Pinned Tweet
🚨NEW RESULTS (w/ @cailin_slattery & @WNober)
- When gov't engineers retire, highway projects cost more: the engineers pay for themselves 6 times over
- Improving gov’t engineer quality from the 25th to 75th percentile reduces costs by 14%, equal to 3x avg. engineer pay
- When gov't engineers retire, highway projects cost more: the engineers pay for themselves 6 times over
- Improving gov’t engineer quality from the 25th to 75th percentile reduces costs by 14%, equal to 3x avg. engineer pay
14
163
781
250,788
Zachary Liscow retweeted
If you're curious why a piece like this is important to write, think about the fact that the debate over permitting reform in the Dem party has devolved into a very narrow argument over emission reductions (imo clean will win). And largely ignored the fact that this will have mic growth and hold down energy prices — which is both A) what voters care about and B) very good for low-income households.
So much discourse spurred by @ZLiscow's piece in @TheArgumentMag that we decided to unpaywall it.
cc: @MarcGoldwein @jasonfurman @Brendan_Duke @JessicaBRiedl
theargumentmag.com/p/how-to-beat-…
2
18
111
17,154
Zachary Liscow retweeted
Re: Growth and fiscal policy.
I agree with all my favorite budget nerds that it is foolish to count on growth to solve America’s fiscal problems.
But from where I sit, a lot of institutional progressives underrate economic growth. When Democrats debate BAAJA they are largely weighing emissions goals vs conservation goals and not talking about growth impacts. The Hewlett Foundation’s economy and society program adopted grantmaking strategy on the explicit premise that policymakers had been overrating economic growth. Immigration gets discussed largely as a humanitarian issue without consideration of growth impacts. Even my beloved YIMBY movement operates largely within a “is it good for low-end affordability” social justice paradigm.
Relative to that status quo, I think it would be good for progressive institutions to be more cognizant of the fact that incremental improvements in economic growth have progressive implications because they make the existing safety net more sustainable and somewhat ameliorate the need to dedicate all new marginal revenue to sustaining existing programs.
This is not an alternative to being serious about first-order fiscal issues, but I do think it is an underrated lens on a wide range of regulatory questions.
I agree with all my favorite budget nerds that it is foolish to count on growth to solve America’s fiscal problems.
But from where I sit, a lot of institutional progressives underrate economic growth. When Democrats debate BAAJA they are largely weighing emissions goals vs conservation goals and not talking about growth impacts. The Hewlett Foundation’s economy and society program adopted grantmaking strategy on the explicit premise that policymakers had been overrating economic growth. Immigration gets discussed largely as a humanitarian issue without consideration of growth impacts. Even my beloved YIMBY movement operates largely within a “is it good for low-end affordability” social justice paradigm.
Relative to that status quo, I think it would be good for progressive institutions to be more cognizant of the fact that incremental improvements in economic growth have progressive implications because they make the existing safety net more sustainable and somewhat ameliorate the need to dedicate all new marginal revenue to sustaining existing programs.
This is not an alternative to being serious about first-order fiscal issues, but I do think it is an underrated lens on a wide range of regulatory questions.
16
24
338
31,743
Zachary Liscow retweeted
@ZLiscow @The_Budget_Lab In general, I think the fiscal impacts of the non-fiscal policies (like high-skilled immigration) are more clearly beneficial because they don't require the second-order positive impact on the economy to be larger than the first-order impact of spending more or taxing less.
0
2
10
596
Zachary Liscow retweeted
@ZLiscowng is also an important piece when thinking about fiscal payoffs from spending--CBO finds that expanding health coverage for low-income kids pays for itself fiscally when it comes from cuts to other types of spending, not from borrowing. @The_Budget_Lab finds similar for childcareith tax increases, you also need to consider the economic effects of the tax increase if you're also considering the economic effects of the spending.
Of course, the main benefits of providing health care and child care to families aren't the fiscal benefit--it makes their lives better so I think they're worth doing even when they don't pay for themselves)
Of course, the main benefits of providing health care and child care to families aren't the fiscal benefit--it makes their lives better so I think they're worth doing even when they don't pay for themselves)
2
2
5
637
Zachary Liscow retweeted
@ZLiscow Second, there can be important fiscal dividends from investing in low-income kids.
