Friday, February 17, 2017

Report: Trump Transition Ordered Government Economists to Cook Up Rosy Growth Forecasts

The Trump-street hustle is on. File under: Not surprised.

Matthew Yglesias writes:
As the White House staff tries to put together a budget for President Donald Trump, they face a fundamental problem. Trump has promised to cut taxes, increase spending on the military and infrastructure, and avoid cuts to Social Security and Medicare. The only way to do that without producing an exploding budget deficit is to assume a big increase in economic growth.

And Nick Timiraos at the Wall Street Journal reports that Trump is planning to do just that — by making things up.

Deep into his story about Trump budget hijinks, Timiraos reveals that “what’s unusual about the administration’s forecasts isn’t just their relative optimism but also the process by which they were derived.” Specifically, what’s unusual about them is that they weren’t derived by any process at all. Instead of letting economists build a forecast, Trump’s budget was put together with “transition officials telling the CEA staff the growth targets that their budget would produce and asking them to backfill other estimates off those figures.”

Staff has been ordered to project that inflation-adjusted growth will average between 3 and 3.5 percent over the next decade, eventually settling at around 3.2 percent.

That’s drastically higher than the estimates provided by the Congressional Budget Office and the Federal Reserve, both of which see the economy growing at a bit less than 2 percent.


  1. Statistics... the damned lies that they are. I wonder if a regime has ever not asked the bean-counters to cook the books? Anyone remember when housing prices were going up and the Clintonistas changed the process to show rental rates instead?

    There are any number of GDP deflators to keep the CPI and PPI in line, too, based on a "formula". Hedonics, geographic weighting, and intervention analysis come to mind as just a few of the myriad of ways the numbers are massaged.

    I guess for the uninitiated this sort of news comes as a bit more of a surprise.

  2. Ah, Stockman's old girlfriend, Rosy Scenario. I used to date her, her sister Rosy Palm, and the three other sisters, but my girlfriend broke us up.

  3. I'm pretty sure most, if not all, past presidents have done this. I'm not sure it's much different if you hand the "economists" the numbers you want up front, or you just keep sending it back for them to "rework the numbers". In the end, it winds up being the same and the former approach is at least more efficient.

    One of the many reasons you should never trust government numbers on anything.

  4. Remember the "Obama care will lower healthcare costs" line?