Recently, House Republicans have quietly made some changes to how future tax and spending laws are analyzed for their estimated costs and benefits on government budgets and the economy. This concept is referred to as "scoring". Up until these recent changes, we had been using "static scoring". Republicans would prefer "dynamic scoring".
Under static scoring, the estimated effects
of proposed spending and tax policies are based on the notion of a fixed
government pie. Think of this as more of a microeconomic analysis of how the policy might alter relative prices, change behavior, and impact sensitive populations. Static scoring does
not emphasize an estimate of the future economic pie enhancing qualities of the
change in behavior, to do so would be to use the analysis to “dynamically”
score the proposed policy. Dynamic
scoring is an attempt to estimate the future economic impacts of proposed
spending and tax policies and include those estimates into a measure of how the
future economic pie might change. Therefore, dynamic scoring relies on long term
assumptions about economic growth, interest rates, inflation, and the global
economy. Policy
changes that might suggest future increases in the economic pie might be scored
higher despite near term budget deficits or adverse impacts on sensitive populations.
Static scoring evaluates the proposed
spending or tax policy with emphasis on the government’s current budget and
looks to see if the policy is paid for with offsetting taxes or spending. Static scoring also evaluates policy based on how the economic pie is divided. The logic behind using static scoring is that
if the uncertain dynamic macroeconomic benefits of the proposed policy do not
materialize, then there is less harm done because the dynamic macro effects
were not taken into account – there was no expectation. If they do materialize, then it is a
bonus. However, the downside of static scoring is
that policy makers may be too fiscally conservative (ironic?) and the process could result
in a bias away from major policy and tax code overhauls.
To adopt dynamic scoring means that spending
and tax policy proposals and their acceptance will be influenced by uncertain
macro effects. Dynamic scoring could
also include assumptions about future changes in other policies. As one might guess, this opens up
opportunities to manipulate estimates based on preferred economic assumptions which have
the potential to be politically driven. If policy proposals are favored based
on dynamic scoring and the estimated economic benefits do not materialize, we may
be left with deficit increasing and economic pie reducing policies. Dynamic scoring puts more weight and
consequences on correctly predicting the future in a very uncertain world.
OK, I follow your argument. You're upset about being told what to do and you think that if we just leave it all up to benevolent wealthy people to provide public goods through charity when they "please", everything will be better. But we know it will not, too many of the haves will free ride off those they feel are even better off, it's human nature. In the end, we will not be able to provide an adequate level of public goods and services needed by society, and that will have very costly long term effects. We know from economic research and historical trial and error that the best solution is to create some sort of fair social contract. Don't get hung up on government, government is synonymous with social contract. Our mixed private/public system is one form of the contract, socialism and communism are others. We get to choose the contract that we feel is best but no contract will be perfect nor will everyone like it the same. Some will attempt to take advantage of the loopholes in the contract, some will argue they are overly burdened in the contract, that's never going to change. When you change the terms of the contract to help some, it will always cause others to pay more, you hope that on net the changes you made to help outweigh those who lose. The ACA could have been better but those who were going to lose paid their lobbyists more to weaken cost control measures on the health care industry. We caved on making the penalty (read: incentive to encourage the right balance in the social contract) for not getting insurance by those financially capable high enough. Yet despite these shortcomings, which hopefully government can address in future years, the ACA is on net, better social contract language then we had, that is not disputable. If others can come along and suggest better contract language that our best economic estimates say,on net, will be better than what we have now, I'll be there to vote for it even if that means I'm one of the losers, because that's what successful societies and economic systems need to do.