Blog on the Run: Reloaded

Friday, December 13, 2013 7:08 pm

The New York Times does not understand Social Security

For evidence of this, I offer the following email exchange between me and D.C. bureau reporter Jonathan Weisman. I first wrote him regarding this article, in which he stated as fact:

Some conservatives feel betrayed, as they often have since the Republicans took control of the House in 2011. Representative Jim Jordan, Republican of Ohio, said the House Republican conference agreed in the spring that spending levels exacted by the sequestration cuts would not change unless Congress and the White House could strike an accord to control the long-term causes of the rising costs of the federal debt, Medicare, Medicaid and Social Security.

Leave aside for the moment that the actual biggest drivers of federal deficits, and thus the growing national debt, are, in fact, NOT entitlements:

The key fact on which I wish to focus is that Social Security does not contribute to the federal deficit AT ALL. This is a simple and widely understood fact with which the reporter took tendentious issue before throwing in the towel, as shown:

On Thu, Dec 12, 2013 at 2:26 PM, <ordercs@nytimes.com> wrote:

Email: lex.alexander@gmail.com
URL:Your budget-deal story
Comments:Jon, how many times does it have to be said before it sinks into the heads of reporters for the Times Almighty? SOCIAL SECURITY DOES NOT CONTRIBUTE TO THE DEFICIT. It is funded by contributions that, since 1983, have been accumulating a large surplus to be used to pay retirement benefits to the Baby Boomers. Now that Baby Boomers have begun to retire, that surplus, which peaked at around $3 trillion, is being drawn down … just as planned in 1983. There is enough of a surplus that SocSec can pay 100% of expected benefit demands until the mid-2030s and, with continuing FICA withholding revenue, about 80% of benefit demands pretty much forever after that even if we do nothing at all to Social Security. And with small changes (raising the cap on income subject to FICA withholding), we could have SocSec paying 100% of benefits pretty much forever.

Once again: Social Security does not contribute in any way, shape or form to the government’s operating budget deficit. And this isn’t just a matter of opinion, this is an error of fact so egregious that it demands a published correction. My next stop is the public editor, for that very purpose.

Best,
Lex Alexander
Greensboro, NC
www.lexalexander.net

On Thu, Dec 12, 2013 at 2:35 PM, Weisman, Jonathan <jonathan.weisman@nytimes.com> wrote:

You are simply wrong here. Since 2010, Social Security has been operating in deficit since 2010. As the annual trustees report said, Social Security’s “cash-flow deficit will average $75 billion between 2013 and 2018 before rising steeply” http://www.ssa.gov/oact/trsum/

It is true that the system is now cashing bonds it has been given by other parts of the government that have “borrowed” from its surplus over decades. But the fact is, every bond cashed must be paid in cash by the U.S. government and the taxpayers. Social Security as a system is not in debt yet. It is redeeming what is owed it. But those redemptions ARE driving the the debt upward, along with Medicare, Medicaid and other programs impacted by the aging baby boom.

On Thu, Dec 12, 2013 at 2:56 PM, Lex Alexander <lex.alexander@gmail.com> wrote:

OK, fine, if you’re not going to believe me, how ’bout walking down the hall or picking up the phone and talking about it with your colleague Paul Krugman, OK? Or, hell, economist Dean Baker at the Center for Economic and Policy Research, or Brad DeLong at Berkeley, or … pretty much any half-sentient economist not on a corporate payroll. Will you do that for me? Please?

Best,
Lex
On Thu, Dec 12, 2013 at 3:01 PM, Weisman, Jonathan <jonathan.weisman@nytimes.com> wrote:

I am aware of their position on this. They are saying Social Security is solvent because it has trillions of dollars in bonds that are real and owed to it. That is true and it is a valid position. But Krugman, DeLong et al also know that as those bonds are redeemed, the cash must come from the Treasury. That is why Larry Summers wanted to wall off the Social Security surplus, to run large surpluses for the day when the bills come due. That did not happen. Now we are paying the piper. What liberal economists would say is it is simply unfair to make Social Security and its recipients pay for the rest of the government’s profligacy (and maybe theft).

Ask them. (Krugman is at Princeton, not in the building)

On Dec 12, 2013, at 4:27 PM, Lex Alexander <lex.alexander@gmail.com> wrote:

Had the government borrowed the money for its deficits from, say, a private bank, would you seriously argue that the private bank is contributing to the deficit? No, you would not; it would be ridiculous. But, in part, that’s exactly what the government did: It borrowed, in the form of U.S. bonds, not only from the Social Security Trust Fund but also from investment banks, commercial banks, institutional investors and individuals. So how is Social Security “contributing to the deficit” when these other bond holders are not? Or are you going to argue that they ALL are “contributing to the deficit”? That argument, though also basically silly, at least would have the benefit of being consistent and contextually complete.

Best,
Lex
On Dec 12, 2013, at 4:30 PM, Jonathan <jonathan.weisman@nytimes.com> wrote:
OK, whatever

Jonathan Weisman

New York Times
* * *
So that’s the kind of intellectual firepower the Times is assigning to the biggest domestic-policy story of the week. Good to know. I’ve emailed the Times’s public editor, for all the good that will do.

Saturday, November 16, 2013 11:24 pm

Deficit hawks caught astroturfing. Color me surprised.

Their ideas aren’t gaining favor on the merits (nor should they) — about 90 percent of Americans think Social Security should be preserved or even expanded, not cut — so they resort to paying people to lie, and they’re real sloppy about it:

Our friend Jon Romano, press secretary for the inside-the-beltway PR campaign “Fix the Debt” and its pet youth group, The Can Kicks Back, have been caught writing op-eds for college students and placing the identical op-eds in papers across the country.

