Chris Edwards of the Cato Institute took a little trip back in time to check the accuracy of government’s budget forecasts… they get an F minus. As Walter Williams points out here, this is not new for the federal government, but this is a particularly bad case. In 2001, the Bush Administration forecasted that by 2011, the federal government would have a $2.71 trillion dollar budget. According to Obama’s 2011 budget estimate, it will be $3.83 trillion dollars! The following chart shows the real budget vs. the forecast.
As Chris Edwards explains:
“It reveals that Bush and his team started blowing their budget almost immediately. They kept spending more and more — wars, a giant new homeland-security bureaucracy, a big-government response to Katrina, the prescription-drug bill, doubling K-12 education spending, big pay raises for federal workers, financial bailouts, and so on. I can’t think of a single crisis that occurred on President Bush’s watch that the Bush-Rove team didn’t have an interventionist and big-spending response to.”
And Obama has simply been “Bush on steroids.” If nothing else it shows pretty convincingly that government forecasting is all but useless. But the more important thing to ponder is what Edwards finishes the article saying:
“It scares the hell out of me that federal spending down the road could be 41 percent higher than even the huge increases projected by Obama. But that seems to be where we are headed unless we put in place laws or constitutional amendments to really clamp down on the spend-happy politicians of both parties.”
Swift Economics 