It was funny and sad to hear a cable television "talking head" become concerned over what she (or her news writers) thought was a conflict. The Congressional Budget Office (CBO) at a recent Congressional hearing forecast a grim economic outlook. She wish to compare that to a speech by the President that painted an improving picture for the economy. Ladies and gentlemen, the president was speaking about what has occurred. The CBO was talking about what might occur.
A forecast is a guess. History is...well, history. John Kenneth Galbraith, the Harvard economic professor and prolific author said, The only function of economic forecasting is to make astrology look respectable. Then there is one of my favorite passages from The Letter of James in the New Testament. The passage is 4: 13-15. Look it up. We cannot know what our life will be like tomorrow because we cannot know the future. We can and should plan for the future and forecasts can help in that process. But understand that making a plan and changing our behaviors to carry out a plan will likely thwart the forecast.
The economy is improving, but at a slow pace. Its not growing fast enough to get us out of the mess we are in. Another way to say it is that the economy has improved from bad to not quite as bad. If we look at it that way, the CBO's forecast is similar to the recent past. Hopefully, the CBO will alter the behavior of Congress and changes can be made that will thwart that forecast and truly improve the future economy. One guarantee is that things will change. Keep calm and carry on.
Go Forth and Do Good
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