Arguments for dynamic scoring include:
1. Dynamic scoring provides valuable information omitted from conventional scores
2. Conventional estimates create a bias against pro-growth policies by disregarding economic effects
3. Policymakers should take advantage of better technology and informationArguments against dynamic scoring include:
1. Dynamic scoring is very sensitive to assumptions
2. Dynamic scoring requires making assumptions about future policy changes
3. Dynamic scoring could impose impractical additional workload with only marginal changes in outcomes
4. Dynamic scoring could undermine estimators’ credibility
I’ve been trying to help the Committee for a Responsible Federal Budget. I’ve spent some time with Erskine Bowles, and I have a lot of respect for Erskine Bowles, who is a Democrat. I’m also seeing some Republican senators and try to stay in touch with the Congress. So don’t misread my interest in this topic. If you ask me what’s the most fundamental issue for America’s economy and its place in the world, it’s getting this solved in a proper way. So if I can help, that’s what I’m trying to do. What I’ve found with some congressional or business groups is that what I can bring to bear is a little bit of a sense of how this affects America’s international position and a little bit of sense of what I see happening in the rest of the world. I’m not trying to endorse one form or another. I just think we need to push the system towards a solution.
Watch Al Simpson discuss the need for compromise and a comprehensive approach, as only Al can.
(Source: CNN)
The fighting over what level of income to extend tax cuts is trivial when it comes to the debt. Lawmakers need to be talking comprehensive tax reform.
Much Not to ‘Like’ – Facebook had its initial public offering (IPO) on Friday. The hype surrounding the offering illustrated the prominence of social networking in our economy and society. Yet, for all the lofty numbers involved, they pale in comparison to the federal budget. The IPO valuation of Facebook at around $100 billion was indeed eye-popping, but consider that the federal budget ran a deficit of nearly $200 billion in the month of March alone. Social networking may have made us more connected to each other than ever before, but we are just learning how the federal budget connects to us. How we address the national debt will affect the economy in the short run and longer term. Budget decisions will also affect key issues like national security, education, taxes and entitlements. Policymakers will have to make some tough decisions. We can’t afford to kick the can down the road any more. If you think getting behind in checking your Facebook updates is bad, think about the deficit hole we continue to dig.
Watch Erskine Bowles give a spirited talk on confronting the national debt at the American University commencement.
(Source: vimeo.com)
Erskine Bowles says last year the federal government only took in enough revenue to cover entitlements and interest on the debt. All the rest of the budget, including defense and education, was financed through borrowing.
(Source: cfr.org)
Of each dollar the federal government spends, how much goes to defense? How much goes to Social Security? How much goes to interest on the debt? And how has this sort of thing changed over time?
This graphic answers these questions. It shows the major components of federal spending 50 years ago, 25 years ago, and last year.
Read more here.
From the vault - Politico’s Patrick Gavin tackles the previous version of our budget simulator. Try our new version and see if you can do better than Patrick - http://crfb.org/stabilizethedebt/
(Source: politico.com)
A Galaxy Far, Far Away – Friday was Stars Wars Day, the annual observance of the popular movie series that plays on the date, as in May the Fourth (be with you). The franchise seems as strong as ever, having survived Jar Jar Binks and returning to the big screen again; this time in 3-D glory. The classic battle between good and evil portrayed in the films is timeless and offers many lessons for us today. Not only do the films illustrate how political dysfunction can destroy a great republic, they also portray how even the most entrenched and powerful forces can be overcome against all odds. With the national debt currently on course to reach unprecedented levels, getting back to a sustainable path may seem to be as far away as Tatooine, but if Ewoks can take out Storm Troopers, then putting in place a comprehensive fiscal plan is doable.
