Bull Trap definition and explanation from Investopedia:
A false signal indicating that a declining trend in a stock or index has reversed and is heading upwards when, in fact, the security will continue to decline.
A bull trap often causes some investors to buy the stock, but because the stock continues to decline after the initial signal, those who bought in are “trapped” in a bad investment.
That seems to be what we have now with claims of improvement in the annual deficit, being touted far and wide, including at Think Progress.
Per the latest CBO report via The Hill, CBO forecasts a drop, then a sharp rise in federal deficit (emphasis added):
The Congressional Budget Office on Monday lowered its deficit projections but still forecasts a sea of red ink for the nation’s fiscal future.
The nonpartisan CBO said the deficit will drop in 2014 to $492 billion from the $514 billion in had forecast in February.
It said the deficit will fall from 2.8 percent of gross domestic product in 2014 to 2.6 percent of GDP in 2015. [Read updated budget projections.]
The projected 2015 deficit would be the lowest since 2007 when it was 1.1 percent of GDP. It rose after that to 9.8 percent by 2009, as the President Obama sought to stimulate the economy through spending in the wake of a deep recession.
But the CBO said projected deficits will quickly expand again, with the deficit reaching 4 percent of GDP by 2022.
And by 2024, the federal debt is estimated to reach 78 percent of the economy, twice the 39 percent average of the past four decades.
The budget office warned that the aging of the population, rising healthcare costs and increasing interest payments on the debt will bring about the return to $1 trillion deficits by 2024 in the absence of legislative changes.
Here’s the chart from CBO’s report:DONATE
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