Some days there is just so much good stuff being published that it is hard to know when to stop blogging. New Economic Perspectives has the article Dynamic Scoring—a First Step? by J. D. Alt.

I think this is a brilliant presentation of how the federal budget is and is not like a household budget. The excerpt below is an example of how static scoring as opposed to dynamic scoring is like a very stupid way to run a household budget that would also  be a stupid way to run a federal budget.

The net result of static scoring in a budgeting process, of course, is that the “household” has a lot less calculable money to spend—and a much harder time justifying the spending of it—because the concept of “investment” and “return on investment” are not operable factors. It may well be, in fact, that the static “score” assigned by the Congressional Budget Office will indicate that the federal “household” cannot afford to buy any seeds at all. Just have to tighten our belts and do without. Unless, of course, we want to take money away from something else we’ve already agreed to spend it on. Then we can spend it. If we want to fix failing bridges, we have to NOT provide school lunches in poor urban neighborhoods. In other words, our Congressional leadership is operating with the approximate intellectual acuity and managerial insight of a five year old child on a weekly allowance.
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If nothing else, the ensuing analysis and debates would begin to demonstrate and establish one of the basic principles of modern money: that the purpose of sovereign spending is to pay people to do measurably useful things that result in returns with calculable value—like, for example, repairing dangerous bridges or instructing a society’s young adults in the art and technologies of the nation’s commerce.

Besides his household example, I like to point out that no self-respecting private business person would ever consider the cost of a capital investment without considering the return on that investment.  Any politician who claims to want pro-business policies ought not pretend that he or she does not understand the idea of return on investment.  Even socialists understand the concept.