The Hill reports:
The nonpartisan Congressional Budget Office said Friday that President Obama’s 2013 budget will hurt the economy in the long term, arguing the larger deficits it would produce would reduce the amount of capital available to businesses.
After five years, the CBO says the Obama proposals would reduce economic output by between 0.5 percent and 2.2 percent.
Larger deficits caused by the budget would cause the government to issue more bonds, sucking up private capital to finance its debts and thereby reducing the funds businesses could use to expand and hire, the CBO said. An increased tax on capital gains included in the president’s plan would also tend to reduce private capital, it says.
The findings are not out of line with the projections offered by the Obama administration, which acknowledged that under the president’s budget, the nation’s “fiscal position gradually deteriorates” after 2022.
One chart included in the administration’s analysis of Obama’s budget shows the country’s economy ceasing to exist past the year 2027.