Stan Collender bangs his head against the wall, and tries to immunize his readers against the viruses of mendacity he believes are contained in the administration's forthcoming midsession budget review:
Budget Battles (07/13/2004): At some point over the next few weeks, the Office of Management and Budget will release the administration's midsession budget review and try to convince everyone the federal deficit is falling. Don't believe them. OMB is likely to say its latest projection shows the fiscal 2004 deficit will be around $420 billion, about $100 billion less than the $521 billion the administration forecast when it released its budget in February. Administration officials will say this is an indication of how much better the budget outlook has gotten over the past few months and that the president's policies are working.
What they won't say is that the deficit situation is actually getting worse. A $420 billion deficit... record will replace the one set last year, when the deficit reached $375 billion. The administration also won't say that the "improvement" is due to what now must be taken as a consistent pattern of questionable projections and forecasts. Last year's midsession review projected a fiscal 2003 deficit of $455 billion. A mere 10 weeks later, when the actual number turned out to be $80 billion less, the White House claimed the lower number was because of the president's economic program and sound management. But the "improvement" was mostly due to the unrealistically high forecast included in the midsession review. There is almost nothing that can be done in the last quarter of a fiscal year to increase revenues or reduce spending by anything close to $80 billion. This forecasting was either politically motivated or just plain bad, and the characterization of it as an improvement was nothing more than spin.
If the widely expected $420 billion deficit figure turns out to be correct, then it will not be wrong if the White House claims the budget outlook has improved compared to what it previously forecast. But it will be wrong for the administration to say the deficit is falling when, in fact, it is rising. Not only would such a claim be disingenuous, it would continue to harm the White House's already damaged credibility on the budget and economy...
Here I think Collender goes to far. I don't believe there is any way that any disingenuous claim about the budget the Bush administration makes can harm Bush administration credibility. You cannot harm what doesn't exist.
Posted by DeLong at July 14, 2004 01:03 PM | TrackBack | | Other weblogs commenting on this postCrisco Johnny lies!
http://atrios.blogspot.com/2004_07_11_atrios_archive.html#108983502955694935
Here's a useful parable for what the Bush administration does:
A baseball team loses 90 games during a given season. Over the winter, they lose their ace pitcher and star outfielder to free agency. Sports pundits all project the team to lose 105 games. The team only loses 100 games, and their CEO comes out and says "This 100-loss season is proof that this club is improving!"
Now, it's a pretty safe bet that most sports writers would find such an assertion laughable. Why can't political reporters in the major dailies treat Bush statements with the same scrutiny?
Posted by: Brad Reed on July 14, 2004 01:26 PMYou are right you cant harm somthing if it dont exist. I wish they would give me a billion or about 5 million I would be alright.
Posted by: david on July 14, 2004 02:27 PMYou are right you cant harm somthing if it dont exist. I wish they would give me a billion or about 5 million I would be alright.
Posted by: david on July 14, 2004 02:29 PMThis estimate excludes the ca. $200b/yr of intragovernment borrowing that we will have to start paying back, with interest, in 10-20 years, right?
Posted by: Troy on July 14, 2004 02:35 PMThe soft bigotry of miserable expectations strikes again.
Posted by: Gryn on July 14, 2004 02:53 PMBush, speaking earlier this week:
This economy of ours is strong and it's growing stronger. Since last summer, our economy has been growing at its fastest rate in nearly 20 years. In less than a year's time, we've added 1.5 million new jobs. Here in Michigan you've added over 29,600 new jobs since February. (Applause.) You're unemployment rate -- your unemployment is 6.5 percent -- too high, but it has dropped by more than a full point since December, and it is moving in the right direction. (Applause.)
Across this country, the manufacturing sector is growing stronger. Homeownership rates are at an all-time high. Interest rates are low. Business investment is growing. Consumer confidence is at a two-year high. Personal incomes are on the rise. The tax relief we passed is working. (Applause.)
My opponents look at all this progress and somehow conclude that the sky is falling. But whether they're message is delivered with a frown or a smile, it's the same old pessimism. And to cheer us up, they propose higher taxes, more federal spending, and economic isolationism.
...We need to be smart about how we spend the money in Washington, D.C. We need fiscal discipline and fiscal sanity. It starts with understanding whose money we spend. We're not spending the government's money in Washington, D.C.; we're spending your money. And you deserve fiscally sound government. (Applause.)
Brad, what happened to the Congressional Budget
Office? Didn't they used to give periodic
reports that tended to lend reality to budget
projections? Have they been neutered?
As long as no one mentions the billions and billions for W's Great Iraqi adventure...
Posted by: MattB on July 14, 2004 04:53 PMI agree with Prof. DeLong. A deficit isn't improving just because it's worsening slower than previously projected. The deficit and growing national debt, along with the unfunded liabilities of Social Security and Medicare add up to major concerns.
I would apply the same principle to employment. Job creation isn't worsening just because it's improving more slowly than previously projected. Bush deserves blame for the worsening deficit, and he deserves some credit for the improving employment picture.
Posted by: David on July 14, 2004 06:17 PMDeShort is having PMS again?
Posted by: kufar on July 14, 2004 07:33 PMhttp://www.cbo.gov/showdoc.cfm?index=1944&sequence=0
Yep, cbo is still in the budget forecast business. However, cbo is required by law to project only what is actually in the law, not what is likely to happen. So if a $100 Billion tax break is set to expire, then cbo would add that to the revenue, even if it is almost certain that Congress will act to extend the tax break.
cbo is very good at projecting the costs of legislation and analysis is often requested by Congressmen. cbo baseline numbers are very good, but you have to modify the baseline to reflect what is likely to happen.
Posted by: bakho on July 14, 2004 08:27 PMIf you want to hear someone sink to the depths of mendicity, go over to CSPAN and listen to Mankiw in this morning's Washington Journal
http://www.c-span.org/videoarchives.asp?CatCodePairs=Series,WJE&ArchiveDays=30
It's enough to make you want to bang his head against the wall. Denial is not just a river in Egypt.
Posted by: Eli Rabett on July 14, 2004 08:51 PMhttp://pep.typepad.com/public_enquiry_project/2004/07/there_he_goes_a.html
Posted by: Adrian Spidle on July 15, 2004 06:54 AMThe Congress raised the statutory debt ceiling by $984 billion to nearly $7.4 trillion last summer. Hitting that figure triggers a congressional review. At the current rate we will reach 7.4 trillion in .............................................
October.
"it's the economy stupid"
Posted by: JackNYC on July 15, 2004 09:59 AMThanks for the Mankiw link, Eli. I hope some corporation pays Mankiw the big bucks when he is done. He tries very hard but is not very convincing.
Posted by: bakho on July 15, 2004 12:35 PMFrankly, we're so used to rising deficits that even slowing of deficit growth is good news.
The DEBT, of course, keeps going up. I actually hope we hit the limit where we're borrowing just to pay interest. At least then, we'd have to drop any pretense that fiscal conservatism matters even a smidgen anymore.
Posted by: Dragonchild on July 18, 2004 11:21 PM