Must-Read: Nick Timiraos: Trump Team’s Growth Forecasts Far Rosier Than Those of CBO, Private Economists

Must-Read: Note that in its rosy scenario Trump is not exceptional–for a Republican. Similar claims were made by Hassett, Hubbard, Mankiw, and Taylor on behalf of Mitt Romney back in 2012. Rosy scenario, and subsequently having to explain–in 1988, in 1992, in 2008, and 2020–why their projections back during the campaign and in the transition were such b.s.

And, yes, Hassett, Hubbard, Mankiw, and Taylor would have been making excuses last year had Romney won in 2012:

Nick Timiraos: Trump Team’s Growth Forecasts Far Rosier Than Those of CBO, Private Economists: “While there are often disparities between the White House and independent agencies on growth projections, they are rarely this large…

…The Trump administration has drafted preliminary economic growth forecasts in its federal budget planning that rely on assumptions that are far rosier than projections made by independent agencies and most private forecasters…. The forecasts, which were initiated before President Donald Trump took office, project gross domestic product—a broad measure of national output of goods and services—growing between 3% and 3.5% a year over the coming decade…. The economy has grown around 2% on average over the past decade…. The internal Trump projections are at odds with other assessments of the economy’s long-run growth prospects. The Congressional Budget Office… estimates… 1.9% annually between 2021 and 2027. The Federal Reserve forecasts growth of 1.8%….

“The president ran a campaign on proposals that would be incredibly pro-growth,” said Lindsay Walters, a White House spokeswoman. “There is a process in place where the administration develops an economic forecast based on its policies that are included in the president’s budget. That budget is still being finalized.”… The forecasts were prepared by Trump transition officials who met with officials at the Treasury Department and the CEA after the election, according to five people familiar with those discussions…

Compare:

R. Glenn Hubbard (Columbia University), N. Gregory Mankiw (Harvard University), John B. Taylor (Stanford University), and Kevin A. Hassett (AEI) (2012): The Romney Program for Economic Recovery, Growth, and Jobs “The Romney tax reform plan will increase GDP growth by between 0.5 percent and 1 percent per year over the next decade…

…We view these estimates as conservative as they fail to capture important, but hard-to-model, output gains from improved regulation, more certainty about the path of policy, and the aggressive agenda that Governor Romney has put forward with respect to energy, trade, education, human capital, and labor policy. Combined, and bolstered by sound monetary policy, we estimate that the Romney economic program will enable the private sector to create an additional 7 million net new jobs over the next decade beyond the improvement in employment from a more robust cyclical recovery in the short-term as a consequence of the Romney economic program….

From 2013 to 2022, under CBO’s current projection, potential GDP will grow about 2.5 percent per year on average…. Measuring from the first quarter of 2013 through the fourth quarter of 2022, the [Romney] average growth rate is expected to be approximately 4 percent per year with the upper long-term growth range, and about 3.5 percent with the lower long-term growth range…

Hassett, Hubbard, Mankiw, and Taylor were claiming 3.75%/year for Romney in 2012. At least the nameless transition forecasters are only claiming 3.25%/year for Trump today.

It’s what they do.