This is the latest slip-up in Fix the Debt’s efforts to portray itself as representing America’s youth. Previously, they were caught paying dancers to participate in a pro-austerity flash mob and paying Change.org to gather online petition signers for them.

The newspapers involved in the scam were not amused.

Gainesville Sun to Fix the Debt: “Lay Off the Astroturf and Outright Plagiarism”

The identical op-eds were discovered by Florida’s Gainesville Sun. The paper’s scathing editorial on the topic makes for an entertaining read.

If you liked University of Florida student Brandon Scott’s column last Sunday about the national debt, you also should enjoy columns by Dartmouth College student Thomas Wang and University of Wisconsin student Jennifer Pavelec on the issue.

After all, they’re the same columns.

The identical columns ran last weekend in newspapers in New Hampshire and Wisconsin. They each included the same first-person passage describing the student’s work with the Campaign to Fix the Debt and its “millennial arm,” The Can Kicks Back.

After I was told last week about the column appearing under the byline of different writers in other publications, it was removed from The Sun’s website. Staff with the Campaign to Fix the Debt, who sent out the columns, said they were templates that were supposed to be personalized or otherwise reworded.

The campaign’s vice president of communications, John Romano, said Scott -— an intern with the group — was not at fault.

“This was an inadvertent mistake and the campaign takes full responsibility for it,” he said.

Ooopsie.

Ooopsie, indeed.

Folks, Fix the Debt is not a grassroots thing. It is not a lot of college kids writing letters to the editor. It is a network of PR agencies led by billionaire Pete Peterson. Peterson, because he is stupid, because he would personally profit, or both, wants draconian spending cuts — along the lines of Simpson-Bowles or worse. There are many problems with that, but the most important one, as the linked article points out, is that such cuts would eliminate 4 million jobs at a time when America needs many more jobs, not fewer. As for the deficit? Well, hey, let’s just ask our good friends at Fox News, who actually provide accurate information this time although they take a little too much time explaining what the numbers mean:

The U.S. government started the first month of the 2014 budget year with a $91.6 billion deficit, signaling further improvement in the nation’s finances at a time when lawmakers are wrestling to reach a deal that would keep the government open past January.

The Treasury Department said Wednesday that the deficit in October fell 24 percent compared with the $120 billion imbalance recorded in October 2012. The deficit is the gap between the government’s tax revenue and spending.

Across-the-board spending cuts and the partial government shutdown helped lowered expenditures in the first month of the new budget year. Higher taxes and an improved economy also boosted revenue.

The October decline comes after the government ran an annual deficit in 2013 of $680 billion, the lowest in five years and the first in that period below $1 trillion. Shrinking deficits could take some pressures off of lawmakers, who are facing a Dec. 13 deal to fund the government and avoid another shutdown.

The deficit is a manageable problem, and we’re managing it — almost in spite of ourselves, what with sequestration, but we’re managing it nonetheless. We do not need dramatic new government spending cuts, unless maybe they’re in defense. (By the way, everything else being equal, a dollar spent on defense benefits the economy substantially less than a dollar spent on something civilianish.) What we need, desperately, is J-O-B-S.

Friday, June 7, 2013 5:01 am

Matt Yglesias gets shrill. And real.

We’ve heard a lot of bullshit these past several years about Social Security, so as an antitoxin, here’s Matt Yglesias:

The Powers That Be hate Social Security and always will because it’s a program whose entire purpose is to pay people money not to work. That’s not a perverse consequence of Social Security. It’s not a contentious partisan claim about Social Security. It’s not a dubious interpretation of what Social Security is all about. That’s the point. It’s to give people money so they can retire with dignity. “Retire” being a fancy word for “not working.” You’re never ever going to persuade business leaders to stop agitating for cuts in a program that has this feature. Business leaders want people to work! At a minimum, if people are hoping to not work, business leaders are going to want people to save (i.e., loan funds to business leaders) in order to achieve that purpose. Taxing people who are working in order to pay money so that people can enjoy retired life in peace is the antithesis of everything business elites want out of public policy.

And guess what we haven’t done during this era of changing projections? We haven’t cut Social Security benefits. We haven’t raised the age at which people become eligible for Medicare. We’ve done things to reduce budget deficits, in other words, but we haven’t really acted to make it tougher for people to retire. But people don’t like to say they want to make it hard for people to retire so instead they talk about “the deficit,” and they’re not going to stop.

The Powers that Be have had their way for way too long. I think it’s time that the rest of America slapped them and told them to shut their whore mouths.

 

Tuesday, February 12, 2013 6:49 pm

What’s at stake in the State of the Union

Filed under: We're so screwed — Lex @ 6:49 pm
Tags: , , ,

Outsourced to Charlie Pierce:

In any event, thanks to Ezra Klein’s invaluable House Of Wonks, we discover that all the howling about The Deficit has obscured the fact that, whatever real problems with the deficit are, they’re actually being slowly solved. This is a good thing to remember since it’s better than 6-5 that almost all the commentary after the president’s speech tonight is going to carry the theme that he didn’t do enough to address The Deficit. Here is something else to remember — given that chart, anyone who still argues for austerity in any form — and this means you, Dancin’ Dave [Gregory, of NBC -- Lex] — is doing so because they want government to hurt people, or they don’t give a damn whether it does or not. There’s no third alternative.

We don’t need deficit-fixin’. We need hirin’. Lots of it. Now.

