The (Spending) Devil Is in the Details
When I lived in Washington, it often struck me that the secret to reducing opposition to spending was to make it boring. The Congressional Budget Office has just confirmed this.
In an excellent posting on his own excellent website, my former White House colleague Keith Hennessey discusses the arithmetic that went into the CBO's finding that Obamacare would "reduce federal budget deficits over the 2010-2019 period by a total of $143 billion." Now -- five months later -- they reveal the math: while mandatory outlays were projected to rise by $401 billion, revenues would go up $525 billion.
I'm not going to repeat everything Keith says here: he is one of the cleanest writers on economics out there, so it's worth seeing for yourself. He doesn't fault the CBO scoring. But he rightly points out that we would have had a more honest debate if people knew that the savings weren't cost or spending reductions but the result of expected higher revenues from higher taxes.
- Comment (5)
- · Quote
- · UnfollowFollow (1)
Comments :
Jul '10
Re: The (Spending) Devil Is in the Details
We're an easily-distracted people.
Politicians on the Left and the Right have been able to direct our attention away from their corrupt, self-perpetuating spending through the cynical device of noisy, pointless culture wars.
May '10
Re: The (Spending) Devil Is in the Details
Or perhaps the answer is to ensure that everyone in D.C. has camera and internet capabilities on their cellphones... and Twitter.
Pelosimama: "@ineverReid Woo hoo! $2.4 billion before lunch! You're buying."
May '10
Re: The (Spending) Devil Is in the Details
Not only is the "devil in the details" but the specific details where the devil usually hides are the assumptions on future activity. A chain of assumed events, a "first this, then this, and then this..." logical chain, is not like a physical chain that is "as strong as it's weakest link". The weaknesses of each "link" in the chain add up such that the chances of completing the whole sequence is very low.
There are ways of doing an honest analysis that reveals the most likely result and the potential upside and downside, but Congress prefers to ignore the statistical realities and believe that each assumption is near certain. We know better. Those savings are unlikely and those new revenues a fantasy, so the projected result is the sum of both, an unlikely fantasy.
Be prepared for more headlines about "unexpected" under-performance.
Re: The (Spending) Devil Is in the Details
Bingo.
Re: The (Spending) Devil Is in the Details
I found this conclusion especially troubling:
That sounds like the right answer, especially in light of last year's shameful episode in which Obama took CBO Director Elmendorf "to the woodshed" for daring to cast doubt on health care reform's elusive cost savings.