Not only does the Trump administration's budget proposal rely on economic growth assumptions that are wildly more optimistic than those produced by any private sector forecaster, but it turns out that embedded within those assumptions is a completely ridiculous accounting error.
Here's how it works. The budget is counting on economic growth — and a lot of it — to overcome what otherwise would be a projected $1.3 trillion deficit in 2027 and instead achieve balance. A big part of that growth comes from a deficit-neutral tax proposal whose details aren't spelled out in the budget document.
That's a bit odd, because the administration has already sketched out the broad contours of its tax policy. That proposal would, on a conventional account, lead to a massive increase in the deficit. The administration says that's okay, though, because the extra growth unleashed by the tax cuts will offset the loss in revenue.
See the problem? Trump is not only counting on supply-side magic growth to make his numbers work, he's using the same magic bean twice. First the tax cuts provide enough extra growth to make the tax reform deficit-neutral. Then the deficit-neutral tax reform provides enough extra growth to make the overall budget balanced. It's ridiculous. Larry Summers, the former Treasury secretary and National Economic Council director, calls it "a logical error of the kind that would justify failing a student in an introductory economics course."
More to the point, it's a sign that the Trump White House simply isn't set up to govern the country at all. It's normal for Congress to reject large aspects of a president's budget proposal, but normally you would expect a same-party Congress to at least seriously consider what the president is requesting. But Trump isn't even remotely in the neighborhood of a blueprint that Congress could use if they were so inclined. He's taken the vast technical and analytical resources of the executive branch and effectively thrown them all in the trash can.