Why Government Budgets Are Built on Fantasy Revenue Forecasts

Episode 20 of The Fiscal Policy Podcast dives into the quiet scandal of official revenue forecasts: the ones governments use to build their budgets. Lucas and Luna walk through how the US Congressional Budget Office, state finance departments, and even local municipalities routinely overestimate revenue by 2 to 8 percent — and why that matters for bond markets, public services, and your tax bill. The anchor is the CBO's 2025 projection miss on corporate tax receipts, which were off by $63 billion in the first year alone. We look at the incentives: political pressure to balance the budget on paper, the rise of dynamic scoring, and why private-sector forecasters consistently beat official models. Plus: a concrete case from California's 2021 budget surplus that no one saw coming — because the state's own forecast said it wouldn't happen. Listeners walk away understanding why the phrase 'official estimate' is often closer to guesswork than science. #RevenueForecasting #CBO #FiscalPolicy #GovernmentBudgets #BudgetProjections #TaxRevenue #DynamicScoring #CaliforniaSurplus #CorporateTax #PublicFinance #Economics #BudgetGimmicks #ForecastError #StateBudgets #FederalBudget #FexingoBusiness #BusinessPodcast #FiscalPolicyPodcast Keep every episode free: buymeacoffee.com/fexingo