Comment Text:
I respectfully submit this comment in my personal capacity as someone who studies U.S. economic statistics and policy.
In 2025 and 2026, I drew on that study to participate in prediction markets. The federal government had considerable political momentum behind spending cuts, but directed that energy at the discretionary budget and at workforce reductions, leaving the much larger mandatory categories — Social Security, Medicare, and interest — untouched. I reasoned that total federal spending would continue to rise on the strength of those mandatory categories despite the visible push for discretionary cuts. I took a sizeable position on a regulated prediction market accordingly, and earned a profit when official data confirmed the thesis.
I would offer a few observations.
First, the prediction market produced an accurate signal that was frequently absent from headlines and public statements. Throughout 2026, prices favored the conclusion that spending would rise — as it ultimately did — even when media commentary often suggested otherwise.
Second, that accuracy was not coincidental. The market's structure rewards participants for being right and penalizes them for being wrong, which creates a direct financial incentive to gather information carefully and report it honestly through one's trades. Few other forums for political and fiscal forecasting impose any such discipline. The resolution criteria in prediction markets were clear — indeed, far clearer than they might be in the press.
Third, the subject matter is one where better public information has real value. The trajectory of federal spending bears on economic and business forecasts. A venue that aggregates dispersed expertise into a continuously updated price improves the quality of that public conversation.
For these reasons, I believe event contracts on questions of significance are a worthwhile asset class, best regulated for safety and integrity at the federal level through nationwide standards.
Alan Cole
Washington, D.C.
