Don't look back: Report says unemployment not to exceed 8.5%

According to the Department of Labor, unemployment has reached approximately 8.5% as of March. I think some kudos are in order, because this rate was predicted correctly by a report from the office of then President-elect Obama. You can read this work in its entirety here. This is the paper that spawned the statistic of 3 million jobs created. You may have heard that figure one, maybe two bajillion times. If you scroll down a bit, you get to this graph:

Sure enough, you see that light blue line there? It predicts this level of unemployment, sure enough. If only we had passed that stimulus package...Well, yes, it says we wouldn't reach this rate until early 2010, but still! You have you agree that...What's that? We did pass the stimulus package?!

I got this piece from Stu's Blog. He points out the following:

"1) By their own estimation, the stimulus isn’t working as planned: The administration’s own estimates said that if the stimulus would pass, the unemployment rate would never rise above 8%. Its peak would be around 7.9% around the end of the year. Well…It’s at 8.5% already, and most economists seem to it’s getting worse before it gets better.

2) By their own estimation, the stimulus might be making things worse: The administration’s report showed that the unemployment rate would be about 8.1% right now if we had done NOTHING. So, it’s either that the stimulus plan is actually making things worse, or the economy is significantly worse than they thought. Which brings me to #3 …

3) What does this do to their estimates?: If their economic prognosis was this far off, this soon, what does this do to their deficit estimates 6 or 8 years out? They already were very ugly, but doesn’t this make them far worse?"

Stu's points are valid. The paper also goes out of its way to point out how uncertain it is, due to the volatile nature of its subject. They never really publicized that part, did they?

I have one more observation that I think is possibly more important than the other three: The two lines (with and without stimulus) merge again in 2014. That means they admit, by their own numbers, that the economy will in fact recover all on its own without one ounce of government help.

They claim that it will take longer, and it will be more severe. I argue that those points may be true, but that recessions are to the economy what controlled burns are to a forest. Imagine if, during a controlled burn, the local FD (AKA The government) panicked and kept putting it out because it was killing plants and damaging trees. The choking undergrowth (AKA failing businesses) would never be cleared away. Eventually, you wouldn't be able to put out the fire anymore. That's when you'd have a blazing inferno (AKA Bad News Bears).