by David M. Primo
Mercatus Center
March 12, 2014
The same budget data can yield different conclusions about the condition and course of the federal budget—depending on the way the data are presented. A model using absolute dollar figures will show a dramatic increase in spending over several decades. Adjusting the same figures for inflation, however, allows for more accurate comparisons over time. Budget presentations may also vary depending on the starting point used for measuring budgetary changes, known as the “baseline.” Any model can create confusion about what constitutes an “increase” or a “cut” in spending; it depends on the baseline. The fiscal year 2014 Obama budget can be presented in different ways. Thus, its spending may be seen as either increasing or decreasing. Analyses can be misused if their underlying assumptions are hidden, or if their nuances are unexplained. Also, because the president’s budget shows only 10 years of spending, it fails to reflect long-term implications.

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