Homepage / Currency / The hubris of ten-year budgets
How to get started with sext room BLACK SEO LINKS, BACKLINKS, SOFTWARE FOR MASS BACKLINKING BLACK SEO LINKS, BACKLINKS, SOFTWARE FOR MASS BACKLINKING BLACK SEO LINKS, BACKLINKS, SOFTWARE FOR MASS BACKLINKING BLACK SEO LINKS, BACKLINKS, SOFTWARE FOR MASS BACKLINKING Start your love story now – join our talk to gay strangers source today BLACK SEO LINKS, BACKLINKS, SOFTWARE FOR MASS BACKLINKING BLACK SEO LINKS, BACKLINKS, SOFTWARE FOR MASS BACKLINKING Find regional bbw hookups inside area BLACK SEO LINKS, BACKLINKS, SOFTWARE FOR MASS BACKLINKING BLACK SEO LINKS, BACKLINKS, SOFTWARE FOR MASS BACKLINKING BLACK SEO LINKS, BACKLINKS, SOFTWARE FOR MASS BACKLINKING новой Игровые Автоматы и Слоты Играть нежелающим И Без Регистрации В Новинки 202 test “aviator Cassinos Para Arriesgar No Jogo On The Internet Aviãozinho No Brasi Página 2 Time-tested legitimate one-armed bandits in internet club başari bet casino Mr Jack Bet Brasil Como Funciona? Análise Completa Do Sit Discovering the World of Psychic Analyses Understanding Numerology: Revealing the Mysteries of Figures Choosing a Tarot Card: A Step-by-Step Overview Unlock the Power of Psychic Checking Out Cards totally free Leading Neteller Gambling Enterprises: The Ultimate Guide Optimizing Your Profits with the very best Live Roulette Bonuses Gambling establishments trick Mastercard: Una guía completa para jugadores ¿ Qué es un microprestamo de 50EUR? Préstamo Aprobado Seguro: Todo lo que necesitas saber Numerology Examination: Opening the Keys of Your Life Path The Ultimate Overview to Free Online Tarot Card Readings Numerology: Opening the Secrets of Numbers Tarot Card Card Viewers: Introducing the Mysteries of the Future Open the Keys of the Universe with Free Online Tarot Card Analysis Checking out the Globe of Online Tarot Card Readings Checking out the World of Free Psychic Readings The Power of Free Lotus Tarot Card Analysis Select 6 Time-tested legitimate one-armed bandits in internet club başari bet casino Onze gids voor het vinden van de beste nieuwe online casino’s in Nederland Bookmaker şirkəti Mostbet: rəsmi mobil versiya icmalı Avantajlý 7slots giris Casino Seçenekleri Keyif Vermeye Hazýr Entertainment Club masal bet casino giriş and reel-based simulators: transformation through time Загрузка виртуальных симуляторов на официальном сайте проверенного казино 7к казино How to choose the right cougar hookup site for you Meet singles who share your values & interests Get many from the granny hookup experience Top greatest Flat planet dating internet site and software Reviews for 2021 – RomanceScams.org The advantages of being a premier cougar lesbian Официальный Сайт Гама Казин exactly what makes a milf hookup unique? MTV’s Catfish: The Digital Pen-Pal Syndrome | Are you presently a mother just who will pay youngster service or alimony? Meet wealthy men in uk that are seeking love “aviator Game Tanzani Meet suitable gay men within area 10 most useful locations in order to meet Cougars in Liverpool for 2023 Greatest Couples Dating Sites – Have The Knowledge You Are Entitled To 1xSlots Casino: Avaliação do Site 2024 Bonus-Jogos Официальный Сайт Ramenbet ✅Sugarbook Review: complete Site review & All of our Dating Experience 2023 Find your perfect aussie hookup now Discover the advantages of mature dating Providing A Capricorn Man The Silent Treatment – What Will Affect The Connection – LoveDevani.com Find the best site for bisexual women tips Welcome toward most useful millionaire chat rooms in the web Hook up with regional black singles now Mostbet giriş şəxsi hesab Azərbaycan I Did Not Put You Into The “Buddy Area,” We’re Not Right For One Another Чехол книжка Samsung M146 Galaxy M14, Leather Case Fold, Dark Red, Красный купить по цене 286 грн в Киеве и Украине Чехол для Huawei Nova 9 SE Купить чехлы Nova 9 SE Чехол для Oukitel iiiF150 B2 Ultra Купить чехлы iiiF150 B2 Ultra what exactly is craigslist and exactly how does it connect people? สล็อตPG เว็บตรงไม่ผ่านเอเย่นต์ PGOSCAR SLOT WALLET 2022 สล็อตเว็บตรง เล่น บาคาร่า ออนไลน์ แตกง่าย เล่นง่ายได้เงินจริง เกมสล็อตออนไลน์ยอดนิยม รวมทุกค่าย จ่ายจริง PG SLOT 5G พีจีสล็อตเว็บตรง ฝาก-ถอนไม่มีขั้นต่ำ ไม่ต้องทำเทิร์น 2023 สล็อตPG เว็บตรงไม่ผ่านเอเย่นต์ PGOSCAR SLOT WALLET 2022 สล็อตPG เว็บตรงไม่ผ่านเอเย่นต์ PGOSCAR SLOT WALLET 2022 Casino Betorspin Sitesi Kapsamlı İncelemesi Rabona Casino Online【Full Review & Bonus Offers】 Welcome towards gay dad chat community Find your perfect match on most readily useful cougar chat site The Art of Tarot Card Card Analysis: A Comprehensive Guide Free Tarot Readings: Opening Mysteries of the Future Unlocking the Mysteries: Tarot Card Readings Online Unlocking the Secrets of Free Tarot Readings Opening the Mysteries of Online Tarot Card Readings Tarot Readings Free: A Comprehensive Guide Discovering the Globe of Online Psychic Reading Numerology Birth Date Calculator: Discover the Tricks of Your Life Course The Power of the 6 Card Tarot Card Spread Name Numerology Calculator by Day of Birth The Ultimate Overview to Tarot Card Spreads The Ultimate Overview to Tarot 101 The Interesting World of Psychic Readings Opening the Mysteries of Online Tarot Reading Free Numerology Test: Opening the Secrets of Your Life Course Numerology Predictions by Day of Birth The advantages of making use of a gay bear website what exactly is a cougar and just why in the event you find one? Create your profile and begin communicating with your ideal partners Understanding the initial challenges of older and younger lesbians Find the perfect black milf for you

