Administration's forecast paints rosy economic picture

The Clinton Administration released its "Economic Report of the President" last month, and it can be said that the forecast is optimistic. The report bases much of its outlook on the President's deficit reduction initiative, which does not actually reduce the federal deficit, but instead reduces the deficit as a percentage of gross domestic product (GDP), through the remainder of the 1990s. The report also assumes that foreign economies will improve, interest rates will remain low, and housing, durable goods, and automobiles will also do well and "underpin a steady economic expansion." With improvement in these areas, the report predicts annual growth in GDP of 2.5 to 3% through the remainder of the 1990s. This rate of growth should be sufficient, the Administration believes, to reduce the unemployment rate from 6.5% in late 1993 to about 5.5% by the end of 1998. And, the report says, these gains will be accompanied by healthy increases in ...