- Joined
- Oct 18, 2005
- Messages
- 15,274
- Reaction score
- 2
https://www.washingtonpost.com/opin...a3817ac21a5_story.html?utm_term=.ad377bab077b
Astonishingly, the White House still hasn’t released details for any of the major economic initiatives Trump promised during the campaign (a “terrific” Obamacare replacement, a top-to-bottom tax overhaul, massive infrastructure investment). But thanks to recent leaks about the administration’s economic book-cooking, we at least know that whatever Trump ultimately proposes will be very, very expensive.
After the election, the Trump transition team began the long, arduous process of putting together the presidential budget. As is always the case, it worked with the (non-political) career staffers at the Council of Economic Advisers.
Normally this process starts by asking the CEA staff to estimate baseline economic growth under current policies. These professionals then build on this baseline to forecast how the president’s proposals will affect the overall economy, as well as budget deficits.
The end results are often more optimistic than what independent forecasters predict — the White House is factoring in new policies it believes are pro-growth, after all — but not wildly so. The numbers still need to be credible.
Like I said, that’s how things normally work. Not this time around.
As the Wall Street Journal first reported (and as I’ve independently confirmed through my own sources), the Trump transition team instead ordered CEA staffers to predict sustained economic growth of 3 to 3.5 percent. The staffers were then directed to backfill all the other numbers in their models to produce these growth rates.
...
Inflation-adjusted economic growth over the past decade has been under 2 percent. And independent projections for the coming decade are equally lackluster, thanks in part to population aging. The Federal Reserve, the nonpartisan Congressional Budget Office and private forecasters predict about 1.8 to 1.9 percent annual growth.
In other words, based on nothing but expediency, the Trump team prophesies growth that’s more than a full percentage point higher than almost anyone else expects.
Even conservative economists who believe that a tax-cutting, deregulatory agenda will unleash pent-up growth must find Trump’s forecasts-by-fiat hard to swallow.
So the non-partisan CBO and private forecasters predict 1.9, but Trump Admin ORDERED the CEA to predict sustained economic growth of 3% to 3.5%. You ask why any of this matters?
Astonishingly, the White House still hasn’t released details for any of the major economic initiatives Trump promised during the campaign (a “terrific” Obamacare replacement, a top-to-bottom tax overhaul, massive infrastructure investment). But thanks to recent leaks about the administration’s economic book-cooking, we at least know that whatever Trump ultimately proposes will be very, very expensive.
After the election, the Trump transition team began the long, arduous process of putting together the presidential budget. As is always the case, it worked with the (non-political) career staffers at the Council of Economic Advisers.
Normally this process starts by asking the CEA staff to estimate baseline economic growth under current policies. These professionals then build on this baseline to forecast how the president’s proposals will affect the overall economy, as well as budget deficits.
The end results are often more optimistic than what independent forecasters predict — the White House is factoring in new policies it believes are pro-growth, after all — but not wildly so. The numbers still need to be credible.
Like I said, that’s how things normally work. Not this time around.
As the Wall Street Journal first reported (and as I’ve independently confirmed through my own sources), the Trump transition team instead ordered CEA staffers to predict sustained economic growth of 3 to 3.5 percent. The staffers were then directed to backfill all the other numbers in their models to produce these growth rates.
...
Inflation-adjusted economic growth over the past decade has been under 2 percent. And independent projections for the coming decade are equally lackluster, thanks in part to population aging. The Federal Reserve, the nonpartisan Congressional Budget Office and private forecasters predict about 1.8 to 1.9 percent annual growth.
In other words, based on nothing but expediency, the Trump team prophesies growth that’s more than a full percentage point higher than almost anyone else expects.
Even conservative economists who believe that a tax-cutting, deregulatory agenda will unleash pent-up growth must find Trump’s forecasts-by-fiat hard to swallow.
Supercharged growth implies higher tax revenue, as well as lower spending on means-tested programs such as Medicaid and unemployment insurance. As a result, astronomical economic growth is often used to paper over the astronomically large deficits that would result under more realistic assumptions.
So basically Trump Admin is cooking the books because his incoming budget is going to be very expensive and he's trying to hide it with his manipulation of the CEA numbers.