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February 07, 2012 4:35 PM “Dynamic Scoring” Rears Its Ugly Little Head

By Ed Kilgore

One of the crankiest of long-standing conservative demands has been for “dynamic scoring” in federal budget estimates. To make a long, tedious story short, “dynamic scoring” would incorporate supply-side assumptions about the growth-generating magic of tax cuts into official budget estimates, enabling conservatives to evade the deficit-boosting implications (and various congressional barriers that come along with them) of their pet proposals for reducing the tax burden of “job creators.”

The ever-intrepid Bruce Bartlett notes at the New York Times’ Economix blog that with no real fanfare, the House passed a resolution requiring “dynamic scoring” as a sidebar to the Congressional Budget Office’s conventional reports. As you might expect, the new report will be “fair and balanced” only in the Fox News sense of the term:

[T]he House-passed legislation would not require a dynamic estimate for appropriations bills, no matter how large. Republicans want the world to know that tax cuts expand real G.D.P., the capital stock and labor supply, but if spending has any such effect they don’t want anyone to know. Implicitly, Republicans want everyone to think that spending never raises growth because it’s their dogma.
But in the real world, everyone knows that government investments in the national highway system, medical and other scientific research, and other programs unquestionably add to growth. And there are times when government spending can provide macroeconomic stimulus, which the C.B.O. has repeatedly documented, to the consternation of Republicans.

It’s all a mostly symbolic issue, but is part and parcel of the GOP’s longstanding efforts to incorporate its ideology into supposedly objective and nonpartisan sources of information. But aside from the “dynamic scoring” issue, Bruce’s post is worth a careful read because it provides a succinct history of supply-side economics and its baleful impact on the budget and every other element of national policy.

Ed Kilgore is a contributing writer to the Washington Monthly. He is managing editor for The Democratic Strategist and a senior fellow at the Progressive Policy Institute. Find him on Twitter: @ed_kilgore.

Comments

  • kevo on February 07, 2012 4:58 PM:

    No matter how hard they try, the Republicans can't make the supply-side pig sing, or fly for that matter! Yet, they keep trying. If they'd only realize lipstick on a pig can't help it to sing or fly!

    Dynamic scoring is yet another arrow of denial in the quiver of Republican crazy!

    Economists should shout bull shit on supply-side from the highest of all heights so we all can hear it once and for all!

    The trickle down theory is, in reality, a tinkle on dynamic moistening all of us making under $250,000 annually! -Kevo

  • SKM on February 07, 2012 6:00 PM:

    What I normally do, when people try to convince me of the GOP's argument about the entitlements/pensions/taxes is email them a copy of these "Tax Havens: Undermining Democracy," http://www.globalissues.org/article/54/tax-havens-undermining-democracy and "Corporations and Worker's Rights" http://www.globalissues.org/articles/57/corporations-and-workers-rights these two articles normally seal the deal to show them how - such as the GOP are saying they must have tax breaks for corporations or they'll leave - this is something the article mentions, that the big corporations do to emerging countries - they promise to bring in work and build up infrastructure, instead, the corporations take the resources of the country...

  • Ken on February 07, 2012 9:20 PM:

    growth-generating magic of tax cuts

    Except payroll tax cuts, which have to be paid for by offsetting spending cuts.

  • a on February 08, 2012 3:09 AM:

    Good for the GOP. That Congress required the CBO to use static scoring was a scandal and that deceitful politicians pretended that static scoring reflects reality was a worse scandal.

    There are zero economists who would claim that changes in tax rates have no effect upon growth, so this is as it should be.

    Yes, static scoring is hard, and this should be reflected in appropriate caveats and error bars. But it gets us closer to reality than does the current regime.