control. If instead of looking at the CBO’s projection you look at the CBO’s model you’ll find that one thing they’re saying is that making it easier for immigrants to move here will improve out outlook considerably. Now perhaps we won’t do that, but perhaps we will. And I think that if more people understood this aspect of the problem, we’d be more likely to become more welcoming to foreign workers.

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