America is in a full-blown economic depression, but Democrats are anxious about whether fixing it will cost too much. In the most recent economic rescue package — one the party itself admits is only a “messaging” bill, since it already gave away most of its leverage — Democrats scaled back their student loan forgiveness program and axed an idea for economic stimulus that would continue on autopilot for as long as the crisis lasts, because of scary possible estimates of the cost.
It’s hard to describe just how blinkered this is. It’s like a man who is drowning in the middle of the North Atlantic worrying about how flammable his clothes are. But there is a big reason aside from Democrats’ knock-kneed cowardice this happens — the Congressional Budget Office (CBO), which informed Democratic leaders they would produce big price tags for both of the above programs. But as we’ll see, their analysis is garbage. This agency exercises a tyrannical control over the parameters of spending discussions in this country, and slants them heavily towards austerity. Democrats should close their ears to this nonsense.
To begin, the CBO “scores” legislation by estimating its budget cost over a 10-year window. Right out of the gate this is a misleading way to do things. When thinking about the price of something, logically what one should consider is the qualities of the item relative to one’s ability to pay. That requires additional thought in the case of the government, because it has the best credit in the world, and borrows in a currency it can print. For some proposed federal program, therefore, the wise place to start is not the headline figure of required spending, but the size of spending relative to the whole economy.
Instead the CBO window leads to reporters writing stories citing the 10-year figure without that critical context. ObamaCare has “a price tag of $848 billion over 10 years,” wrote Robert Pear and David M. Herszenhorn in the