Wednesday, November 28, 2012 7:54 pm

I’ve looked at clods from both sides, now …

Pretty much every single professional journalist in Washington, and a lot of regular Americans, think there are virtues to be had in balance, moderation and centrism. Perhaps as an extension of that belief — for it certainly is not on the basis of even moderately complicated economics, or, for that matter, mathematics — they believe that both the rich and the poor must give something up to address the nation’s budget issues.

(I refuse to call them budget problems, let alone crises; they are issues in the way that we say that sociopaths have issues in that they are the perfectly predictable, and pretty well predicted, results of predictably sociopathic decisions made by known sociopaths.)

So a lot of people who either ought to know better, or who do know better but stand to profit from pretending otherwise, are out there arguing that we need to screw the rich a tiny bit and the middle class and poor a lot to “fix” the deficit (which is fixing itself pretty nicely at the moment, plunging dramatically as a percentage of GDP, but never mind that) and that if both sides are angry, as they are about the nonexistent Simpson-Bowles “report,”  then we must be doing the right thing. The problem, of course, is that not all anger is justified, valid, moral or even sane, as Charlie Pierce reminds us:

Can we please have an honest assessment of credibility here? If billionaires are angry because they might have to chip in some boutonniere money on April 15, and a middle-class family is angry because their 82-year old grandmother with Alzheimer’s is lying in her own filth in a substandard nursing home because of Medicare “reforms,” are we honestly saying that the anger of both sides is equally justified? Has anyone even asked that question?

To the best of my knowledge, no one in the DC media has asked this question, and my friend Doug Clark at the N&R, who’s usually much more sensible, doesn’t seem to be concerned with it, and, hey, I’ve got a blog, so I thought I’d raise it here.

Wednesday, November 14, 2012 7:12 pm

Also, if you don’t want to repeat after me, kids, repeat after economist Dean Baker: The deficit problem is not an entitlements problem.

Listen to the man before you go giving away your — and my — Social Security and Medicare:

The gang for gutting Social Security and Medicare (aka “The Campaign to Fix the Debt”) are running in high gear. During the long election campaign they gathered dollars, corporate CEOs and washed up politicians for a full-fledged push in the final months of the year. They are hoping that the hype around the budget standoff (aka “fiscal cliff”) can be used for a grand bargain that eviscerates the country’s two most important social programs, Social Security and Medicare.

They made a point of keeping this plan out of election year politics because they know it is a huge loser with the electorate. People across the political and ideological spectrums strongly support these programs and are opposed to cuts. Politicians who advocated cuts would have been likely losers on Election Day. But now that the voters are out of the way, the Wall Street gang and the CEOs see their opportunity.

It is especially important that they act now, because one of the pillars of their deficit horror story could be collapsing. Due to a sharp slowing in the rise of health care costs over the last four years, the assumption that exploding health care costs would lead to unfathomable deficits may no longer be plausible even to people in high level policy positions.

As we all know, the large budget deficits of the last four years are entirely due to the economic downturn caused by the collapse of the housing bubble. The budget deficit was slightly over 1.0 percent of GDP in 2007 and the Congressional Budget Office (CBO) projections showed it remaining low for the near-term future. The origin of the large deficits of the last few years is not a debatable point among serious people, even though talk of “trillion dollar deficits, with a ‘t’” is very good for scaring the children.

However, the big stick for the deficit hawks was their story of huge deficits in the longer term. They attributed these to the rising cost of “entitlements,” which are known to the rest of us as Social Security, Medicare, and Medicaid.

While they like to push the notion that the aging of the population threatened to impose an unbearable burden on future generations, the reality is that most of the horror story of huge deficits was driven by projections of exploding private sector health care costs. Since Medicare and Medicaid mostly pay for private sector health care, an explosion in private sector health care costs would eventually make these programs unaffordable.

As some of us have long pointedout, there are serious grounds for questioning the plausibility of projections that the health care sector would rise to 30 or 40 percent of GDP over the rest of the century. Recently a paper from the Federal Reserve Boarddocumented this argument in considerable detail.

Even more important than the professional argument over health care cost projections is the recent trend in health care costs. While the CBO projections assume that age-adjusted health care costs rise considerably more rapidly than per capita income, in the last four years they have been roughly keeping pace with per capita income.

In fact, in the last year nominal spending on health care services, the sector that comprises almost two-thirds of health care costs, rose by just 1.7 percent. This is far below the rate of nominal GDP growth over this period, which was more than 4.0 percent. While at least some of this slowing in health care costs is undoubtedly due to the downturn, it is hard to believe that it is not at least partially attributable to a slower underlying rate of health care cost growth.

CBO and other budget forecasters can ignore economic reality for a period of time (they ignored the housing bubble until after its collapse wrecked the economy), but if it continues, at some point they will have to incorporate the trend of slower health care cost growth into their projections. When this happens, the really scary long-term deficit numbers will disappear.

A projection that assumes that health care costs will only rise as a result of the aging of the population, and otherwise move in step with per capita income, will lop tens of trillions of dollars off the most commonly cited long-term deficit projections. It would cost some deficit hawks, like National Public Radio, more than $100 trillion of their long-term deficit story. This would be a real disaster for the deficit hawk industry.

This is why the Campaign to Fix the Debt and the rest of the deficit hawk industry will be operating at full speed at least until a budget deal is reached over the current impasse. If CBO adjusts its long-term health care cost projections downward then their whole rationale for gutting Social Security and Medicare will disappear. Now that is really a crisis.

And in light of today’s horrid front-page News & Record article on the so-called fiscal cliff, here’s a question for Greensboro peeps: Would it really be too much trouble to get Jeff Gauger and his crew at the N&R to introduce some fact-based economic coverage? The voters last week seemed to indicate a taste for that kind of thing.

