On Monday, New York Times columnist Paul Krugman opened up his intellectual pop-gun on President Trump’s plans to base budget projections on higher numbers. Over the weekend, The Wall Street Journal reported:
The Trump administration has drafted preliminary economic growth forecasts in its federal budget planning that rely on assumptions that are far rosier than projections made by independent agencies and most private forecasters, according to several people familiar with the discussions…. Discussions for the Trump administration unfolded differently, 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.
Now, this isn’t good. You don’t actually want the Trump administration to pencil in the sort of growth they’d like to see, then fill in the process later – that’s wishcasting. But what’s hilarious is Krugman’s conclusion:
I guess this was only to be expected from a man who keeps insisting that crime, which is actually near record lows, is at a record high, that millions of illegal ballots were responsible for his popular vote loss, and so on: In Trumpworld, numbers are what you want them to be, and anything else is fake news.
Now, let’s take a look at other administrations’ estimates for economic growth:
The White House forecasts have consistently overestimated growth for more than a decade, since the end of the Clinton administration. Not just by a little – by a lot. Which means that you can’t trust government “experts” to estimate growth in order to justify government expenditures. This has been a problem across the country, with various states embracing artificially high growth projections in order to justify massive government expenditures, particularly with regard to public pensions.
And yet Krugman is an advocate of increased government spending, not austerity. He thinks that overblown growth estimates should be a reason not to trust Trump – but they’re truly a reason not to trust the government not to blow out the deficit, no matter who is in charge. If we truly can’t trust the government, we can’t trust the government.
So thanks, Paul Krugman, for shedding a light on all of this. Let’s not take government estimates at face value – and let’s cut spending to deal with it.