Non-Reality-Based Economics And Fiscal Policy

by Pejman Yousefzadeh on May 12, 2009

In a day and age in which so much of the media seems to have put aside its critical skills and adopted, instead, unthinking adoration of the Obama Administration, it is reassuring to see that there remains some skepticism of Administration claims on issues like the economy in general and the nation’s fiscal health in particular:

The White House on Monday projected 2009 and 2010 federal budget deficits far higher than it forecast just two and a half months ago, even as it continued to defy most experts and predict that the economy is headed for a strong comeback starting late this year.

Economists scoffed at the latest administration predictions.

“If they keep playing this game, they’re going to have real credibility problems,” predicted Brian Bethune, the chief U.S. financial economist at IHS Global Insight, an economic research firm.

That attitude of derision among economists is not atypical, as the story makes clear, and extends to reactions concerning the Administration’s excessively optimistic claims regarding the unemployment numbers:

The biggest discrepancy involves unemployment, which reached 8.9 percent last month. The White House sees the number declining to an average of 7.9 percent next year, well below the [Congressional Budget Office's] 9 percent estimate and the blue chip 9.5 percent.

“The (Obama) unemployment number is crazy,” said Roberton Williams, senior fellow at the Urban Institute-Brookings Institution Tax Policy Center.

Essentially, the Administration excuses the discrepancy by stating that CBO is using more recent numbers. Why the Administration cannot adopt those numbers–or at least, highlight the discrepancy in the name of intellectual honesty–is anyone’s guess. But the entire story serves as yet another blow against the “reality-based” moniker the Administration and its supporters like to claim for themselves. One cannot claim any grounding in facts while at the same time embracing a budget and a set of economic forecasts that appear to have been written by aspiring fiction writers.

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