Monday, November 12, 2012 7:21 pm

Repeat after me, kids: There. Is. No. Fiscal. Cliff.

The Washington Post continues to lie, and economist Dean Baker, bless him, continues to call them out on it. Logic having failed, he now turns to mockery:

The Washington Post is throwing all journalistic norms aside in its drive to cut Social Security and Medicare. It continues to hype the budget standoff as an ominous “fiscal cliff” and tells readers on the front page of its web site that it could provide a “magic moment” in which Social Security and Medicare can be cut. The piece begins by telling readers:

“Two years ago this month, the leaders of a presidential commission rolled out a startling plan to dig the nation out of debt. After decades of stagnating incomes, they said, Washington must tell people to work longer, pay higher taxes and expect less in retirement.”

Okay I tricked you, this is the Washington Post which doesn’t acknowledge economic realities like stagnating income. The piece actually began:

“Two years ago this month, the leaders of a presidential commission rolled out a startling plan to dig the nation out of debt. After decades of profligacy, they said, Washington must tell people to work longer, pay higher taxes and expect less in retirement (emphasis added).”

This departure from reality gives you the gist of the story. The piece continues:

“Lawmakers recoiled from the blunt prescriptions of Democrat Erskine Bowles and Republican Alan K. Simpson. But their plan has since been heralded by both parties as a model of clear-eyed sacrifice, and policymakers say the moment has come to live up to its promise.”

Well, yes people have praised their plan. They have also ridiculed it. For example it proposes immediate cuts in Social Security benefits that would be a larger share of the income of the typical beneficiary than President Obama’s proposed tax increases on the top 2 percent would be for most of the affected taxpayers. It also proposes increasing the age for Medicare eligibility, even though this would add tens of billions to the country’s health care costs over the next decade. And, it proposed a minimum Social Security benefit for low wage earners that few low wage earners would actually qualify for due to the number of working years required to qualify.

You  know what the worst thing will be to happen immediately if we don’t have a new deal by Jan. 1? Very rich people will start having to pay a little more in income taxes. Quelle horror.

Also, everyone just needs to shut up about Erskine Bowles being some kind of selfless patriot and/or competent leader. As White House chief of staff, he made Bill Clinton’s affair with Monica Lewinsky possible (not that Clinton wasn’t a Grade A horndog, but you don’t give people like that lots of free time if you expect them to lead the nation without embarrassment). The guy’s an investment banker. He personally will profit a great deal from any kind of austerity deal, as will the investment bank on whose board he sits. Also? Obama is expected to get 60 votes in the Senate to get anything done, a situation the Framers never intended, and Bowles couldn’t even get 14 votes for his own plan from a committee that was named after him. I think that tells you just about all you need to know.

Thursday, October 18, 2012 6:56 pm

Our terrible, horrible, no-good, very-bad news media and the deficit; or, Don’t point that gun unless …

Economist Dean Baker:

In the middle of a steep recession, any measure that reduces the deficit will cost jobs. That is because it will reduce demand. If anyone wants to see a lower deficit in 2013 (certainly the Post does), then they want to throw people out of work.

This is sort of like pulling the trigger on a gun pointed at someone’s head. Presumably this is not done unless the desire is to see the person dead.

 

Monday, April 9, 2012 8:03 pm

Everyone’s entitled to his own opinion, but not his own math

Dean Baker eviscerates both James B. Stewart of The New York Times and Rep. Paul Ryan’s massive tax cuts for rich folks disguised as a federal budget:

What Stewart tells us is reasonable is that the budget calls for cuts in entitlements and tax reform. He then asks who could disagree with this.

One has to wonder whether Stewart has looked at the Ryan budget. First, on taxes the only specifics are cuts in the tax rates paid by rich people and corporations. None of the offsetting tax increases are specified.

If this sounds like a sensible opening gambit, let’s imagine the equivalent on the opposite side. Suppose that we proposed to increase Social Security benefits for the bottom two income quintiles of retirees. Suppose that we also proposed increased spending on infrastructure, research and development, and education.

Suppose the left-wing Ryan budget wrote down that these spending increases would be offset by unspecified reductions in government waste. We then told CBO to score it accordingly. Is this a good starting point for further discussion? …

Even more to the point: Is there anyone who has been paying attention for the past 20 years who believes that if some leftist proposed such a budget as Baker hypothesizes, the mainstream media (forget Fox) wouldn’t go utterly batshit calling out the many problems, miscalculations and flawed assumptions contained therein, including but not limited to some that were not flawed or miscalculated at all (Politifact and Factcheck, I’m looking at you)?

The Ryan budget is proving to be a wonderful Rorschach test. We have people who want to be part of the inside Washington conversation who praise the budget’s courage and integrity. Then we have people who believe in arithmetic who call it what it is: a piece of trash.

Why does this matter? Because people who ought to know better are running round calling Paul Ryan a serious thinker, when in fact he is either unable or unwilling to do fifth-grade math, and because there’s a nontrivial chance he will be Mitt Romney’s running mate.

Monday, November 21, 2011 8:27 pm

The supercommittee succeeded by failing

Filed under: I want my money back. — Lex @ 8:27 pm
Tags: ,

You probably have heard today that the congressional supercomittee charged with finding a way to reduce the deficit by $1.2 trillion has failed. And as a result, you probably think the deficit isn’t being reduced.

You’re wrong.

Back in  August, when it created the supercommittee, Congress actually approved deficit reduction totaling $2.1 trillion over 10 years. It then asked the supercommittee to find an alternative way to save $1.2 trillion. The committee didn’t find an alternative, so barring additional congressional action, we’re going with the reductions approved in August.

