Slate Daily Feed Slate Money | Money Talks: Philosophy of The Budget
Jun 10, 2025
Barry Lam, the host of Hi-Phi Nation and a philosopher focused on economics, joins to engage in a thought-provoking discussion about the GOP's approach to budget deficits. They delve into philosophical arguments from Hume and Descartes that inform contemporary fiscal debates. The conversation covers the intricacies of political rhetoric, the paradox of prediction, and the implications of legislative baselines. Lam also highlights how language shapes political discourse and the perils of selective skepticism in understanding economic realities.
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Deficit Changes Require Baseline Choice
- The deficit increase is a comparison between two hypothetical future scenarios, not just year-to-year change.
- The baseline used for comparison is critical to interpreting the deficit impact of a budget bill.
CBO's Current Law Baseline Explained
- The Congressional Budget Office uses the current law baseline, which assumes no bills pass and existing law continues.
- Other baselines like current tax rates could be used but would change the perceived fiscal impact.
Tax Cut Expiration Lowers Deficit
- The 2017 Tax Cut and Jobs Act (TCJA) tax cuts expire after 8 years, causing tax rates to increase under current law.
- This expiration reduces the deficit projected under the current law baseline starting in 2026.