Building Models and Guessing

Blog Post
Monday, October 19, 2009

I have written a lot in this blog about the Congressional Budget Office and their estimates (here is the latest example). Today, the Washington Post has another great article explaining the process.

Reading it, I thought about how many things we do here at Concord that depend on CBO. We have been working over the last few weeks updating all of our education exercises with CBO information and data. Next week we will be unveiling a new online budget game that also is based on CBO publications. As is our plausible baseline, chart talks and many of our issue briefs.

We do this not because CBO can see the future, but because having a neutral umpire (especially one easily searchable online!), makes what we have to say stand out--because we don't have to spend as much time worrying or fighting about the data we use to illustrate our points. 

Put another way, what makes our plausible 10-year deficit of $14.4 trillion stand out is not that we crunch the numbers using some highly sophisticated data analysis (CBO does--all we do is add it up). Instead, it is that we use those numbers to demonstrate how fiscal policy, as currently practiced by Congress and the President, is unsustainable and irresponsible.

An even broader point we often make on the Fiscal Wake-Up Tour is that what we do is not about is about morals. It is about what type of country we want to leave for future generations. Do we want to constrain them with unprecedented levels of debt, slow economic growth and a poor standard of living? Or, do we want to change course sooner rather than later, and have future generations inherit a fiscally stronger nation than the one we inherited? 

Making this case well is easier because we have CBO numbers that people respect as neutral, educated measures, not because CBO projections are exact or foolproof. And I would suggest, as does the Post article, that is why they work so hard to do what they do, and why they do it so well. So, from everyone at Concord, let me say "Thanks CBO!"