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View Diary: Republicans ask CBO to rig tax cut numbers (23 comments)

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  •  Dynamic scoring has a role (1+ / 0-)
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    nchristine

    It basically takes into account the indisputable fact that tax policy affects behavior and affects the economy as a whole.  

    And it is already used by some government entities (Treasury and the Congressional Joint Committee on Taxation, for example.)  

    A good discussion is here.  See also pdf here.  Of course, there are problems with dynamic scoring, as that second link indicates.  On the other hand, there are significant problems with using a static analysis as well. Depending on how it's done, it's not necessarily considered more accurate, especially over the long term.  

    There's an ongoing debate about whether federal budgeting should use a static analysis or dynamic scoring.  Generally, those on the left like static analysis, see, for example, here and those on the right like dynamic scoring, see, for example, here.  But those on the left will use dynamic scoring when it suits their purposes, just as those on the right will decry dynamic scoring when it suits their purposes.  

    For a short discussion of the pros and cons of dynamic scoring, see pdf here.

    Dynamic scoring is not "rigging the system."  It's a method of attempting to factor in the effect of a tax policy on further behavior and on the future as a macroeconomic matter. As that last paper says, it has flaws, but that does not mean it should not be attempted.  It is more useful for some purposes, less for others.  

    Personally, I'd like to see the CBO score budget proposals both ways, but that's me -- I think more information like that is useful, as neither a static analysis nor the dynamic scoring is likely to be completely accurate.  That would, however, deprive both sides of budget talking points.  

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