WashingtonWatch.com delivers the numbers behind proposed legislation and regulation. It is important to understand where these numbers come from and what they mean.

WashingtonWatch.com starts with predictions about the costs or savings from proposed changes to government spending, taxation, and regulation. We take these predictions and calculate their “net present value.” That is the value today of changes to future spending, taxes, or regulation.

Then, we divide that “net present value” calculation by the total number of people in the United States. The resulting figures convey the significance to average Americans — in dollars and cents — of proposed changes to the nation's policies.

WashingtonWatch.com takes the perspective of individual citizens: An increased tax is treated as a “cost” because it takes money from people and businesses. Government spending also “costs” money because it moves money out of the public treasury we all own. “Savings” occur when spending cuts keep money in the public treasury and tax cuts return money to the public.

The figures on WashingtonWatch.com reveal the relative size and significance of proposals, but they are not perfect predictions and they do not tell you everything you should know. Please keep in mind that:

  • Future spending, taxes, and regulatory costs are very difficult to estimate, even for government experts. Most estimates also cover only a limited number of years.
  • The "Cost/Savings" figure reflects the aggregate of revenues and spending in the bill --- a measure of its effect on the size and activity of the government. The effect the bill will have on the national debt is produced by comparing the amount of spending and revenue in the bill. A bill with more spending than revenue will increase the national debt. A bill with more revenue than spending will decrease it.
  • WashingtonWatch.com does not report the many benefits that may be provided by government regulation and spending, made possible by taxation. Proposals that “cost” the average American may benefit you, your community, your loved ones, or your employer.
  • The dollar amounts on WashingtonWatch.com do not reflect the “incidence” of taxes, spending, or regulation. A tax cut that would save money for the average American, for example, may reduce taxes on only a specific industry or people with a specific level of income.
  • WashingtonWatch.com does not report the budgetary consequences of legislation. A proposal that “saves” money may drive the national debt higher because it reduces taxes without reducing spending. One that “costs” may reduce the national debt because it includes more taxes than spending.
  • Not all items tracked on WashingtonWatch.com will be passed into law, and not all legislation and regulation is tracked on WashingtonWatch.com. Adding up all the proposals tracked by WashingtonWatch.com would produce a number that is essentially meaningless.

In summary, the information on WashingtonWatch.com is not the last word on government spending, taxation, and regulation. Rather, WashingtonWatch.com should be your starting point for investigating what the government does with your money, and for taking action to control it.

WashingtonWatch.com is maintained by Jim Harper, Director of Information Policy Studies at the Cato Institute, in his spare time, as a public service.

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