The latest figures show that consumers are still spending like crazy, new cars are flying off the lots, the stock market is making a lot of people feel rich and, as a result, the government's tax take is up. At the same time, Latta noted, spending is down in some important places. Medicare, which analysts once assumed would grow at least 10 percent a year forever, is actually down about 2 percent below last year's level. All things considered, Latta said, OMB might be a little too conservative, at least in the short run. The difference between those two numbers conveys a sense of just how difficult it is to predict the surplus.
Economists note that the job is all but impossible to do with complete accuracy.
Economists say that even a recession might not drastically alter the forecasts, at least over the long run. While they don't predict it in any given year, forecasters factor in a downturn by dialing back their growth estimates throughout the 15-year projection. Some analysts warn that the greatest danger to these rosy estimates comes not from any economic peril but from the natural tendency of a big surplus to burn a hole in lawmakers' pockets. While DRI's Latta has a larger surplus estimate than the administration for this year, her estimates for the next 10 to 15 years are much smaller than the numbers the White House rolled out yesterday. Our baseline says Congress isn't going to let the surplus sit there.