That will reduce the deficit by $2.1 trillion. Over the next 10 years.

Now, these cuts are largely unnecessary and, in some cases, morally indefensible. But if things go on as they stand right now, the deficit will be reduced substantially.

That’s not to say that the supercommittee’s failure was a good thing. It wasn’t, and Ezra Klein explains why:

The supercommittee was widely expected to extend the payroll tax cut and the expanded unemployment benefits. Those policies alone are expected to add 1-2 percentage points to growth next year. Some of the proposed deals included further stimulus measures like increased infrastructure spending, which would have given the economy a further boost. There was also talk of patching Medicare’s payments to doctors and the Alternative Minimum Tax, neither of which is specifically a stimulus measure, but both of which would hurt the economy if allowed to expire now.

The supercommittee’s failure throws those deals into doubt. Many Republicans are balking at extending the payroll tax cut altogether. Sen. Jeff Sessions, for instance, “said he was uneasy about extending the payroll tax holiday, calling the national debt ‘a greater threat to us’ than the weak economy.” (Think he’ll insist any extension of the Bush tax cuts is fully paid for?). Other Republicans are hoping to tie unemployment insurance and the payroll tax cut to a bill lifting the defense cuts in the trigger — a strategy that might lead to a wholly different kind of showdown. Either way, the passage of these items is now in doubt, and that means the growth picture for next year is dimming.

If growth falls by 1-2 percentage points next year, that could well mean we’re only growing by one percent or so. If events in Europe take a turn for the worse, it could mean we’re back in recession. That, and not our deficit, is the immediate threat. And it’s one the supercommittee made worse.

So, the deficit? Not that big a deal. But another recession? Quite a bit more likely today.

Thursday, November 10, 2011 7:38 pm

You thought they couldn’t get any stupider. You were wrong.

With unemployment stuck over 9% and GDP limping along barely above flat and no job creation going on to speak of, what should be our top priority?

Hey, I know! How ’bout a balanced-budget amendment! That’ll help.

Except for the part where it totally won’t, according to Macroeconomic Advisers, which provides nonpartisan analysis to major corporations and government entities. Here’s what that group says a BBA would do:

Macroeconomic Advisers writes that if a constitutional balanced budget requirement had been ratified in 2008 and took effect in fiscal year 2012, “The effect on the economy would be catastrophic.”  If the 2012 budget were balanced through spending cuts, those cuts would have to total about $1.5 trillion in 2012 alone, which the report estimates would throw about 15 million more people out of work, double the unemployment rate from 9 percent to approximately 18 percent, and cause the economy to shrink by about 17 percent instead of growing by an expected 2 percent.

Yeah, that sounds like fun. Even the whores at Standard & Poor’s think this is a bad idea.

 

 

 

 

 

 

(h/t: Steve Benen)

Wednesday, August 3, 2011 8:18 pm

On calling people terrorists

Hostage-taking is an act of terrorism. If you don’t want to be called a terrorist, don’t farking act like one.

Thus endeth the lesson.

Tuesday, July 19, 2011 8:06 pm

“But … but … but … CLASS WARFARE!!!”

Filed under: Evil,I want my money back. — Lex @ 8:06 pm
Tags: , ,

Chris Bowers of the Great Orange Satan:

As you read this, rich and powerful people in Washington, DC are trying to determine not whether they should cut programs designed to help low and middle-income Americans, but by how much they should cut those programs. The rich and powerful people in DC are making these cuts in order to pay for tax breaks they recently gave to rich people and large corporations. Additionally, the cuts are being made at the behest of the lobby organizations and media operations owned by rich people and large corporations.

If that isn’t a class war, I don’t know what is.

If it quacks steals from the poor and middle class to give to the rich, it’s class warfare. And if it refuses to provide basic health care to poor people, guts workplace and environmental safety regulations, buys off government regulatory agencies and insulates itself from accountability under the guise of “tort reform,” all while enjoying the lowest tax burden in more than half a century and pretty much all of the income gains in the past 40 years, it might not be genocide, but it  certainly sees genocide as an aspirational peer.

Monday, July 5, 2010 11:13 am

How Washington really works (or really doesn’t), cont.

Filed under: Aiee! Teh stoopid! It burns! — Lex @ 11:13 am
Tags: ,

Jane Hamsher offers “22 Things You Probably Didn’t Know About Pelosi’s Fake Budget ‘n’ Bombs Bill.” My personal favorite: “… if you’re in the majority and you can’t even pass a friggin’ budget you look like an irresponsible douchebag.”

Only I’d fix that by changing “look like” to “are.”

Wednesday, June 30, 2010 7:54 pm

Memo to John Boehner and his batsh*t friends

We need to get the hell out of Iraq and Afghanistan. We do not need to stay there, let alone raise the retirement age to 70 and cut Social Security benefits to pay for it.

Sunday, May 2, 2010 7:56 pm

A challenge to the president

Sir, if you want to talk about “tough choices” in the context of deficit reduction, then man up and put a big-ass wealth tax on the table.

Any old chicken can take money away from the old, poor, sick and voiceless, as we saw during the abortive 2005 effort to privatize Social Security. It takes a real man to stand up to the wealthy who have been hoovering up American wealth for the past 30 years.

You got what it takes, Mr. President? Because I don’t think you do, and I don’t think a single one of the 12 people you and your party appointed to the deficit-reduction committee does, either.

If that turns out to be the case, that’s fine: I don’t know of a soul on this planet who seriously expects any such proposal, let alone for the committee to discuss it seriously, let alone for the committee to recommend it to Congress.

