{"id":30226,"date":"2015-02-17T02:00:57","date_gmt":"2015-02-17T07:00:57","guid":{"rendered":"http:\/\/quotulatiousness.ca\/blog\/?p=30226"},"modified":"2015-02-14T11:25:25","modified_gmt":"2015-02-14T16:25:25","slug":"in-praise-of-dynamic-scoring","status":"publish","type":"post","link":"https:\/\/quotulatiousness.ca\/blog\/2015\/02\/17\/in-praise-of-dynamic-scoring\/","title":{"rendered":"In praise of “dynamic scoring”"},"content":{"rendered":"

Dan Mitchell<\/a> explains why there’s a need to change the way the Congressional Budget Office (CBO) and Joint Committee on Taxation (JCT) “keep score” on how proposed legislative changes will impact the US economy:<\/p>\n

\"cartoon-cbo\"<\/a>The CBO, for instance, puts together economic analysis and baseline forecasts of revenue and spending, while also estimating what will happen if there are changes to spending programs. Seems like a straightforward task, but what if the bureaucrats assume that government spending \u201cstimulates\u201d the economy<\/a> and they fail to measure the harmful impact of diverting resources from the productive sector of the economy to Washington?<\/a><\/p>\n

The JCT, by contrast, prepares estimates of what will happen to revenue if politicians make various changes in tax policy. Sounds like a simple task, but what if the bureaucrats make the ridiculous assumption<\/a> that tax policy has no measurable impact on jobs, growth, or competitiveness, which leads to the preposterous conclusion<\/a> that you maximize revenue with 100 percent tax rates?<\/p>\n

Writing for Investor\u2019s Business Daily<\/em>, former Treasury Department officials Ernie Christian and Gary Robbins explain<\/a> why the controversy over these topics \u2013 sometimes referred to as \u201cstatic scoring\u201d vs \u201cdynamic scoring\u201d \u2013 is so important.<\/p>\n