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Tuesday, November 16, 2010

Budget simulations

A bunch of econ blogs have been talking about an interactive graphic puzzle on the New York Times website where you can 'fix the budget' by choosing which programs to cut and which taxes to raise. The options include some of the most recent policy proposals (and some that are totally outside the realm of political possibility). One thing that is cool about the list, particularly for those less familiar with these policies, is that you can easily see the relative contribution of each policy to the deficit.

I just wanted to make sure econ teachers are aware of two other budget simulations, both of which are updated regularly so are likely more useful for teachers than the NYT site (though at the moment, neither is quite as timely as the NYT policy options). My favorite is Budget Hero from American Public Media, partly because the graphics are fun :-) but also because it starts out by asking you to specifically decide on general policy priorities before you get into spending and tax decisions. You select three 'badges' (e.g., safety net, national security, environment, etc.) and then as you make specific spending and tax decisions, the simulation keeps track of how well you are meeting those priorities. When I have my students do this, we discuss how their specific budget decisions line up (or don't) with their stated priorities; students often decide that they are willing to make trade-offs they would not have otherwise thought to make, once they find out the specific dollar amounts attached to their priorities.

Budget Explorer starts out by having you estimate how much of the budget is spent on various categories, a good exercise for students who likely have no clue how much of the budget is devoted to, say, the military versus interest on the debt. Then you can change the budget by increasing/decreasing spending for specific departments and agencies (for example, Social Security Administration), and increasing/decreasing revenues from different types of taxes (i.e., income, social insurance, excise, etc.). Similar to the NYT graphic, you can see at a glance the relative contribution of various factors to the budget; however, while it is interesting to see the complete list of governmental agencies, there is no detail about them (clicking on the agency name takes you to the agency website), and you don't have to make choices about HOW to reduce spending or increase taxes.

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