CBO Admits: We Can't Tell if the Stimulus Failed

Posted: Mar 18, 2010 7:35 AM
The CBO issued a report last month claiming that the massive Obama stimulus boondoggle "created or saved" millions of jobs. This report was much-ballyhooed in Left-wing circles as proof that this massive Keynesian injection into the American economy was working great.

It turns out that's not exactly the case. The CBO released said report, but recently director Doug Elmendorf admitted that his models pre-assume the conclusion. At a question-and-answer forum, he was asked directly if the CBO's models would be able to tell if the stimulus failed. Backed into a corner, Director Elmendorf answered simply: "no."

This is a stunning admission from one of the premier budget analysts in the country. The CBO's model pre-assumes that the stimulus works. They then run the model and declare that the stimulus is working. These results are worthless.

There are other, private and independent analyses of the stimulus that may be worth something. But the CBO's is no longer one of them.

Hat tip: Dan Mitchell