How can economists (actually a particular, now dominant, brand of economics called neoclassical) be so misguided? I am not sure, but propose that the shortcomings of neoclassical economics result from (1) academic specialization, (2) personal isolation from nature, and (3) political expediency. Professors in different departments rarely talk to each other anymore as each discipline has become more complex, so cross-disciplinary fertilization and reality checking may not happen.
It is incumbent on planners to give careful consideration to long term questions: What will these people use for heat? How will they cook their food? Are there adequate resources for diesel and gasoline fuels? If there are petroleum shortages, will they be able to use wood and coal for heat?