Free Republic

The Left is so used to controlling information that they believe it to be their birthright.  For nearly 100 years, they’ve assumed the mantle of impartiality simply to cover their own failed policy aspirations.  Now they are all going bat-guano crazy because the Republican majority in Congress wants to make a small dent in the gleaming fact-fogging machine the Left has built, by directing the Congressional Budget Office to use “dynamic scoring”.  Yawn. A quick explanation:  if you raise or lower taxes, what will be the effect on consumer and business behavior?  Will businesses hire more and produce more if...

WASHINGTON (Reuters) - The U.S. House of Representatives voted on Tuesday to incorporate macroeconomic projections into cost estimates for major legislation, a move that critics say could hide the true budgetary effects of tax cuts. The move toward "dynamic scoring" is part of a package of new rules that passed on a 234-172 party-line vote as the new Republican-controlled Congress started its work.

BackgroundWhy do I care about Dynamic Scoring? If you pay taxes and care about long term economic growth, you should become familiar with the concept of Dynamic Scoring. Today, Congress projects funding increases from a tax rate change without regard to impacts on incentives and economic behavior. The costs associated with lost incentives can be 17% of lifetime consumption as will be seen in the social security case study. The process of static scoring opaquely measures the impact of tax rate changes. While Static versus Dynamic Scoring may sound arcane at first, they boil down to accurately and transparently measuring...

While Katrina relief has now jumbled the numbers, the rapidly declining federal deficit projections this past summer revealed a critical challenge for national economic policy making. Once again, they showed that the scoring of the effects of major policy changes performed by the Office of Management and Budget and the Congressional Budget Office were highly erroneous. The errors were not random. They were strongly and consistently biased against pro-market, pro-growth reforms, and they are the long-recognized results of outdated methodologies employed by federal scoring agencies. The end result is that such errors greatly hamper or prevent Congress from adopting policies...