I haven't had time to get very granular on the pending US tax reform bill, but during the debates and drafting process, I was hearing some pretty big numbers being thrown around in terms of growth.
(It's surprising to me that personally the people with finance backgrounds would be proposing policy based on optimistic projections, as research, and investment experience, seems to validate pessimism as the only optimal strategy in conditions of uncertainty.)
- Was wondering if anyone knows what model was used to at the $1.5 trillion deficit increase?
- Is the possibility of recession accounted for in the figures?
I'd be happy for information on the general structure of 10-year projections, because that's an awful long time, and there are a great number of factors at play.
The question related to recession arises from noticing that states which must balance their budgets get blindsided by economic downturns and end up with huge budget shortfalls. Sharp increases in deficits seem to be another effect of unaccounted-for downturns. I think this is particularly relevant in that we've had severe crashes at fairly regular intervals—three in my lifetime alone.
Because I'm pre-occupied with stability strategies for chaotic systems, I'm trying to learn more about the types of models that drive policy in relation to real-world chaotic systems.