Complaints about the CBO

The CBO has a specific accounting job which is: Assume price neutrality and project the next three quarters based on the current law. It has no other solution then to project higher interest rates, it is a built in.

We know where mainstream economics predict the ten year rate, it will go unbearable close to zero, we have to suffer a long period of deflation.  Now it is perfectly reasonable to do a long period of a half point deflation. But we won't meet Euler, and we have to expense losses more often and negotiate new prices more frequently.  We cannot be Krugman's government insurance company.

The dollar banks cannot collect a value added tax. They lose market share and central banks are in a fix, they go full Japan. That value added tax are unattributable, built in losses. The uncorrectable imbalances from our particular Law. It is somewhere between a half point and one and a half point.

From the CBO perspective, the future effects of current law are only know to about 2/3. 1/3 is hedgeable unknowns, and one third of that is lost. A tenth of the budget cannot be recovered. But even that may produce unknown taxes. Modify by the size of governments, and it is less than two percent of GDP.  

The idea is to make those random shortages liquid. Agree they exist. Why no have the Feds carry a tax surplus and make that available for revenue sharing? Because it is no more the fault of the Swamp then any other government  level.  It is why the Law reserves the power to coin, it comes with the power to tax.

The value added tax is correct, the Treasury can collect it with double spending. The tax maybe efficient, yielding productive, unexpected results, or maybe not. But it is paid with direct inflation, impacting government payments. The loss is due to government markets being illiquid, unable to respond to external productivity shocks. The more often we open government markets the smaller that loss. Hence revenue sharing, or otherwise make earmarks into cash grants.  

Revenue sharing is a regular market event that splits government loss reserves over the whole government chain. Thus the Treasury double spending is  fairly costed across all budget as best judged by the revenue sharing pact.  The budget tendency is to more frequently price the various programs, keep them in aggregate balance so the revenue sharing is expansive. Swamp legislatures always wanting to drive government multipliers to just above one so they get more cash back home.