Economists and the press already have voiced plenty of criticism about new predictions from the Office of Management and Budget (OMB). In its FY2013 Mid-Session Review, the agency forecast that the deficit will be $1.21 trillion and not the $1.33 trillion it estimated in February. The review forecast that gross domestic product (GDP) will rise 2.6% from the fourth quarter of last year to the fourth quarter of this one. And the agency predicted that unemployment will fall to 7.9% in the final quarter of this year.
Some experts went along with the 7.9% figure because it could be determined by the size of the work force as much as by the number of people who are unemployed. No one, other than Democrats, supported the 2.6% GDP growth rate forecast, because based on GDP growth so far this year, it appears to be impossible. But the revision is only one of hundreds of forecasts put out by government organizations and private research groups. The primary difference about the OMB data is that it makes the newspapers and tens of millions of people see it.
Most Americans have little idea what the difference between 1.9% and 2.6% GDP is. The president’s number does not matter to almost anyone who does not have a job or earns a wage insufficient to live on, or who lives below the poverty level and cannot buy enough food. And it does not matter to businesses that continue to worry about the tax rate for 2013 or their inability to borrow from banks that could easily lend money. GDP forecasts will not help the housing market or the ability of states and municipalities to balance their books and fulfill pension obligations.
The almost crazy numbers from the OMB will be forgotten in a few days. If they are remembered at all, it will be as a smoke screen to cover how well the economy will fare as the election gets closer. Republicans have just as much right and ability to say unemployment will rise or that the economy will crash into another recession.
Talk, and forecasts, are cheap, particularly when many Americans have little hope of an improvement in their financial situation at anytime in the future they can see.
Douglas A. McIntyre