Exploring the Hidden Ideology and Power of Budget Models

In yesterday's essay, I broke down the new series from @TheProspect on the hidden ideology and power of budget models, these being complex statistical systems for weighing legislative proposals to determine if they are "economically sound."https://t.co/AOHqP3jhqR 1/ pic.twitter.com/NmUcte6Q5F

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) April 4, 2023

If you'd like an essay-formatted version of this thread to read or share, here's a link to it on https://t.co/iSBh8sqXw0, my surveillance-free, ad-free, tracker-free blog:https://t.co/gj4RZjw9Sd 2/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) April 4, 2023

The assumptions baked into these models are intensely political, and, like all dirty political actors, the model-makers claim they are "empirical" while their adversaries are "doing politics": 3/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) April 4, 2023

Today edition of the *Prospect* continues the series with an essay by @SenWarren, describing how her proposal for #UniversalChildCare was defeated by the incoherent, deeply political assumptions of the #CongressionalBudgetOffice's model:https://t.co/UeodTCLoRR 4/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) April 4, 2023

The model crushed a popular, badly needed policy simply by declaring, #ComputerSaysNo.

When the #BuildBackBetter bill was first mooted, it included a promise of universal, federally funded childcare. 5/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) April 4, 2023

This was excised from the final language of the bill (renamed the #BipartisanInfrastructureBill), because the #CBO said it would cost too much: $381.5b over ten years. 6/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) April 4, 2023

This is a completely nonsensical number, and the way that CBO arrived at it is illuminating, throwing the ideology of CBO modeling into stark relief. You see, the price tag for universal childcare *did not include the benefits* of childcare! 7/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) April 4, 2023

As Warren points out, this is not how investment works. No business leader assesses their capital expenditures without thinking of the dividends from those investments. 8/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) April 4, 2023

No firm decides whether to open a new store by estimating the rent and salaries and ignoring the sales it will generate. Any business that operates on that basis would never invest in *anything*. 9/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) April 4, 2023

Universal childcare produces *enormous* dividends. Kids who have access to high-quality childcare grow up to do better in school, have less trouble with the law, and earn more as adults. 10/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) April 4, 2023

Mothers who can't afford childcare, meanwhile, absent themselves from the workforce during their prime earning years. Those mothers are less likely to advance professionally, have lower lifetime earnings, and a higher likelihood of retiring without adequate savings. 11/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) April 4, 2023

What's more, universal childcare is the *only* way to guarantee a living wage to childcare *workers*, who are disproportionately likely to rely on public assistance, including #SNAP (AKA #FoodStamps) to make ends meet. 12/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) April 4, 2023

These stressors affect childcare workers' job performance, and also generate public expenditures to keep those workers fed and housed.

But the CBO model does not include *any* of those benefits. 13/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) April 4, 2023

As Warren says, in a CBO assessment, giving every kid in America decent early childhood care and every childcare worker a living wage produces the same upside as putting $381.5 in a wheelbarrow and setting it on fire. 14/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) April 4, 2023

This is by design. Congress has decreed that CBO assessments *can't* factor in secondary or indirect benefits from public expenditure. This is *bonkers*. 15/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) April 4, 2023

Public investment is *all* secondary and indirect benefits - from highways to broadband, from parks to training programs, from education to Medicare. 16/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) April 4, 2023

Excluding indirect benefits from assessments of public investments is a literal, obvious, unavoidable recipe for ending the most productive and beneficial forms of public spending. 17/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) April 4, 2023

It means that - for example - a CBO score for Meals on Wheels for seniors is not permitted to factor in the Medicare savings from seniors who can age in their homes with dignity, rather than being warehoused at tremendous public expense in nursing homes. 18/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) April 4, 2023

It means that the salaries of additional IRS enforcers can only be counted as an expense - Congress isn't allowed to budget for the taxes that those enforcers will recover. 19/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) April 4, 2023

And, of course, it's why we can't have #MedicareForAll. Private health insurers treat care as an expense, with no upside. Denying you care and making you sicker isn't a bug as far as the health insurance industry is concerned - it's a feature. 20/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) April 4, 2023

You bear the expense of the sickness, after all, and they realize the savings from denying you care.

But *public* health programs can factor in those health *benefits* and weigh them against health *costs* - in theory, at least. 21/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) April 4, 2023

But the budgeting process refuses to factor in "indirect" benefits - like the fact that treating your chronic illness lets you continue to take care of your kids and frees your spouse from having to quit their job to look after you. 22/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) April 4, 2023

And so public health care costings become indistinguishable from the private sector's for-profit death panels. 23/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) April 4, 2023

Child care is an absolute *bargain*. The US ranks 33d out of 37 rich countries in terms of public child care spending, and in so doing, it kneecaps innumerable mothers' economic prospects. 24/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) April 4, 2023

The upside of providing care is enormous, far outweighing the costs - so the CBO just doesn't weigh them.

Warren is clear that there's no way to make public child care compatible with CBO scoring. 25/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) April 4, 2023

Even when she whittled away at her bill, excluding millions of families who would have benefited from the program, the CBO still flunked it. 26/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) April 4, 2023

The current budget-scoring system was designed for people who want to "shrink government until it fits in a bathtub, and then drown it." It is designed so that we can't have nice things. It is designed so that the computer *always* says no. 27/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) April 4, 2023

Warren calls for revisions to the CBO model, to factor in those indirect benefits that are central to public spending. 28/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) April 4, 2023

She also calls for greater diversity in CBO oversight, currently managed by a board of 20 economists and only two non-economists - and the majority of the economists got their PhDs from the same program and all hew to the same orthodoxy. 29/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) April 4, 2023

For all its pretense of objectivity, modeling is a subjective, interpretive discipline. 30/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) April 4, 2023

When modelers are steeped in a single school, they incinerate caveats that should be integrated into every modeler's conclusions, the humility that comes from working with irreducible uncertainty. 31/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) April 4, 2023

Finally, Warren reminds us that there are *values* that are worthy of consideration, beyond a dollars-and-cents assessment. Even though programs like child care pay for themselves, that's not the only reason to favor them - to *demand* them. 32/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) April 4, 2023

Child care creates "an America in which everyone has opportunities - and 'everyone' includes mamas." Child care is "an investment in care workers, treating them with respect for the hard work they do." 33/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) April 4, 2023

The CBO's assassination of universal child care is exceptional only because it was a public knifing. 34/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) April 4, 2023

As @ddayen and @rakeen_mabud wrote in their piece yesterday, nearly all of the CBO's dirty work is done in the dark, *before* a policy is floated to the public:https://t.co/srt7qWeAFg 35/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) April 4, 2023

The entire constellation of political possibility has been blotted out by the CBO, so that when we gaze up at the sky, we can only see a few sickly stars - weak economic nudges like pricing pollution, and not the glittering possibilities of *banning* it. 36/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) April 4, 2023

We see the faint hope of "bending the cost-curve" on health care, and not the fierce light of simply *providing care*. 37/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) April 4, 2023

We can do politics. We have done it before. Every park and every highway, our libraries and our schools, our ports and our public universities - these were created by people no smarter than us. 38/

— Cory Doctorow (@pluralistic@mamot.fr) (@doctorow) April 4, 2023