Journal of Economic Perspectives
ISSN 0895-3309 (Print) | ISSN 1944-7965 (Online)
The Tyranny of Budget Forecasts
Journal of Economic Perspectives
(pp. 205–215)
(Complimentary)
Abstract
The evolving federal budget process has placed increasing demands on, and given unique powers to, the economic forecasters at OMB, Treasury, CBO, and the Joint Tax Committee of Congress. On the whole, the forecasters have been highly professional in their work, but differences in estimating techniques and, especially, constraints imposed on their analysis by elected officials have limited their credibility. Both the Administration and Congress "game" the system and even ignore the budget rules when convenient. Thus, a sophisticated budget process can help, but cannot assure, sound fiscal policy in the absence of political will to make hard decisions.Citation
Foster, J., D., and James C. Miller. 2000. "The Tyranny of Budget Forecasts." Journal of Economic Perspectives 14 (3): 205–215. DOI: 10.1257/jep.14.3.205JEL Classification
- H61 National Budget; Budget Systems