This shouldn't be interpreted broadly as expanding health care coverage for everyone or the portion of a Child Tax Credit increase going to families w/ six figure incomes pay for themselves.
This shouldn't be interpreted broadly as expanding health care coverage for everyone or the portion of a Child Tax Credit increase going to families w/ six figure incomes pay for themselves.
1
1
7
596
Zachary Liscow retweeted
First, there's a coherent case for retaining expensing as @ZLiscow recommends to tax supernormal profits.
But he's calling for doing this w/ a higher corporate rate than 25%. I'm VERY much for that kind of rate but a lot of companies won't be. The rate increase is important!
But he's calling for doing this w/ a higher corporate rate than 25%. I'm VERY much for that kind of rate but a lot of companies won't be. The rate increase is important!
4
1
8
758
Zachary Liscow retweeted
I understand why this stepped on a landmine, between the title, the deficit environment, and the core substance being initially paywalled,
but @ZLiscow is one of the smartest out there and it's worth taking a minute to engage with what's it's actually arguing now that it's open.
but @ZLiscow is one of the smartest out there and it's worth taking a minute to engage with what's it's actually arguing now that it's open.
So much discourse spurred by @ZLiscow's piece in @TheArgumentMag that we decided to unpaywall it.
cc: @MarcGoldwein @jasonfurman @Brendan_Duke @JessicaBRiedl
theargumentmag.com/p/how-to-beat-…
1
3
26
4,312
All good points from @Brendan_Duke 👇
There's a lot I agree with in @ZLiscow's piece--I mostly worry that elected Democrats will not read it carefully enough and try to use "growth" as hopium to avoid raising the taxes necessary to pay for their agenda.
So let me put in emphasis for a few areas 🧵
1
1
4
969
Zachary Liscow retweeted
(By the way my read of @ZLiscow is that this is all entirely consistent with his argument, but he should correct me if not!) theargumentmag.com/p/how-to-beat-…
0
1
4
1,401
Agreed w/ Ernie & Jason. There's no evidence that growth alone will stabilize debt-to-GDP, but it can help. Who knows what will happen with AI, and/or maybe we'll find very pro-growth policies, but it's very unlikely these will do the job, & we definitely shouldn't count on it.
Would add: proactive growth policy is a valid & often-desirable way to make fiscal challenges easier. Growth won't stabilize debt-to-GDP by itself, but it is one of several tools.
What we should *not* bank on in fiscal forecasting is a huge exogenous growth surprise, e.g. from AI
0
5
20
6,421
Zachary Liscow retweeted
So much discourse spurred by @ZLiscow's piece in @TheArgumentMag that we decided to unpaywall it.
cc: @MarcGoldwein @jasonfurman @Brendan_Duke @JessicaBRiedl
theargumentmag.com/p/how-to-beat-…
cc: @MarcGoldwein @jasonfurman @Brendan_Duke @JessicaBRiedl
theargumentmag.com/p/how-to-beat-…
2
10
67
28,796
Now unpaywalled
So much discourse spurred by @ZLiscow's piece in @TheArgumentMag that we decided to unpaywall it.
cc: @MarcGoldwein @jasonfurman @Brendan_Duke @JessicaBRiedl
theargumentmag.com/p/how-to-beat-…
0
3
13
845
Zachary Liscow retweeted
Would add: proactive growth policy is a valid & often-desirable way to make fiscal challenges easier. Growth won't stabilize debt-to-GDP by itself, but it is one of several tools.
What we should *not* bank on in fiscal forecasting is a huge exogenous growth surprise, e.g. from AI
What we should *not* bank on in fiscal forecasting is a huge exogenous growth surprise, e.g. from AI
My thought on the role of growth in solving fiscal problems:
1. I'm in favor of dynamic scoring for both tax & spending plans--you should take into account the best estimate of impact on budget.
2. Dynamic scoring needs to be done by CBO/JCT, they're generally unbiased and reasonably efficient. As a result they often disappoint advocates.
