The Law and Economics of Frédéric Bastiat
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Fiscal Mayhem

Jonathan B. Wight

The ethical shenanigans of the budget process make this fiscal conservative want to tear his hair out.

First, as pointed about by Krugman, the Heritage Foundation report that is the basis for Paul Ryan’s magic budget proposal predicts an ultimate unemployment of 2.8% by 2021.  That number seems so far-fetched that even the Heritage Foundation apparently “white-washed” that number out of the report in the last day or two...

What are the ethical obligations of economists?  Is it acceptable to obscure assumptions just because it becomes a political hot-potato?  Shouldn’t we know what the budget plan relies on?

Second, there is the ethically-questionable practice of mis-stating the positions of other economists. 

Paul Ryan said on “Morning Joe” yesterday that “Alice Rivlin and I designed these Medicare and Medicaid reforms.”  Unfortunately, Rivlin notes that she did NOT design the program Ryan submitted!  Alice Rivlin stated:  “…very strongly that I don’t support the version of Medicare premium support in the Ryan plan.”  Rivlin was subjected to a bait-and-switch.

So…  we have a budget proposal with fictitious predictions and a bait-and-switch pedigree.

Those of us old enough remember David Stockman’s shenanigans as OMB director under President Reagan can only cringe as we remember that fantasy budget that led to a huge surge in the deficit.

The desirable and necessary goal of reigning in entitlement spending does not entitle economists to lie and mislead in pursuit of that aim.  This is another example of why we desperately need a code of conduct for economists.


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