Obama Budget Relies on Rosy Growth Estimates

By John Johnson,  Newser Staff
Posted Feb 26, 2009 5:38 PM CST
Copies of President Obama's budget for fiscal 2010 are picked up at the U.S. Government Printing Office in Washington, Thursday, Feb. 26, 2009.   (AP Photo/Pablo Martinez Monsivais)
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(Newser) – President Obama is more optimistic about the nation's economic prospects than most economists, Bloomberg reports. His budget plan forecasts a GDP contraction of 1.2% this year, followed by a 3.2% expansion in 2010. The median forecast of economists calls for a contraction of 2% this year and growth of 1.8% next year. If the economists are right, Obama's pledge to cut the nation's deficit—from a staggering $1.75 trillion in 2009 to $533 million by 2013—is in trouble.

The discrepancy in forecasts is easy to explain, says a former White House economist who advised candidate McCain. “You cannot put out a projection that says, ‘At the end of my first term, my economic policies haven’t worked,’” he said. Doing so is tantamount to forecasting "failure." As a result, “you get some really rapid growth rates late in the game.”