Sunday, July 03, 2011

Better chicken

Chidem Kurdas describes the game of budget-chicken now being played in Washington and is not optimistic; the Democrats' "salami strategy" is winning.  "The money has been spent, we have to find a way to pay for it, etc."

Reagan's Starve the Beast did not work (the beast kept growing) so now we will get Feed the Beast.  What's left?

The Congressional Budget Office describes their mandate this way:

CBO's mandate is to provide the Congress with:

Objective, nonpartisan, and timely analyses to aid in economic and budgetary decisions on the wide array of programs covered by the federal budget and

The information and estimates required for the Congressional budget process.
That's much too vague.  I would prefer that all programs (taxation and expenditure) were tagged along two dimensions:  (i) what are the long-term growth implications, pro-growth or not? and (ii) what are the redistribution effects, neutral, regressive or progressive?

Of the six possible tags, my own preference is pro-growth and redistribution neutral, although I could see the argument for pro-growth and progressive.  The analysis is tricky, but so is everything CBO already does.  Honest analysis will require honest caveats, but this is already part of their mode.

If we have reached a point were large segments of the electorate have accepted that "kicking the can down the road" is no longer acceptable, then the current game will be repeated, but the analysis CBO already publishes does not do enough to inform the public or the players of the chicken game. 

So, for starters, let's have the most useful analysis and then let the game begin.