Look what's burning up Memeorandum right now, huh? A Washington Times article written to claim that the CBO has reached what would frankly be a fairly damaging conclusion.
But it's wrong. Front-page headline, completely inaccurate. We have a case of basic math illiteracy or deliberate lying.
Follow me here. From the text:
President Obama's economic recovery package will actually hurt the economy more in the long run than if he were to do nothing, the nonpartisan Congressional Budget Office said Wednesday.
No, they fucking did not. CBO, the official scorekeepers for legislation, said the House and Senate bills will help in the short term but result in so much government debt that within a few years they would crowd out private investment, actually leading to a lower Gross Domestic Product over the next 10 years than if the government had done nothing.
Again, CBO did NOT say this. CBO estimates that by 2019 the Senate legislation would reduce GDP by 0.1 percent to 0.3 percent on net.
Now this is just about a quote. Hmm, sounds like it validated the first two paragraphs, huh? But wait, what "net" was the CBO talking about? Go to their blog/
Oh, look! It's a larger sentence!
Including the effects of both crowding out of private investment (which would reduce output in the long run) and possibly productive government investment (which could increase output), CBO estimates that by 2019 the Senate legislation would reduce GDP by 0.1 percent to 0.3 percent on net.
Aaaaah! So on "net" meaning, including both the LONG-TERM positive and LONG-TERM negative effects, CBO sees a minus 0.1 - 0.3.
But wait? What's further up on the CBO blog - and in the Washington Times' own article??
The agency projected the Senate bill would produce between 1.4 percent and 4.1 percent higher growth in 2009 than if there was no action. For 2010, the plan would boost growth by 1.2 percent to 3.6 percent.
Here comes some fun fun fun math!!
SHORT-TERM EFFECT: 2.6 to 7.7 GDP UP!!!
LONG-TERM EFFECT: 0.1 to 0.3 GDP DOWN!!
So, what's the COMBINED TOTAL EFFECT over both the long and short term (in other words, "through 2019")???
Okay. Add the big number and subtract the little number. The worst case number is a net effect of 2.5 percent GDP increase.
You only get a net negative from now through 2019 if you count only the CBO's downside effect prediction and not their upside effect prediction.
Hey, the CBO's own blog gives you a hint...
Short-run stimulative policies can affect long-run output by influencing those three factors, although such effects would generally be smaller than the short-run impact of those policies on demand.
So the washington times printed this, the right wing blogs are all over it - see hot air and the corner for starters - who's next? The Pushback needs to begin now, or it will be all over cable.
PS: I'm the guy who emailed Allahpundit. He actually corrected. I'm impressed.
UPDATE: This came out in comments:
Furthermore - wish I'd thought of this earlier - the spread on the short-run positive effect is 3.8% - 8.9%. That's a variance of 5.1% uncertainty.
There's no way, no way at all, they could have an overall negative prediction with only a 0.2% spread if it was taking into account a range of positive predictions with a 5.1% spread. It makes no sense.
In order to get a net negative 0.3 with a a 3.8 positive 2009-11 estimate, you'd need a 2012-19 of negative 4.1 percent. But in order to get a net negative 0.3 with their max estimate 2009-11 of 8.9% positive, you'd need a 2012-19 of negative 9.2 percent.
But if you get the high end of the negative effect (-9.2) and the low end of the positive (3.8), you get a much larger negative impact than in the CBO's max negative number. Now, there might be some correlation between the two sizes, It seems pretty unlikely that you'd that a combined total output with such a small variance, given an intermediate step with such large variance. It just doesn't add up.