President Trump’s first proposed budget was released today, to howls of outrage from the left. The New York Times issued an email breaking news alert:
The Times’s claim that Trump’s budget assumes “improbable economic growth” was mild compared to the reaction from most of the liberal commentariat. Slate, for example, initially headlined “The Trump budget forecasts 3 percent growth for 10 years, is insane,” but then backed off to “Trump’s Growth Forecasts Are the Budgetary Equivalent of Putting Your Fingers in Your Ears and Yelling, ‘Na Na Na Na Na.’”
Yes, Trump’s budget projects 3% annual GDP growth. That used to be considered the norm, with 4%, on average, the target. Now liberals think such budget assumptions are “insane,” or, more mildly, “improbable.”
At times like this, I like to ask: What did Barack Obama do?
Heh. As it happens, I have already written about this. In March 2015, I compared Obama’s budget projections to what actually happened:
Is 2.2% an acceptable rate of economic growth? No, but don’t take my word for it. By the Obama administration’s own standards, it has been a failure.
President Obama submitted his proposed budget for FY 2011 in February 2010. Its tone was triumphalist. Obama had the good fortune to take office in the wake of a financial collapse and a recession, and his budget predicted robust economic growth in the years to come. Table S-1 set out, among other things, the administration’s projections of GDP in future years. Here they are, in billions of dollars, along with my calculation of the projected growth rate:
2013 17,182 = 6%
2014 18,139 = 5.6%
2015 19,190 = 5.8%
2016 20,163 = 5%
The federal fiscal year runs from October to October, so it is not exactly coextensive with the calendar year, but that discrepancy is immaterial for this purpose. As you can see, the Obama administration expected its policies to produce GDP growth of 5% to 6% in 2014, far more than the 2.2% actually experienced, as well as the 3.1% attained in 2013.
As time went by, Obama’s economists realized that the administration’s policies were not producing the growth they had expected. Thus, in February 2012, when the administration released its proposed budget for FY 2013, its projections were revised as follows:
FY 2012 15,602
FY 2013 16,335 = 4.7%
FY 2014 17,156 = 5%
FY 2015 18,178 = 6%
FY 2016 19,261 = 6%
Note that the projection for FY 2013 was revised downward by $847 billion. Still, prosperity was just around the corner, as the administration still expected growth in 2014 to be 5% to 6%, with robust growth thereafter.
Two years later, the numbers had changed again. When the president’s FY 2015 budget was released in March 2014, these were the predicted GDP numbers:
FY 2013 16,619
FY 2014 17,332 = 4.3%
FY 2015 18,219 = 5.1%
FY 2016 19,181 = 5.3%
FY 2017 20,199 = 5.3%
But even then, just one year ago, the Obama administration predicted that economic growth in 2014 would be 4.3% or greater–twice the actual number. The administration’s current projection for FY 2015 is nearly $1 trillion lower than what it expected in 2010. That is around $3,000 per person.
So don’t take my word for it: the Obama administration is an economic failure, judged by its own criteria. Its policies have achieved only a fraction of the economic growth that the administration confidently predicted when it took office.
Through the whole Obama administration, there was never a prediction of GDP growth as low as 3%–the level that liberals now deem “improbable” if not “insane.” In 2011, did the New York Times write that Obama’s budget projection of 6% GDP growth–exactly twice the prediction embodied in Trump’s proposed budget–was improbable? Just kidding.
With reasonable government policies, 3% growth is eminently obtainable. It is nowhere near what the Reagan administration achieved. Which is why the Democrats are determined to drive Trump out of office before his pro-growth policies (on repatriation, for example) can be implemented. A pro-growth administration would expose the Obama years for the economic fiasco that they were.