|Read pp. 95-111 !
I realize the topic seems dry, but all I can say is give it a shot, and you'll likely find it thought-provoking, and perhaps even entertaining. After putting together example after example of bogus "free lunch" accounting, even I was surprised at the extent of the government's malfeasance. And although most people realize that political advocates are not intellectually consistent, their flip-flopping on fair-value is one of the starkest (yet largely unrecognized) hypocrisies in all of Washington, DC.
Jason D. has a two-minute summary of the piece on New America's EdCentral site, and I'll update this post as we put out additional promotional material.
National Review has posted my own preview of the article, this one focusing on the "Understated Costs and Perverse Incentives" section.
Also, in an interesting development, the Center on Budget and Policy Priorities now opposes applying FVA to Social Security in response to our article:
Jason Delisle and Jason Richwine, writing in the latest issue of National Affairs, correctly note that the logic of our argument [against FVA] is inconsistent with a 2005 CBPP analysis of proposals to invest part of the Social Security trust funds in stocks instead of Treasury bonds. We concur. We have re-analyzed our assessment of investing a portion of the Social Security trust fund in equities and now come to a different conclusion than we did in 2005.To understand what that all means, see the section of our article titled "Fair-Value's Fair-Weather Friends." More on this later.
Mentions of the National Affairs article by the Washington Post's Wonkblog, RealClearPolicy, Committee for a Responsible Federal Budget, and Arnold Kling.
Andrew Biggs criticizes the free-lunch Social Security accounting now espoused by CBPP.
I preview the "Fair-Value's Fair-Weather Friends" section for National Review.