Over at TNR, Jonathan Chait is very happy with the president’s FY2011 budget. He writes:

Obama’s budget does not increase the long-term, or even the medium-term, budget deficit. It reduces it slightly. Most of the commentary castigating Obama for the deficit is an attempt to imply, usually without quite saying so, that Obama’s policies have caused the red ink.

The evidence, he says, is in this chart, which shows that the president’s budget reduces the projected deficit compared to previous estimates. (Andrew Sullivan is impressed with this chart, too.)

I like happy people, so I would like to say that it’s nice to see that a projection of slightly cut and then massively increased deficits is cause for celebration from Chait.

But still, I can’t help but being surprised. Yes, the president’s new budget data projects smaller deficits in the future. Yet, as anyone who has been in Washington long enough should know, budget requests are just that, a request. No matter who’s doing the request. To believe that this request will somehow turn into reality is rather naïve.

For instance, I would like to remind our readers of last year’s deficit projections. In February 2009, Obama projected that the deficit for FY2010 would be $1,171 billion (Table S-1). This year, we find out that the deficit for FY2010 will actually reach $1,556 billion (Table S-1). And spending, which was projected to go down in FY2010 to $3,552 billion from its $3,938 FY2009 level, will climb by an estimated 6 percent by the end of the fiscal year to $3,721 billion.

Here is one big clue that the same thing is likely to happen with these deficit projections. The president claims that in FY2011 the deficit will shrink from its FY2010 level of $1.56 trillion to $1.2 trillion.

2010 – 2011 Changes

2010 Estimate 2011 Estimate 2010 – 2011 Percent Change Revenues $ 2.17 Trillion $ 2.57 Trillion 18.57% Outlays $3.72 Trillion $ 3.83 Trillion 3.04% Deficits -$ 1.56 Trillion – $1.27 Trillion -18.57%

As we can see in this table, the president projects that all of the deficit reduction will come from revenue increase. There are many reasons why this is very unlikely. The easiest one to underline here however is that while I would like to share the president’s optimism, I think his GDP and unemployment numbers are too rosy to be true.

In FY2011, the president assumes that the economy will growth by 5.1 percent (see Table S-13 of the Summary Tables). He assumes that the economy will grow by 6 percent in 2012. Really? The same can be said about unemployment rate. Starting next year, the president’s efforts (the same that have, so far, failed miserably to reduce unemployment) will start working, we are told here. The unemployment rate will drop to 9.2 percent. Better yet, in 2012 it will drop to 8.2 percent and will reach 6.5 percent in FY2014.

Considering how unrealistic these projections alone are (I could add much more on his revenue from tax proposals and his spending projections), I wouldn’t count on a 18.5 percent increase in revenue this year. And I wouldn’t count on the president’s projected deficit reductions over the next ten years to materialize, either. And I would forget about this chart as evidence that fiscal responsability is back in town. It isn’t.