Currency

The hubris of ten-year budgets

IN February of 2001, Alan Greenspan, then still the chairman of the Federal Reserve, and still called the “Maestro”, testified to the Senate Budget Committee. The committee wanted to get started on the tax cuts George W. Bush had promised during his campaign. Mr Greenspan gave them his qualified blessing, with an argument that now sounds incredible: he was worried that America would pay down its debt too soon. 

That week the Clinton administration’s Office of Management and Budget had released its final ten-year budget projections. Firms had just completed several years of capital investments in desktop computers, and workers had become more productive. This had increased corporate revenue, and consequently taxes paid to the government. A long bull market in stocks meant that the Treasury was taking in more in capital gains taxes, too. “The experience of the last five to seven years,” said Mr Greenspan, “has truly been without precedent.” The Clinton administration had apparently left Washington with a gift. The annual budget surplus by 2011 would be $889 billion, for a cumulative gain over the decade of $5.6 trillion–exactly the size of the federal debt at the end of 2000. 

  • The president haunts the race for governor of Virginia

  • The hubris of ten-year budgets

  • A new biopic of Morrissey, Britain’s controversial music icon

  • Lobbyists know which way the Washington winds are blowing

  • In Ireland’s Jerusalem, calls to forgive are more than a platitude

  • Why so many African presidents are ditching term limits

And so the Fed chairman told Congress he was worried that the federal government might completely pay down its debt, and perhaps even start saving, investing its wealth in private assets. This could distort the efficient allocation of capital, worried Mr Greenspan. Preventing the government from completely squaring its accounts, by cutting taxes, could be a good idea. He cautioned that those cuts should be made contingent on the appearance of actual surplus, but reporters at the time took away a less nuanced message: Alan Greenspan approves of the Bush tax plan. 

Then several other things happened. The bubble in technology stocks evaporated, and with the shallow recession that followed, so did some of the forecast tax revenue. Terrorists flew planes into the Pentagon and the World Trade Center, and taxpayers had to fund two wars. Later in the decade, a huge financial crisis and deep recession reduced tax revenues, raised payments for things like unemployment insurance, and scared Congress into two separate stimulus bills. The $5.6 trillion cumulative savings that the Office of Management and Budget predicted in 2001 turned into a $6.1 trillion cumulative deficit. America’s ten-year forecast was off by $11.7 trillion. 

Alan Greenspan, one of the great economists of his or any generation, did not see these things coming. We can forgive him for that; few other people did, either. The problem is not that he was wrong, but rather that we have no business thinking we know what’s going to happen over the next ten years. 

As members of Congress and the administration start to talk about taxes again, they reckon their sums in ten-year increments. “This will save $400 billion” means “At the end of ten years from now, we will have saved $400 billion.” Two common tricks cavort under this blanket. The first is when the most painful changes–the ones that save the most money–don’t take hold until year seven or even year nine. The second is that today’s Congress can direct future lawmakers to figure out which painful changes to make to meet the ten-year target. Both tricks ultimately fail for the same reason: no Congress likes to make painful changes, and tomorrow’s politicians are no more virtuous than today’s. 

But suppose Congress is doing its job honestly, rather than deferring hard choices. Ten-year budget projections are still misleading, for a more fundamental reason: we just aren’t that good at predicting the future. Forecasts often fail catastrophically in the face of some seismic event such as financial collapse or the Euro crisis. There is routine bias, too. A 2011 study by Jeffrey Frankel in the Oxford Review of Economic Policy found, unsurprisingly, that governments tend to be too optimistic. 

Ten-year budgeting isn’t universal. The European Union directs its member states to predict budget trends over three years, and that is what most of them do. Europe has hardly been a paragon of conservative prediction since 2000, but the limited three-year horizon does admit some humility. Even a perfect model would omit what economists call “exogenous shocks”. This is a fancy way of saying “stuff we couldn’t possibly have seen coming”. Things like 19 terrorists on four planes. Or the almost total collapse of capital markets.  

So during the next six months of fighting over taxes, every time you hear a member of Congress say what she’ll save over the next ten years, wonder what she’ll be willing to sign for next year. Even better, demand that Congress finally heed a bit of overlooked advice that Alan Greenspan offered back in 2001. 

As for tax policy over the longer run, most economists believe that it should be directed at setting rates at the levels required to meet spending commitments, while doing so in a manner that minimizes distortions, increases efficiency, and enhances incentives for saving, investment, and work.

Simple advice. Hard to pull off. 

NextPodcast: Goodbye, Benito

Source: economist
The hubris of ten-year budgets

Comments are closed.