Projections have no bearing on effectiveness of legislation

In a recent post regarding the stimulus, a number of commenters referenced the Obama administration’s claim that the stimulus would keep unemployment under 8% as proof that the stimulus was a failure.

First it should be noted that President Obama never “promised” that unemployment would remain under 8%. That was a projection which turned out to be incorrect, but whether this prediction was correct or incorrect has no bearing on the overall effectiveness of the stimulus.

For example in 2000 President Bush predicted that the economy would see an additional 3.4 million jobs and a budget deficit of $14 billion dollars by 2003. These projections were partly based on the 2001 tax cuts championed by Bush. The actual tally was a loss of 1.7 million jobs and a $521 billion budget deficit.

Does that mean that the tax cuts failed simply because he failed to meet his projections? No. To determine the actual cause of the job losses and increase in budget deficit you would need a thorough analysis of all of the data, not some amateur examination of anecdotal evidence.

Not surprisingly both men took the same tact when addressing these failures, by blaming outside forces. Yet to many conservatives when these justifications came from George W. Bush they were rational examples of how projecting economic data is a tricky business, while when they come from Barack Obama they are just excuses for his failed policies.

The reality is projecting the future of the economy is an extraordinarily difficult endeavor and no policy should be  judged before it has a chance to be fully executed. Hindsight has given us plenty of time to review both of these policies and at no point in any study regarding the overall effectiveness of either piece of legislation are educated guesses preceding their implementation considered.