Heritage: Our Wildly Optimistic Budget Analysis May Be a Tad Off

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After widespread criticism that its analysis of Paul Ryan’s budget was optimistic to the point of absurdity, an author of the Heritage Foundation is admitting to reporters that his numbers may have been a tad off. But he firmly lays the blame at the feet of the CBO, the independent analyst tasked with evaluating the impact of congressional legislation on the budget, for any of his errors.

The most glaring number was Heritage’s unemployment projection, which they saw dropping to 6.4% in 2012 and an unprecedented 2.8% in 2021. In an interview with Slate‘s Dave Weigel, the director of the Heritage Foundation’s Center for Data Analysis, William Beach, admitted his study’s figures might strain belief.

“Am I comfortable with a 2.8 unemployment rate?” asked Beach. “It’s pretty low. The model’s predicting a low unemployment rate — that’s how to take it. The thing is that the model stops in 2022. If it had continued into 2022-2031, then the unemployment rate would start to rise again.”According to Beach, the number still accurately reflected the results of the model Heritage used, which he said came from analyst IHS Global Insight. But the chief economist of IHS Global Insight has raised his own concerns about the results, saying that he’s unsure what could produce such a low unemployment rate.

Beach added in a separate interview with FrumForum that the real problem with their numbers is that the massive employment gains Heritage projects from Ryan’s plan are being measured against the CBO’s projections.

“I think the CBO has given us a scenario that is pretty rosy, how can you have unemployment rates of 5.2% in a world where we have a financial crisis?” Beach said.

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