Journal of Economic Perspectives: Vol. 14 No. 3 (Summer 2000)


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The Tyranny of Budget Forecasts

Article 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.14.3.205


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.

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Foster, J. D. (Tax Foundation, Washington, DC)
Miller, James C. (Citizens for a Sound Economy Foundation and George Mason U)

JEL Classifications

H61: National Budget; Budget Systems


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