Wednesday, July 29, 2009

Piling on the CBO

The CBO has recently come under fire for its opinion that giving MedPac more authority would do nothing to contain Medicare costs.

I've long been annoyed at the CBO, however, as during the Stimulus Debate, the CBOs most current estimates, from mid-December, for unemployment were often cited, and are still cited, as a way to benchmark what economists thought would happen as the stimulus moves forward. As I posted back in February , however, those estimates, even then, were already a straight-up joke. Probably, from mid-January it was clear that those estimates were a joke. Here's the catch though: December's unemployment numbers weren't really that much of a surprise. Maybe .1% higher than one might have predicted mid-December... The CBO just did an obviously poor job with the forecast, and then made an even worse decision to let that forecast stand during the stimulus debate. With the Obama stimulus, the CBO told us, under the worst case scenario, unemployment would top out at 8.5% this December. As a matter of fact, it hit 8.5% in March!...

I wrote at the time that the CBOs rose-tinted forecasting would not help the Obama administration, since the stimulus would then be judged against an unrealistic baseline. And as a fact, the Republicans are fond of using the CBOs poor forecasting skills as a club to beat the President with...

And my criticism is in no way related to the fact that the CBO denied my internship application.

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