The document summarizes key points from Ed Dolan's economics blog about chronic overoptimism in US budget projections. It notes that budget projections routinely overestimated GDP growth and underestimated unemployment, contributing to growing budget deficits. As a result, tax cuts and unfunded spending increases were harder to justify and the national debt may be higher than if more cautious assumptions had been used. The President acknowledged the FY2012 budget does not do enough to restore fiscal health.

1. More Slides from Ed Dolan’s Econ Blog http://dolanecon.blogspot.com/ How Chronic Budget Optimism Helped Dig the Hole We are In Posted February 20, 2011 Terms of Use: These slides are made available under Creative Commons License Attribution—Share Alike 3.0 . You are free to use these slides as a resource for your economics classes together with whatever textbook you are using. If you like the slides, you may also want to take a look at my textbook, Introduction to Economics , from BVT Publishers.