But until that sucker’s out on the table for everyone to talk about, spare me your empty talk about tough choices.

Sunday, February 21, 2010 12:12 pm

Why the deficit is as big as it is

Filed under: You're doing WHAT with my money?? — Lex @ 12:12 pm
Tags:

The chart is derived from Congressional Budget Office estimates:

One caveat: Given the fact that the $400 billion cap on Fannie and Freddie’s buying toxic assets off bank balance sheets was zapped in late December, F&F’s contribution to the deficit, which looks mild, now has the potential to be much larger than is shown here, absent congressional action.

Saturday, February 20, 2010 3:29 pm

Gridlock myopia; or, The New York Times as concern troll

The New York Times is deeply concerned that the partisan gridlock in the Senate is going to keep us from being able to do anything about the rapidly expanding national debt.

That is, in isolation, a logical and legitimate concern. But, as is so often the case with mainstream journalism these days, the article is so contextually anemic that it may as well have one big, stinking fact error as a premise.

The article basically overlooks the many other problems that this gridlock will keep us from addressing. The most important problems include unemployment, health-care reform, infrastructure decay, energy-conservation initiatives and global warming.

This article is a huge journalistic failure for two reasons.

First, some of those problems, such as unemployment, are more immediately pressing than the deficit.

Second, several of them, such as unemployment, health care and energy conservation, are actually contributing to the deficit. And spending on the correct parts of our infrastructure is the surest way to create the kind of long-term prosperity that will be necessary to bring the deficit down.

Why might such a flawed article be published in the Times? I don’t know. I can think of several possible reasons. One is that reporters and their editors have bought into the notion that the deficit is more important, and more urgent, than any other problem. (You would think that employees of an industry that has been so devastated by layoffs would have more sense, but it’s still possible.)

Another is that the article goes the way it goes because that’s the way it’s steered by its sources. And who are they? In a 1,600-word article, only two are quoted by name: G. William Hoagland, “who was a fiscal policy adviser to Senate Republican leaders,” and former Sen. Alan Simpson, a Republican.

But, remember, the Times is a liberal newspaper.


Wednesday, December 16, 2009 10:56 pm

Odds and ends for 12/16

Like Willie Sutton said, you rob banks because that’s where the money is: And if you want to cut the deficit, you also go where the money is:

Health-care reform: Nate Silver has 20 questions for people who want to kill the health-care bill, and Jon Walker has 20 answers. Go read this. Seriously, right now. I’ll wait. Because this might be the best combination of comprehensive and clear that you’ll find on whether or not the current Senate bill deserves to live. Kudos to both bloggers.

Glenn Greenwald says Obama is getting the health-care bill he really wanted. I find it hard to disagree.

But it isn’t the health-care bill WE wanted: 63% of Americans say they wanted Medicare expanded to cover 55- to 64-year-olds; only 33% disagree.

It isn’t the health-care bill doctors wanted, either: UC-San Francisco physicians explain, among other things, why the patents-forever provision is such as bad idea.

Indeed, health-care reform is JUST LIKE the Holocaust: Hey, if Laura Ingraham says it, it must be true, right?

Matthew Yglesias on Time magazine’s choice of Fed chairman Ben Bernanke as Person of the Year, for the win: “[I]t demonstrates a very specific class skew — extraordinary intervention into the market place just long enough to fix the situation from the point of view of asset-owners while leaving wage-earners holding the bag. But the owners and managers and editors of Time Magazine and the companies that advertise in it probably don’t care so much about that.”

What could possibly go wrong?: Western military leaders are seeking additional support in Afghanistan from … wait for it … Russia.

But … but … but … Republicans believe global warming is a myth!: A poll by the Pew Forum on Religion and Public Life finds Democrats significantly more likely than Republicans to have visited a fortuneteller or to claim to have seen ghosts or talked to the dead. (Interestingly, whites, blacks and Hispanics all reported having seen ghosts at about the same rate.)

“One more such victory and we are ruined”: The Pentagon actually wins a Gitmo detainee’s habeas-corpus case … but comes out looking like dirt.

And the fun doesn’t stop with health care: John Cole of Balloon Juice observes, “The best thing about health care reform is that it is a primer for Banking and Financial Regulation. We get to look forward to watching the House bill get neutered down by the conservadems, the GOP will be aligned in unison with industry against, and then when the final bill is not up to Howard Dean’s standards, the progressives can sink it because it isn’t good enough, and noted liberals like Tom Harkin, Ron Wyden, and Russ Feingold will be labeled sellouts to the cause just like they were with health care. Also, I’m sure this will all be Rahm’s fault.”

John Cole was right: Sen. Chris Dodd, D-Conn., indeed is getting ready to screw us over some more on bank bailouts. His 2010 re-election already is in serious jeopardy. Good.

Tuesday, December 15, 2009 10:50 pm

Odds and ends for 12/15

A way to balance the budget?: For the second straight month, the U.S. Treasury auctioned 1-month T-bills at 0.0% interest. The national budget gets significantly smaller if you whack out interest on the national debt, y’know.

All I want for Christmas is a repeal of Gramm-Leach-Bliley.

BOHICA: As part of “paying off” its multi-billion-dollar loan from the taxpayers, technically insolvent bank holding company Citigroup gets to keep $38 billion in tax credits that regulations normally would require it to give up. That figure will easily overshadow any profit the taxpayers may get from selling Citigroup shares. Merry. Freaking. Christmas.

