Working Paper: NBER ID: w8500
Authors: David F. Bradford
Abstract: In the context of several examples of problems associated with present budgetary conventions, I revisit Musgrave's conceptual division of the government's program into Allocation, Distribution and Stabilization Branch subbudgets. I suggest progress towards Musgrave's ideal of a more informative budgetary 'language,' one less dependent on arbitrary institutional labeling, must be based on the nonarbitrary description of the individual's economic environment, as it is affected by government. As a first approximation, that environment can be summed up in terms of the individual's budget constraint and levels of public goods provided. Simple models suggest that an unambiguous budgetary language may be feasible but there remains much to clarify about both the objectives of the exercise and the specifics of methods to deal with particular problems.
Keywords: No keywords provided
JEL Codes: H11; H20; H61
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| improved budgetary language (H61) | enhanced economic policy outcomes (D78) |
| current budgetary language (H61) | confusion and misinterpretation in fiscal policy discussions (E62) |
| lack of clarity in budgetary language (H72) | poor decision-making regarding intergenerational equity (D15) |
| better budgetary language (H61) | address intergenerational distributional problems more effectively (D39) |
| classification of spending cuts and tax increases (E62) | misleading and uninformative (Y90) |
| taxing social security benefits (H55) | seen as both a spending cut and a tax increase (H29) |