3. Ideally CBO would also display other information than just growth, the sole goal of every policy is not necessarily growth, it might also be about providing health insurance or increasing national security.
4. Dynamic scoring will usually be small relative to the first order effects of policies on spending and taxes.
5. I wouldn't overthink the second-order political incentives and impacts, if you have good information you'll generally (but not always) have better policy.
6
4
38
10,517
Zachary Liscow retweeted
My thought on the role of growth in solving fiscal problems:
1. I'm in favor of dynamic scoring for both tax & spending plans--you should take into account the best estimate of impact on budget.
2. Dynamic scoring needs to be done by CBO/JCT, they're generally unbiased and reasonably efficient. As a result they often disappoint advocates.
3. Ideally CBO would also display other information than just growth, the sole goal of every policy is not necessarily growth, it might also be about providing health insurance or increasing national security.
4. Dynamic scoring will usually be small relative to the first order effects of policies on spending and taxes.
5. I wouldn't overthink the second-order political incentives and impacts, if you have good information you'll generally (but not always) have better policy.
1. I'm in favor of dynamic scoring for both tax & spending plans--you should take into account the best estimate of impact on budget.
2. Dynamic scoring needs to be done by CBO/JCT, they're generally unbiased and reasonably efficient. As a result they often disappoint advocates.
3. Ideally CBO would also display other information than just growth, the sole goal of every policy is not necessarily growth, it might also be about providing health insurance or increasing national security.
4. Dynamic scoring will usually be small relative to the first order effects of policies on spending and taxes.
5. I wouldn't overthink the second-order political incentives and impacts, if you have good information you'll generally (but not always) have better policy.
11
16
167
43,024
Zachary Liscow retweeted
This was motivated by the debate between @MarcGoldwein @ZLiscow @mattyglesias yesterday. x.com/MarcGoldwein/s…
This seems mostly like the “tax cuts pay for themselves and fix the debt” of the left.
Economic growth is incredibly important — both for our fiscal future and for standards of living ordinary Americans. We should do what we can to boost growth.
But it’s extraordinarily unlikely we’re gonna grow away out of our debt. And we’re certainly not gonna spend our way to enough growth to grow away out of our debt.
This kind of wishful thinking is just gonna delay the hard choices and make them even harder.
1
2
12
6,430
There is nothing in my piece that could be remotely construed as "Economic growth will fix the deficit." I explicitly say that it will not. There is something lazy here, but it's not the thinking in my piece.
Here's the (un-gated) underlying paper: papers.ssrn.com/sol3/papers.cf…
Here's the (un-gated) underlying paper: papers.ssrn.com/sol3/papers.cf…
Yes - "Economic growth will fix the deficit" is the lazy wishful thinking that blocks us from seriously addressing the deficit.
Even with perfect economic policy - and we're miles from there - the budget math simply does not work.
1
7
58
4,281
My goodness, that is not what my piece says. Here's the underlying paper (which is not gated): papers.ssrn.com/sol3/papers.cf….
This seems mostly like the “tax cuts pay for themselves and fix the debt” of the left.
Economic growth is incredibly important — both for our fiscal future and for standards of living ordinary Americans. We should do what we can to boost growth.
But it’s extraordinarily unlikely we’re gonna grow away out of our debt. And we’re certainly not gonna spend our way to enough growth to grow away out of our debt.
This kind of wishful thinking is just gonna delay the hard choices and make them even harder.
5
2
23
2,412
Zachary Liscow retweeted
@MarcGoldwein I don’t think that’s a very fair read of @ZLiscow’s argument
1
4
72
4,768
Me in @TheArgumentMag: let's encourage economic growth, to reduce the need for painful spending cuts and tax hikes in the face of high deficits
1
2
16
3,067
Zachary Liscow retweeted
There are many thoughtful critiques of this line of work. This is not one of them. Sad to see @MargRev engage in this. Only upside is that the post clearly illustrates the need to have humans in the loop in social science...at least for now :)
Errors in the research of Emmanuel Saez and Gabriel Zucman marginalrevolution.com/marginalrevolu…
9
26
251
13,838