But maybe Christmas is coming early; or, Who are you and what have you done with Sen. Jim Bunning?: Remember those 15 questions that the Cunning Realist suggested should be asked of Fed Chairman Ben Bernanke during his reconfirmation hearings? Unbelievably, a senator asked them. Even more unbelievably, the senator in question was Jim Bunning, heretofore a leading candidate for the title of Biggest Waste of Carbon in the U.S. Capitol.

You may now kiss the D.C. City Council: The District of Columbia has legalized gay marriage. Congress, per the Constitution, gets 30 legislative days to review the law once D.C.’s mayor has signed it, but the Democratic leadership will keep that puppy bottled up until the deadline has safely passed.

No room to talk: Panthers defensive backs Chris Harris and Chris Gamble need to STFU about Patriots WR Randy Moss. While they are having good years, and they did shut Moss down on Sunday, they apparently chose to ignore Wes Welker’s presence on the field. And what really matters is that yet again, the Panthers have failed to achieve consecutive winning seasons, while the Pats almost certainly are going to the playoffs.

Wardrobe police: Is Roy Williams gonna have me thrown out of North Carolina for wearing a Panthers jersey in Chapel Hill?

Shorter Janet Tavakoli: Except for Paul Volcker, the bankers don’t get it.

Brother can you spare your Visa card?: The Miami Herald, which recently laid off 199 people, is now attaching to each article a link through which people can contribute money online … to the paper, not the laid-off employees. The last time I can remember anything like this happening was when I was a kid and Ted Turner went on the air in Charlotte to ask people to send him money to keep Channel 36 on the air. (Yes, that’s Turner Broadcasting’s Ted Turner, and, yes, he repaid it.)

CBS Sports: “If any of our announcers talk about Tiger Woods, we’ll shoot this dog fire them.”

Best banking idea I’ve heard in a while: If Barney Frank has his way, only retail banks will be able to borrow from the discount window. At worst, this gets some banksters off the federal teat. It may even significantly ease the current credit crunch.

Quote of the day: “You’re either part of the solution or you’re a tool of ACORN.” — Conservative Brown, Boy Detective, by Tom Tomorrow.

Smarter Washington Post, please: The Post publishes a bunch of contextually challenged nonsense regarding the national debt. Economist Dean Baker rips them a new one. Yes, the national debt is too high and rising, but the bigger and more urgent problem is joblessness. The Post wants to scrap Social Security and Medicare but just doesn’t have the stones to say so.

Smarter Washington Post, please, cont.: Charles Lane criticizes colleague Ezra Klein’s criticism of Joe Lieberman … while also conceding that Klein’s factual claim is correct. Idiot. All you need to know about Lane is that he was Stephen Glass‘s editor. All you need to know about Klein is that Joe Lieberman finds him bothersome. (But here’s useful background on the contretemps.) Also, I posted the one-word comment “FAIL” on Lane’s blog post earlier; as of 10:30 p.m., it had been deleted, which fact I shortly thereafter commented upon. We’ll see if the 2nd comment stays up.

Smarter judges, please: U.S. District Judge William Duffey tells two Muslim defendants at a sentencing, “I’ll say this, our Gods are very different.” Uh, no, infidel; Christians and Muslims worship the same God.

If you like what Joe Lieberman is doing to health-care reform, wait’ll you see what he has planned for Social Security and Medicare.

Terminated; or, Cue the Limbaugh smears in 3 … 2… 1 …: Arnold Schwarzenegger throws Sarah Palin under the (hybrid?) bus.

Jerome “Swiftboat” Corsi asks,”Could it be that President Obama intends to bankrupt the USA in order to destroy free-enterprise capitalism itself?” Sounds like fun! Let’s play! Could it be that Jerome Corsi is a paranoid psychotic? Could it be that Jerome Corsi wouldn’t recognize the destruction of free-enterprise capitalism THAT’S NOW GOING ON, LED BY INVESTMENT BANKS, if it bit him in the ass? Could it be that Jerome Corsi has a financial motivation to misrepresent what the president is trying to do? Hey, this is fun! I could do this all day!

Paying for your wars: The Greatest Generation, so revered by conservatives, had no problem with this concept; indeed, they inculcated it in their children. So why do today’s Congressional leaders have such a problem?

Why is private health insurance such a bad idea? Let me the Main Street Alliance draw you a picture:

Back from the dead and ready to incriminate?: Some 22 million White House e-mails from the first Bush 43 administration have been “found,” four years and change after they “went missing.” In a perfect world, Karl Rove will be going to prison as a result for having 1) outed undercover CIA agent Valerie Plame and 2) obstructed a criminal investigation into the outing thereof. In the world we live in, we’ll probably find out that the missing $12 trillion in U.S. wealth, much of it sucked out of the home values and retirement savings of the middle class, is now in some Nigerian barrister’s bank account.

Math: About fifteen times as many people die in the U.S. every year as a result of lack of health insurance as died in the 9/11 terror attacks.

No methaqualone for you, says the Methaqualone Nazi!: The new Republican Party-sponsored Web-link shortener, GOP.am, includes this in its terms of use: “If you use it for spamming, illegal purposes or to promote lude content, your GOP.AM URL will be disabled.” Earlier, bloggers and commenters for Balloon Juice were using the site to provide links to bondage sites. Hee.

Friday, December 4, 2009 9:40 pm

Odds and ends for 12/4

Hmm, roasted or fried? Um, I mean, we come in peace: Kara Swisher renders Google CEO Eric Schmidt’s Wall Street Journal op-ed into plain English.

Is your boss stealing from you? Could well be.

Good news/very bad news: In the week ending Nov. 28, first-time unemployment claims fell from 462,000 the previous week to 457,000. The very bad news: Emergency claims by people whose unemployment benefits have run out rose by 265,000. In one week. The total was more than 3.8 million, compared with 777,000 a year ago.

