Better Bill Scoring
Megan McArdle says med reform will pass, via bills exploiting CBO budget scoring errors:
I now put the chances of a substantial health care bill passing at 75%, and the chances of the Democrats losing the house in 2010 at about 66%. … The real game changer is that the CBO is willing to score health care savings on the grounds that the bill contains automatic spending cuts.
Conservatives are filled with rage and anguish. … They are absolutely right: the savings cuts will not be made, and I doubt that many in the Democratic party leadership, or the liberal wonkosphere believe that they will. … The fact that the CBO has minimal discretion and uses roughly the same standards for every analysis is, despite its problems, a feature rather than a bug. We may not like the fact that the CBO scores what’s in the law, rather than what is most likely to happen. But the alternative is what? An agency that can give the thumbs up or thumbs down according to how it feels about the legislators? …
This will make it very hard to keep the bill from passing, because legislators are, natch, more concerned about the appearance of fiscal rectitude than actual conservative budgeting. … The public is probably going to accept the CBO numbers.
The alternative is prediction markets. Compared to the value of making good decisions on these bills, or to the effort spent in “rage and anguish” on them, the cost to create prediction markets giving quality unbiased estimates of actual bill budgets would be small.
So why don’t now-loudly-wailing conservatives direct some of their energy to creating and promoting bill-scoring prediction markets? Because they expect better bill budget estimates to make their positions look worse as often as better. Sure, better estimates would help conservatives in this particular case, but they aren’t fool enough to think liberals lie about budgets more often than conservatives.
But aren’t there substantial organized political groups dedicated to uncovering and promoting the best policies, no matter whose ox they gore? Apparently not.
But aren’t there substantial organized political groups dedicated to uncovering and promoting the best policies, no matter whose ox they gore? Apparently not.
Just thought of these people (admittedly in the UK):
http://www.instituteforgove...
I gather they have been working with the Conservatives and their Chairman was a Labour minister, which in the UK would suggest they are about as non-partisan as you could reasonably expect.
Well, companies certainly spend millions on lobbying, and influencing budgetary prediction markets could have a pretty high ROI if the prediction markets are small.
I don't know how big you think these prediction markets will be... my single data point is that a few hundred thousand dollars was enough to boost McCain's chance of winning the presidency by 10% on Intrade (see link), which makes me think they'd be pretty small.
http://bit.ly/RLtAe
So I'd think of it as lobbying spend, not speculation.
Brings up another interesting question - what would happen if the legislation in question never passed? If contracts were simply canceled, the cost to lobbying companies in that case would only be their cost of capital.