Government Just “Making Up” Projections

Stephen Moore wrote in yesterday’s Political Diary:

California Rep. Darrel Issa calls the Obama [administration’s] economic forecasts a “convenient vehicle for avoiding accountability.”

Mr. Issa went over the numbers with me the other day. The stimulus plan was supposed to save 150,000 jobs in the first 100 days, but instead 2.3 million Americans have lost jobs since Mr. Obama occupied the White House. Mr. Issa tells me he believes the administration simply is “making up” such projections. “There is no methodology behind their estimate for creating 600,000 jobs this summer. This is supposed to be the new age of accountability and transparency.”

In a letter to the White House last week, Mr. Issa lays out his complaints in detail. “How can the American people understand what is being accomplished with their money if you do not even attempt to provide information about the employment effects of each stimulus project?” Mr. Issa thinks the administration is guilty of single-entry bookkeeping. It counts jobs created from government spending, but none of the jobs lost from the money taken out of the private economy. What about the negative multiplier effect from the higher interest rates we’ve seen in the last several weeks?

Meanwhile, the U.S. House Republican Caucus is circulating a chart showing that the unemployment rate of 9.4% is higher than what was projected for May before the stimulus bill passed. “Mr. Obama warned that without the economic stimulus we would have a 9% unemployment rate,” says House Republican Caucus chairman Mike Pence. “We got the stimulus and we now have an unemployment rate above 9 percent.”

Welcome to the new math.

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