CBO Appears Immune to Embarrassment
The Congressional Budget Office (CBO) just released its latest concocted quarterly estimate on President Obama’s failed stimulus. CBO’s findings are as preposterous as its 11 previous studies of the stimulus, discussed here, here, and here.
The story doesn’t change, because CBO’s faulty analysis doesn’t change. Each time CBO does an estimate, it is begging the question, because it is using the same models to evaluate the stimulus’s effectiveness as it did to predict how the stimulus would impact the economy before Congress passed it.
These models assume that deficit spending is stimulative, so when CBO runs the models they find—you guessed it—that deficit spending is stimulative. All CBO has really shown is that they’ve run their models correctly.
As we’ve written before, CBO’s method is akin to asserting that if you spun around in place 1,000 times really, really fast in the opposite direction to the earth’s rotation, the earth would actually reverse its spin. So you try it. You spin around 1,000 times. Then, having seen your performance, I announce emphatically that the earth is now in fact spinning in the opposite direction as it was. (Please ignore the fact that the sun continues to traverse the skies exactly as it has for billions of years.)