Obama Still Disconnected From Budget Reality

Its been understood for some time now that the Obama admin has been pushing make believe budgetary numbers as a means to paper over their massive policy costs. The delayed budget released confirmed this as well, now its clear Obama is still pushing a make believe budget:

The cumulative $9 trillion deficit projected for the next decade is almost $2 trillion more than the estimate made only three months ago. Presumably this one is a more honest forecast, but even without smoking anything, one is blown away by the notion of a $9 trillion addition to debt by 2019. In 2019, debt held by the public will be 76% of GDP, compared to 56% of GDP in 2009.

Even more disturbing, this enormous increase in federal debt is the outcome of assumptions that themselves seem to suggest an overdose of feel-good substances. To be sure, White House budgets, whoever was president, have been laced with optimism. (No president has forecast a recession.)

Consider this week's projections of growth of gross domestic product in real terms, exclusive of inflation. The White House projects that GDP will grow by 3.8% in 2011 and climb above 4% a year for the next three years, followed by two years above 3%. This is far higher than historical norms-the economy has not seen such a period of growth since the 1960s.

This is self-serving optimism. By assuming higher economic growth, the forecasters can show more tax revenue and lower estimates of future deficits.Excessive Obama optimism is not limited to economic growth. Despite the enormous monetary stimulus pumped out by the Federal Reserve in 2008-2009, bank credit that is widely regarded as potentially inflationary, the administration assumes that inflation will actually decline from 2.1% in 2008 to 1.5% in 2009 and then to 1.3% in 2010 and 2011, and not rise above 1.8% through 2019.

Understand something. Obama is using rosy numbers and we still have a colossal debt.