Singing Pigs

January 22, 2009 by Dick.

Robert A. Heinlein wrote, “Never teach a pig to sing. It wastes your time, and annoys the pig.”

The Congressional Budget Office is the de facto standard by both tradition and enforcement to provide all Congressional economic data. It was created by the Congressional Budget and Impoundment Control Act of 1974.

It is interesting to note that CBO’s budget projection rules require their economists to assume that federal laws and policies governing both spending and taxation will not change.

Acting Director Robert A. Sunshine delivered a stunning forecast to Congress on January 8:

• A slow recovery in 2010, with real GDP growing by only 1.5 percent.
• An unemployment rate that will exceed 9 percent early in 2010.
• A continued decline in inflation, both because energy prices have been falling and because inflation excluding energy and food prices—the core rate—tends to ease during and immediately after a recession; for 2009, CBO anticipates that inflation, as measured by the consumer price index for all urban consumers (CPI-U), will be only 0.1 percent.
• A decrease of more than 1 percent in real consumption in 2009, followed by moderate growth in 2010; the rise in unemployment, the loss of wealth, and tight consumer credit will continue to restrain consumption—although lower commodity prices will ease those effects somewhat.

Most important, “CBO anticipates that the current recession, which started in December 2007, will last until the second half of 2009, making it the longest recession since World War II.”

That means the recession, on paper, will be over by Christmas if Congress DOES ABSOLUTELY NOTHING AT ALL.

I have come to realize that Barney Rubble knows this. After all, Congressman Frank himself acknowledges that he is the smartest man in Congress.

The reason to get the stimulus passed in a hurry is the same as the reason to push through the $700 billion TART overnight: if they held it up to the cold light of day, people would realize it was a scam.

Mr. Heinlein also wrote that the best government is the government that doesn’t try to govern.

Acting Director Robert A. Sunshine lost his job on January 22.

What a surprise.

Barack Obama said, “There is no disagreement that we need action by our government, a recovery plan that will help to jumpstart the economy.”

The Cato Institute, an inside-the-beltway think tank with strong libertarian leanings, disagreed. In fact, they found a few hundred economists to sign a full page newspaper ad the day after Mr. Sunshine testified.

Too bad no one reads newspapers any more.

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