Greg Mankiw points out that while Barack Obama’s budget promises to increase the national debt by more than $9 trillion over the next ten years, even that figure relies on rosy growth projections that overstate tax revenues. I’ll refer you to Mankiw for the specific numbers. On the average however, Obama projects annual economic growth to be about a full percentage point better than the consensus of Blue Chip forecasts.
Private sector economists are already calling shenanigans:
The Obama administration’s outlook has private economists wondering: Has Rosy Scenario made a comeback?…
Nariman Behravesh, chief economist at IHS Global Insight, a major private forecasting firm, called the administration’s forecasts “way too optimistic” and said it could represent a return to the overly optimistic forecasts of previous administrations confronted by surging budget deficits.
“They used to joke during the Reagan years that the highest ranking woman in the administration was Rosy Scenario,” he said. “We may be seeing a return of Rosy Scenario.”
It’s hard to believe that Obama could be projecting a $9 trillion increase in the national debt — and at the same time be cooking the books to make the number look better. But that appears to be the case.
But let’s take the Democrats at their word; they promise annual growth rates of nearly 5 percent by 2012. If they fall short, can we hold the Democrats accountable?