State budget & assumptions
By Al Johnson
February 11, 2016
In a recent Anchorage Daily News Blog, the commentary of a person, Ms. Holly Bell, who purports to have a respectable background in finance offers in so many words the thought that was submitted:
Quote from Ms Bell's Commentary: "Occam's razor is a problem-solving principle that says when you have competing hypotheses, you should select the one with the fewest assumptions. Budgets are the state s hypotheses of what the fiscal situation will look like over the next year and beyond. In every case, the budget proposals I have seen are based on copious assumptions about future states of numerous variables, two of which I will discuss here. When a budget proposal begins making assumptions about variables a decade or more into the future, it stops being reality and moves into the realm of fantasy. Making assumptions about how we hope the future will be without considering actual facts is irresponsible at best. We need a solution with fewer and more rational assumptions."
Perhaps Senator Stedman and Rep. Ortiz will find some direction within the Ms Bell's commentary that will allow prudent fiscal decisions to be made during deliberations.
One can only hope.
Note: Holly A. Bell is an associate professor at the University of Alaska Anchorage’s Mat-Su College in Palmer, where she teaches courses in business, finance and economics. She is also a contributing scholar with the CATO Institute and the Mercatus Center, both in Washington, D.C.
Received February 10, 2016 - Published February 11, 2016
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