Getting the Score Right on Dynamic Scoring

Matt O'Brien had a good discussion in Wonkblog of dynamic scoring of budget proposals, the holy grail of conservatives everywhere. The idea of dynamic scoring is that people respond to changes in incentives. This means that lower tax rates can lead to more growth and therefore more tax revenue to offset the cost of tax cuts.

O'Brien's point is that this effect is real, but nowhere near as large as many conservatives like to claim. For example, it doesn't mean that tax cuts will pay for themse...