| |
A century ago, everyone thought time and distance were well defined
physical concepts. But neither proved absolute. Instead, measures/ reports
of time and distance were found to depend on one’s reference point,
specifically one’s direction and speed of travel, making our apparent
physical reality, in Einstein’s words, “merely an illusion.”
Like time and distance, standard fiscal measures, including deficits, taxes,
and transfer payments, depend on one’s reference point/reporting
procedure/language/labels. As such, they too represent numbers in search of
concepts that provide the illusion of meaning where none exists.This paper, dedicated to our dear friend, David Bradford, provides a
general proof that standard and routinely used fiscal measures, including
the deficit, taxes, and transfer payments, are economically ill-defined.
Instead these measures reflect the arbitrary labeling of underlying fiscal
conditions. Analyses based on these and derivative measures, such as
disposable income, private assets, and personal saving, represent exercises
in linguistics, not economics.
|
