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  • Heritage Updates Budget Unemployment Estimate

    The following letter was sent from The Heritage Foundation Center for Data Analysis to House Budget Chairman Paul Ryan’s staff regarding our recent analysis of the Chairman’s budget proposal:

    In further response to the Chairman’s letter of February 28, 2011 requesting technical advice and assistance, we have given additional scrutiny to calculations concerning the unemployment rate under the Chairman’s proposed budget plan.  As a result of that examination, we are making an adjustment to one variable — the full-employment unemployment rate, which is one component of the equation for the overall unemployment rate.

    Enclosed is the revised set of estimates with the adjustment.  While the adjustment has an impact on the unemployment rate in the model, the overall results elsewhere in the model do not change significantly.

    Sincerely,

    William Beach
    Director
    Center for Data Analysis

    Posted in Economics [slideshow_deploy]

    10 Responses to Heritage Updates Budget Unemployment Estimate

    1. Pingback: Inconvenient Numbers? Change ‘em. | The Big Picture

    2. Leon Lundquist, Dura says:

      First off, Thank You Heritage Foundation for your support of Congressman Ryan. I am a gloomy gus, but his 2012 Budget was a breath of sunshine! Hope! Real Hope (not the 'bama stuff) is America can undo the 100 years of Socialist creep. Strange to be in a position to cheer common sense! Hip! Hip! Hooray! Wow! Common Sense is possible! Here it is! Where we have never seen it before!

      It is important to know that Ryan's Budget doesn't cause Unemployment to go up. You know the Demo-crats will say that! When it comes to Unemployment numbers I haven't trusted the figures for years. Statistical Analysis has a weakness, "What are you counting?" If you sent a figure down to nearly zero, a huge percentage increase is assured by the fact you hit bottom. 200 Percent of nearly nothing is a pathetic performance made to sound great! Crazy stuff "We only lost 200,000 jobs last month! Isn't that great! It is a Ten Percent Improvement over 220,000 we lost last month! Hooray!"

      Real analysis would have us look at the size of the at risk jobs, a dwindling pool as more Americans are shown the door! So as that pool gets smaller, if the job losses remained the same the Situation Would Actually Be Growing Much Worse! The Dummycrats say "It's working" but it isn't. Rule Number One: Statistics Lie!

    3. XOches, Dallas, TX says:

      Clearly your posting guidelines do not deter pure fantasy or juvenile name-calling, as evidenced by the post by Leon Lundquist. I should not be surprised – it is Heritage after all.

    4. Bobbie says:

      To get a more accurate outlook, America need only evaluate full time permanent employment. Opportunities. Careers. Employment we can provide our families with throughout time, not on a temporary basis and not affiliated with government! Job friendly! Job security!

    5. David, New York says:

      Can you please explain how an increase in the unemployment rate by a factor of 50%, from 2.8% to 4.2%, can leave overall results not "significantly" changed?

      It astounds me that a budget proposal that seeks to reduce the deficit, and has even more tax cuts for business and high-income individuals, is characterized as responsible, or an adult approach, by anybody. I suppose that is a indicator of the level of the policy conversation in Congress.

      Maybe this is all a Washington minuet of who has to say what first or something, but to those of us out here in the real world, the necessity for revenue increases — and no, tax cuts, won't produce them — is screamingly obvious.

    6. Pingback: the unserious serious man | ad cerebrum

    7. Scott Grindrod says:

      Are these the same economists who claimed in 2001 that the Bush tax cuts would create 1 million more jobs than the CBO baseline (ie doing nothing)? Because those forecasts turned out to be wrong by approximately 7 million jobs. The same thing goes for the GDP growth rate. The Heritage Foundation claimed that the 2001 tax cuts would cause a 0.3 increase in GDP from the CBO baseline. They were only off by 1.5% which is an error of about 60%. When they updated their projections in 2003 because their 2001 number were so far off, they claimed an average 0.75% increase from the CBO baseline when the real number turned out 0.75% BELOW the CBO baseline.

      All of this happened before the house market collapse, so that didn't affect the numbers. So why should we trust ANY estimate that come from this foundation? How many times do they have to be totally wrong before they are discredited as economists?

      Their whole theory still works off of Trickle Down economics (which is a failed theory by the way) that giving money to the rich will spur economic growth through investment. Guess what wealthy corporations and individuals do when you give them lots of tax breaks? They keep the money.

      The Fed Funds rate has been at nearly or actually zero for a while, hoping that cooperation will borrow money for expansions and create jobs. Instead, they took the "free" money and paid off existing debts, then continued to lay off workers while stockpiling large amount of cash.

      This economic policy has already failed multiple times, so why do people still believe the Heritage Foundation when they claim that more tax cuts will spur the economy this time as opposed to the last few times that it was tried.

    8. Pingback: Washington Abandons the Jobless | FrumForum

    9. Scott, Dallas says:

      Why stop with this one "update"?

      The entire Heritage analysis is a work of fiction and needs revision. At this point even "remotely plausible" would be a good starting point.

    10. Pingback: Heritage: The Only Way For Us To Be ‘Intellectually Honest’ Is To Opportunistically Flip-Flop | Celebs, News and Gossips

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