Calculating the Cost of New Legislation

Posted on 07. Aug, 2006 by in Economy, Taxes

washingtonwatch.jpgAs I’ve mentioned before here, I’m a big fan of politics and have thought about the possibility of pursuing some sort of political “career” later in life – but for now, politics is aggravating and creates nothing but stress for me. Why? Because I can’t seem to see how some of the latest bills being passed by congress are justified in the eyes of my elected officials. Not convinced that my anger is justified? Just check out WashingtonWatch.com to see what I’m talking about.

WashingtonWatch.com simply and clearly delivers the numbers behind proposed legislation and regulation. And as they state on their site, “It is important to understand where these numbers come from and what they mean.” So how do they calculate that the new Growing Real Ownership for Workers (GROW) Act will cost the average American $2,533.26? Net Present Value of course!

WashingtonWatch.com starts with government predictions about the costs or savings from proposed changes to government spending, taxation, and regulation. They take these predictions and calculate their “net present value.” (The value today of changes to future spending, taxes, or regulation.) Then, WashingtonWatch divides 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.

So if you hear about a proposed bill from Congress and want to find out about it’s economic impact on you – in today’s terms – give WashingtonWatch a look. That said, I should point out that you should check multiple sources for more information about any proposed legislation. As we all know, even the bi-partisan groups on Capitol Hill seem lean one direction or the other on certain issues. So be sure to check facts from multiple sources before coming to your own conclusion.

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