Debt Bomb: The app

Kyle Smith is the developer of the Debt Bomb application for mobile devices. The Daily Caller published a brief item on the app last week. We have gone straight to the developer for the story. Kyle Smith writes:

In the late winter and early spring of 2011, there was a lot of media coverage regarding the national deficits and debt. Americans understand that these amount to staggeringly large numbers, yet it is still difficult to comprehend exactly how the magnitude of this problem could affect one’s pocketbook. This is one reason why it has been easy for politicians to make promises that postpone costs into the future – the debt’s meaning is still relatively abstract to most. Many Americans are unsure whether the debt could truly affect them and have been sold on the false notion that America can just raise taxes on the wealthy and make relatively modest spending cuts to fix the issue.

As I followed the news, I realized there needed to be a way at least to provide an estimate of how expensive it might be on an individual level if Washington were to force the American people to pay for the full cost of its spending through higher taxes. An iPhone app seemed to be an ideal medium. It is a great interactive way to reach young, tech-savvy Americans who have a significant stake in how our fiscal problems will be resolved, especially as the current political climate favors avoiding making tough long-term budgetary choices, forcing younger generations to bear the brunt of poor fiscal decisions. As a result, I embarked on what turned out to be a yearlong project to model the tax code and make these large numbers more digestible.

The end result is Debt Bomb (as of now for iPhone, iPod Touch, and iPad), released in time for Tax Day. Debt Bomb informs users how our fiscal problems could affect households like theirs if America were to raise tax rates proportionally in order to cover the deficits and debt.

I would have liked to submit Debt Bomb as an entry to the Power Line Prize competition, but alas, it was not ready by then. I hope Power Line readers who followed the Prize competition will download Debt Bomb from the App Store. Debt Bomb meets the goal John laid out last May when he announced the Prize: “That leaves the critical one-third, many of them young, who for whatever reason do not yet understand the threat that federal spending and debt pose to them and to the country. Data have been collected; charts and graphs have been prepared; op-eds have been written. But many millions of Americans have not yet been reached or persuaded by these sober economic analyses. We need a marketing campaign: a sustained effort to use the tools of modern communication to reach and educate every American, and to mobilize popular opinion to demand reform from the politicians in Washington.”

Now, a little bit about the nuts and bolts of the app: Debt Bomb begins with the options to (a) learn more about the origins of America’s long-term fiscal problems, and (b) input information in order to project taxes for a household. If the user chooses the latter option, the user encounters a screen where he or she can easily build a profile of a household for the next 10 years. This “Build a Future” screen allows him or her to input basic information about the household, such as income, state of residence, marital status, and number of children. The user can then project the additional taxes that household would have to pay if America were to avoid spending cuts and pay for its spending in full through tax increases. Tapping a bar on this graph pulls up a detailed breakdown of the annual taxes that household would pay under three different tax scenarios versus the household’s income.

At the heart of app is a model of the tax code, which includes major components such as the Alternative Minimum Tax and the Earned Income Tax Credit. The app also includes a model of Americans’ income profiles, which is based upon publicly available data, so as to simplify the user input process to a few basic household characteristics. Very few people want to fill out their taxes on an iPhone, so Debt Bomb simulates this information for them.

Debt Bomb relies on static projections, which assume that people do not change their behavior in response to higher tax rates. A dynamic model is a bit more complex and would produce even higher tax rates, as it would account for effects such as changes in tax filing behavior and people working less in response to higher taxes. However, the static projections should be fairly adequate for most users because they initially enter the income a household expects to make and then see what the government would need to take from that in order to cover promised spending. Adding an advanced feature to account for dynamic effects is likely to come in an update to the app.

Finally, Debt Bomb allows users to take action on the issue by contacting their elected representatives directly from the app and emailing and tweeting the information to others.

Kyle adds this footnote regarding the Debt Bomb app logo: “I was fortunate to have a friend of mine from Princeton, Sean Rubin, work with me to design it. He’s really going places — his graphic novel Bolivar was just recently picked up by Warner Brothers to be turned into an animated movie.”