Report: Trump transition ordered government economists to cook up rosy growth forecasts

[Sgent]

Source: Vox

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.



Read more: http://www.vox.com/2017/2/17/14651208/trump-budget-forecast

[Sgent]

1. Ok... best quote ever

That’s in part because most presidents lack Trump’s shamelessness. Another part is that most presidents would worry that if you order CEA staff to make up fake numbers, they will leak that to the Wall Street Journal.

[jetcat]

5. More illegal leaks -- leaks everywhere. Ship is filling fast! Sad!

But then, if the captain is drunk and stomping around the boat with a sawzall, leaks are kind of inevitable.

[pat_k]

13. But they are all lies, Right? So can't be "leaks"...

What is it DT? Evil leakers talking about stuff that actually happened? Evil reporters making shit up?

Can't be both.

[Honeycombe8]

14. This happened in the Bush administration. The public doesn't care.

I saw hearing on tv of the CBO (? the agency that does the numbers for the budget). They were asking the head of it how the actual projection cost of the tax cuts ended up being so much more than was forecast. He testified that he sent the correct forecast to the (Republican) committee chairman, who called him and told him to lower the number. So the head guy re-did the forecast and re-sent it.

I believe the re-formulating the cost of the tax cuts involved assuming something about growth.....like this administration is asking. So it seems someone has told Trump how to get the numbers he wants, Republican-style.

The news didn't make a big deal of the fake tax cost projection, and the public didn't seem to care. That's way in the future, and too technical for people.

Even now, people don't believe when I and others say that the huge tax cuts were a primary contributor to the huge deficit that followed.

In August 2000, CTJ announced that 60 percent of the Bush campaign’s
proposed cut would go to the wealthiest 10 percent of taxpayers, and that 43 percent
would go to the wealthiest 1 percent, those making more than $319,000 per year. The
average annual tax cut for those taxpayers would be $46,000, compared with an average
of only $227 for the bottom 60 percent of taxpayers.
http://www.law.harvard.edu/faculty/hjackson/2001-2003TaxCuts_37.pdf

There's no reason to think that history won't repeat itself. Tax cuts to the wealthiest, that results in economic hardship for the masses, who are the ones to suffer in a recession. As Trump said, he likes recessions because he can buy stuff cheap (or something like that).

[brooklynite]

2. A friend of my mother's once worked directly for Trump...

If he didn't like the numbers you presented, he'd throw them in the trash in front of you and make you come up with new ones.

[pat_k]

15. DT Math

DT lives in a "reality" of DT's creation.

GM Building taller than Trump Tower? No problem. Just chop off the top of the GM building model.

“My building looks a little small,” he said, according to Norman Brosterman, the model maker’s assistant at the time. Assured the scale was accurate, Mr. Trump had an inspiration on his next visit to the architectural workshop.

“Can you make my building taller?” Mr. Trump asked. No, he was told. “Well, can you make the G.M. building shorter?”

Mr. Trump marked the G.M. building at his preferred height with a pencil. Mr. Brosterman sawed off the top third, leaving Trump Tower — in the one-thirty-second-scale model, at least — the tallest in the neighborhood.

“Trump said, ‘Great,’ and left,” Mr. Brosterman recalled recently.

The number of floors DT claims vs. actual:

Claimed/Actual
41/31 240 Riverside Blvd
52/44 Trump Int’l Hotel and Tower
68/58 Trump Tower
90/70 Trump World Tower

DT Math
https://www.nytimes.com/2016/11/02/nyregion/donald-trump-tower-heights.html?_r=0

[ck4829]

3. It's OK, it's just alternative growth forecasts.

[bucolic_frolic]

4. #FakeForecasts

with the media perceived as lying solves all problems for the Trump Administration

[procon]

6. Fake numbers? At some point the old fool will become irrelevant. nt

[progree]

11. That's pretty much what the article says....

normally presidents are trying, on some level, to work with Congress to get things done. Congress needs to use Congressional Budget Office numbers when legislating, so a fake White House forecast doesn’t help a president’s allies on the Hill.

And that the CBO forecast (as well as the Federal Reserve's forecast) is for a little less than 2% growth rate

[Sunlei]

7. So that's why trump is caught in endless audit with IRS. name a number & "back fill other estimates

"back fill other estimates off those figures.”

Mr. Trump you dumb ass, you won't be able to cheat on the public government records. You can't make government employees "back fill with lies", they have to use real numbers.

[keithbvadu2]

8. All humor is based on life.... sometimes way too accurately

All humor is based on life.... sometimes way too accurately

https://safr.kingfeatures.com/idn/ck3/content.php?file=aHR0cDovL3NhZnIua2luZ2ZlYXR1cmVzLmNvbS9CbG9uZGllLzIwMTcvMDIvQmxvbmRpZS4yMDE3MDIxM183NjAuZ2lm

[red dog 1]

9. The Trump administration is projecting that a higher rate of economic growth....

....won't lead to higher interest rates,
(according to the OP)
"because the US would become a more attractive place to park money."

If that's true, why are "foreign governments dumping US Treasuries as never before"?
(Wolf Richter's "Wolf Street.com" 2/9/2017)


K&R, thanks for posting

[Bernardo de La Paz]

10. It's not "rosy scenario", it's a 48 hour meth binge fantasy. . . . nt

[tenorly]

12. Another similarity with Nixon - and certainly not the last.

Nixon, we now know, made threats to statisticians at the BLS to keep inflation data at single digits once the annual CPI hit 10% (in 1974).

Karl Rove was also rumored to have interfered with CPI readings, but by way of patronage rather than intimidation. Anyone remember the constant "3%" inflation during Bush's disastrous second term?

[mdbl]

16. So our economy is entering fantasy land

Our Idiocracy marches on!!

[msanthrope]

17. Most women are familiar with the fake inflation numbers types like DT try to sell...nt