Joshua Rauh and Benjamin Jaros make the case for greater transparency in government data. A slice:
Washington is hurtling toward a spending crisis, but the fiscal watchdogs meant to check its excesses are already trapped in a crisis of credibility. Congress, for good reason, increasingly distrusts the estimates from the Congressional Budget Office and its tax-scoring counterpart, the Joint Committee on Taxation, which play a vital role in federal budgeting. It’s not just grousing that these agencies sometimes deliver lawmakers bad news. Years of opacity from the CBO and JCT have produced costly errors that no one outside the agencies could detect before it was too late.
That cost falls on voters. Errors from the CBO and JCT mean more taxation or that funding for programs comes up short—either way leaving everyday Americans holding the bag. Which is why the public should hope CBO director Phillip Swagel was making a real commitment when he testified before the House Budget Committee on Nov. 18 that transparency is a “fundamental goal” of the agency. Without insight into how the CBO and JCT arrive at their estimates, it’s all but impossible to locate errors until after the legislation has passed. The CBO’s latest mistake was scoring the One Big Beautiful Bill Act with interest-rate assumptions and methods that the agency was still actively updating. Yet the CBO presented the estimates as if they were definitive, leaving legislators working from a report that likely overstated the deleterious budget effects.
In recent legislative debates such as that over the OBBBA, it’s become all the more apparent that the CBO and JCT estimates continue to come from black-box models updated without documentation and applied inconsistently across legislation. In work with our Hoover Institution colleague Daniel Heil, we’ve documented that key assumptions remain hidden, model revisions are made without explanation, and even politically consequential scores rely on unpublished or soon-to-change methods.
The large misses that have resulted in recent budget scores have fueled distrust of the agencies. In scoring the Inflation Reduction Act, the CBO and JCT made erroneous forecasts for key components of the 2022 legislation. The JCT underestimated the costs of the law’s energy tax credits by at least $400 billion. And early returns from the IRA’s Medicare Prescription Drug Price Negotiation Program suggest the CBO was far too optimistic about the program’s price cuts.
The Endangered Species Act of 1973 is one of America’s most far-reaching environmental laws. It can stop projects, block land use, and impose sweeping restrictions to protect wildlife. Yet after more than half a century and billions of dollars, only 3% of species deemed threatened or endangered under the act have recovered and are no longer in peril.
The Trump administration recently proposed reforms to correct one of the act’s most counterproductive aspects. Environmental groups responded with fury in the predictable ritual that accompanies any re-examination of the law. “Trump’s proposals are a death sentence for wolverines, monarch butterflies, Florida manatees and so many other animals and plants that desperately need our help,” said Stephanie Kurose of the Center for Biological Diversity. Fundraising emails warned of mass extinctions. Critics lamented that protections were being “gutted.
These warnings don’t match reality. The proposed changes aren’t a rollback. Instead, they codify a lesson that Democratic and Republican administrations alike have learned: Rigid, one-size-fits-all regulations can backfire, and that species recover faster when local communities have a reason to help rather than fear federal enforcement.
As usual, Arnold Kling is insightful:
When it comes to health care policy, you can try to sound sophisticated by citing “asymmetric information” as an explanation for why government intervention is appropriate. But I think that those rationalizations are off base.
The reason that we have government intervention in health care is that we have an instinct that making an individual pay for health care is immoral. It is taking advantage of the individual’s misfortune.
When someone is desperately poor and needs to borrow money to keep from starving, charging interest is regarded as immoral. Back in the day, that is what made usury a sin and made Shylock a villain.
When someone is suffering from illness, making them pay for treatment is analogous to usury. Still, we understand that health care providers deserve to get paid. So we turn payment for treatment into a collective problem, to be dealt with by insurance or, ultimately, by socialism (government).
I think that the moral intuition that an individual suffering from a health problem should not have to pay for treatment is something that we need to re-think. In the 21st century, the array of medical services is so vast and so varied that it is no longer appropriate to take away the individual’s responsibility for paying. As an individual, you think you have “good” health insurance if it pays for eyeglasses and teeth cleaning and for every precautionary MRI. But for society as a whole, it is not good.
Stefan Bartl explains that liberty creates abundance.
GMU Econ alum Dave Hebert remembers Walter Williams. A slice:
Walter’s impact on me is enduring, both professionally and physically. Professionally, he instilled in me both an appreciation for economics done right and the difference between education and proselytization. Walter suffered no fools and was demanding in his grading and in his writing. You were not going to get any leeway for using the wrong word and pleas of, “but this says the same thing!” would absolutely fall on deaf ears. You were expected to know your stuff and to know how to communicate it well.
He also instilled in me the importance of how one conducts themself in the classroom. Professors are there to educate, not to proselytize or indoctrinate. Walter took great care to never use any type of normative language, keeping everything positive. “Will minimum wage legislation lead to disemployment effects, yes or no?” is a scientific, and positive question. “Should we raise the minimum wage or not” is fundamentally different question because it involves evaluating trade-offs and is inherently value-laden/normative. You can use positive analysis to inform your normative conclusions, sure, but the two are fundamentally different. Testing students on the latter is indoctrination. Testing them on the former is education. Walter instilled in all of his students the importance of never indoctrinating students.
For him, this was incredibly impressive. He was (obviously) a prolific writer, so his normative stances on so many issues were easy enough to find. And plenty of people who were not enrolled at GMU would sit in on his classes, hoping to learn why the democrats were wrong… or something. They’d ask questions about Walter’s stance on some policy and he’d just reply, “You can look that up on your own time, Mr. Whatever. We’re here to learn economics, not talk politics.”
Physically, Walter is the man who designed the tattoo on my right bicep. After passing my microeconomics prelim exam after my first year of grad school, I was ecstatic. I went straight to Walter’s office and asked him if he would draw one of the economics graphs from the exam for me. He looked confused and said, “Mr. Hebert, as you demonstrated, you are more than capable of drawing that picture yourself.” But when I told him that I wanted to get it as a tattoo and that it would be a tremendous honor if he would draw it himself, he chuckled. “In all my years, nobody has asked me to design a tattoo for them. Can I bring it to you tomorrow? I want to make sure I draw it well.”
