Dynamic scoring

Via Craig Newmark on MR, I discovered a wonderful blog (with no RSS/atom feed… for shame). As I was browsing, I ran into the term “dynamic scoring.” I’ve seen it a couple times before, but always mentioned in passing.

What is it?

OMB Watch says, “Dynamic scoring refers to the factoring in of possible increases in economic growth when “scoring,” or calculating, the amount of lost revenue a tax cut will result in. Advocates of dynamic scoring argue that the practice offers a more realistic view of the likely budget effects of tax cuts by incorporating increased business activity that they argue accompanies lower tax rates. Opponents point out that dynamic scoring masks the true costs of tax cuts by relying on the potential for an increase in revenue that many economists argue is unlikely.”

Brad Delong implies that there is a consensus among economists regarding the effects of dynamic scoring.

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