Assumptions Equal Problems

The Best of Times
Dashed Surplus
Growth Is the Cure
The Great Reset
Charlotte, Fort Lauderdale, Chicago, and Raleigh

The future is tantalizing because it is both unknown and unknowable. At best, we can make educated guesses about tomorrow or next year. Sometimes, it’s actually hard to understand what happened in the past, much less to chart how the future might unfold.

The problem is that some guesses are more educated than others, and even the best are often not good enough. This fact of life matters because we use those guesses to make important decisions about, for instance, government tax and spending policies. Mistakes can have terrible consequences.

These are subjects on which it is hard for any of us to be truly neutral. Most people want to lower their own taxes and simultaneously see more spending on whichever services they think government should deliver. The politicians we elect know this, so they try to give us what we want. The charade never ends well, but we and they keep at it.

Today we will look back at what economists thought the federal budget and tax policy would be in 2001 and thereafter. Let’s just say the government projections were a tad optimistic.

Photo: Getty Images