Obama Budget Relies on Rosy Growth Estimates

By John Johnson,  Newser Staff
Posted Feb 26, 2009 5:38 PM CST
Obama Budget Relies on Rosy Growth Estimates
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)

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.” (More President Obama stories.)

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