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  • Economics Is a Gimmick According to Jordan Weissman

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    \Jordan Weissmann of Slate writes that using modern economic methods in budgetary analysis is a “trick…gimmick…fantasy…miraculous…flight of fancy…picking a number out of a hat.” Weissmann’s immediate target is Rep. Paul Ryan’s (R–Wis.) new budget. But his haphazard insults implicitly spread to the Congressional Budget Office (CBO) and the general use of economics in budget analysis. Weissmann apparently thinks lawmakers should not trust CBO’s estimates of budget effects.

    There are two ways to perform budget analysis. One is to assume that government policies have no impact on the economy at all. The other is to do one’s best to estimate the direction and size of the impact of policies, taking into account that the economy and the policy effects are very uncertain. Weissmann prefers the stopped clock method, hoping it’s right twice a day.

    Dynamic scoring is one application of economic estimation to policy, and relies on using the best available estimates and recognizing that every estimate is uncertain. No model can capture the full complexity of the real world, and each type of model has its shortcomings. Usually economists debate the size of the impact that government debt or policies have on the economy. It’s strange for someone to …read more

    Source: The Heritage Foundation