Why Government Budgets Are Built on Fantasy Revenue Forecasts

The Fiscal Policy Podcast with Fexingo: Government Budgets, Stimulus, and Public Spending · May 30, 2026 · 7m · transcript

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…