Freedom Line Blog

As this piece from Reason explains, the Congressional Budget Office (CBO) is pretty much the final word on whether a bill is perceived as saving money, costing money, or having no fiscal effect. By most accounts, the CBO is staffed by competent people making the most objective calculations possible. The problem is, what’s possible?

The question goes to the heart of the dispute between central planners and free market types. While the former thinks that the intricacies of human behavior can be predicted (and influenced) with the right data and formulas, the latter can’t help but see the endeavor as nothing more than chasing after an economic Bigfoot. For all its sophistication, the CBO is still bedeviled by the criticism that it simply doesn’t know enough information to render any kind of economic certainty.

These days, CBO analysts are scoring bills using intricate computer simulations based in large part on survey data. The raw information is interpreted through academic research on how human beings respond to various economic assumptions. In an interview with The Washington Post, the CBO’s chief health care analyst, Phil Ellis, compared the process to playing Sim City, a computer game that simulates urban development. But even the best model is still only as good as its input data. And for policies that have no real-world antecedent, it’s extremely difficult to come up with accurate input data.

In fact, it may be impossible. But that doesn’t really matter to the Democrats pushing health care “reform.” As long as they can get the non-partisan CBO to score their proposals as saving money – no matter how unreliable the data – their primary purpose of expanding coverage is served. Make no mistake; liberals are pushing universal – not cost effective – health care. Like their Soviet-era predecessors, today’s central planners can’t predict the future, no matter how much survey data they throw at the forecasters working at the CBO. That certainly won’t stop them from trying though.