The good professor has brought back an old chart that Obama’s econ team used to justify the stimulus package earlier this year and annotated it (in red) to illustrate how far the reality deviated from the projections.
From Greg Mankiw’s Blog:
When the Obama stimulus plan was proposed, the president’s economic team put out a report in January 2009 that purported to show what would happen with and without the fiscal stimulus. The chart above is from page four that report, together with the actual results over the past couple months. As you can see, the actual outcome is significantly worse than the projection with the stimulus plan and is, in fact, roughly on track with what was projected without the stimulus.
For the administration to have made these types of predictions was foolish to begin with. The macro is just way too shifty for this type of forecasting to be taken seriously, especially coming out of the White House.