Bad framing of fiscal policy contributes to a poor allocation of money collected and spent. Almost all real growth in government goes automatically to health, retirement and tax subsidies, while spending on children, the work force, and infrastructure are scheduled for decline as a share of national income. Reframing budget information to show all changes in spending and taxes occurring over time, in inflation-adjusted terms, can improve policymakers’ understanding of budget choices at strategic moments in the budget process.
This chapter appears in Fixing Fiscal Myopia: Why and How We Should Emphasize the Long Term in Federal Budgeting. The full volume is available from the Bipartisan Policy Center at http://bipartisanpolicy.org/library/fixing-fiscal-myopia/.