Will wonders never cease?: Sen. Jim Bunning, R-Ky., does one worthwhile thing in his miserable, misanthropic life and carves Ben Bernanke a new orifice. Fellow tool Jim DeMint, R-S.C., actually asks helpful questions.

Yes, apparently wonders will cease: Sarah Palin, birther.

And then wonders that already have happened will un-happen: Sarah Palin Goes Rogue Fail.

Shorter Mitt Romney economic plan: “More money for me and my friends!”

You’re worried about health care and the deficit? Fine: Let’s talk about that: Republicans and some “centrist” Democrats say they worry about what health-care reform will do to the deficit. They need to worry more about what will happen to the deficit if health-care reform doesn’t pass. (But don’t take my word for it. Take the word of Bush 43’s head of Medicare.)

Pwn3d!: Sens. Tom “Sanctimonious” Coburn and David “Diapers” Vitter introduce what they intend to be a poison-pill amendment to health-care reform that would require members of Congress to enroll in the public option … only to be swarmed by Democrats who think that’s a great idea and sign on as co-sponsors. Hee.

Quote of the day, from commenter “paradoctor” at Hullabaloo, on the douchiness of Senate Republicans: “To them, corporations are people and women are an abstraction.”

Nature strikes back: Asian carp are invading fresh waters of the upper Midwest and the Great Lakes. Bye-bye, trout. And apparently you shouldn’t use a motorboat to go fishing for them because the sound of the motor just pisses them off. (h/t: Nance)

New Internet meme: “There’s far too much detail here for this to be a fabrication.”

And he’d have lived forever if it hadn’t been for those meddling kids and their dog: Aaron Schroeder, composer of hundreds of pop hits ranging from “It’s Now or Never” and “Good Luck Charm” to the theme from the TV cartoon “Scooby-Doo, Where Are You?,” is dead at 83.

Tuesday, November 17, 2009 8:39 pm

The deficit monster

Filed under: I want my money back. — Lex @ 8:39 pm
Tags: ,

Now that the economy is stumbling back to normal health (disclaimer: at least, that’s what CNBC appears to be trying to get me to believe), I’m supposed to believe that the biggest threat to our economic health right now is the deficit. Inasmuch as I have believed for pretty much my entire adult life that the biggest threat to our economic health right now is the deficit, this shouldn’t be a hard sell.

But at least at the moment, I’m not buying it. And if the people who are selling are having trouble getting someone like ME to buy, whether or not a majority of the country agrees with them (which in fact it does, at least at the moment), then maybe they need to entertain the possibility that the deficit is NOT, in fact, the biggest threat to our economic health right now.

I would argue that the biggest threat to our economic health right now is the lack of jobs, which is hurting us at the most basic level: The number of Americans who “lack consistent access to adequate food” is now 49 million. Yeah, you read that right, 49 million, or about 1 in 6. Of those, a third are actually skipping meals or at least cutting portions; the rest are eating regularly, but only with the help of food stamps, food banks or soup kitchens:

“Many people are outright hungry, skipping meals,” said [James Weill, director of the center that did the story]. “Others say they have enough to eat but only because they’re going to food pantries or using food stamps. We describe it as ‘households struggling with hunger.’ ”

Well, some of us do:

“Very few of these people are hungry,” said Robert Rector, an analyst at the conservative Heritage Foundation. “When they lose jobs, they constrain the kind of food they buy. That is regrettable, but it’s a far cry from a hunger crisis.”

During the last close-to-comparable recession, in the early 1980s, news like that would have been atop the front page — not only because of the number of people doing without but also because back then the public was still capable of outrage at such deliberate lying about the misfortune of our fellow Americans. Now? Eh. We shrug, so much have our expectations been lowered by those who are stealing from us.

But I digress.

Let us say, for the sake of argument, that the deficit really is the single greatest economic danger we face. Problem is, the media are both explicitly and implicitly conflating ALL spending with deficit increases. But not all spending increases the deficit, if it is offset by increased revenues and/or by spending cuts elsewhere.  Consider this bit of Politico analysis:

… it will be tough for many Democrats to sell themselves as deeply concerned about spending after voting for the stimulus, the bailouts, the health care legislation and a plan to address global warming, four enormous government programs.

Well, yes, it will … if all four of those programs increase the deficit. However, at least two will not. Politico even acknowledges manages to report this fact without acknowledging that it completely undermines the whole deficit argument:

For starters, the White House has not dropped plans for an aggressive global warming bill early next year that will be loaded with new spending on green technology and jobs – that would be paid for with tax increases. Democratic lobbyist Steve Elmendorf says the White House focus on deficit reduction could easily kill the cap-and-trade effort. “I think this means cap-and-trade has to go to the backburner,” he said.

Now, whatever you think of the merits of cap-and-trade, we’re talking about a bill that, as Politico explicitly acknowledges, would be paid for with tax increases. That means it will not add to the deficit. So why even bring it up in this context?

OK, so what about health-care reform? Well, David Sirota has a math problem for you to solve:

Let’s say you’re a congressperson or “tea party” leader looking to champion deficit reduction — a cause 38 percent of Americans tell pollsters they support. And let’s say you’re deciding whether to back two pieces of imminent legislation.

According to the nonpartisan Congressional Budget Office, the first bill’s spending provisions cost $100 billion annually and its tax and budget-cutting provisions recoup $111 billion annually, thus reducing total federal expenditures by $11 billion each year. The second bill proposes $636 billion in annual spending and recoups nothing. Over 10 years, the first bill would spend $1 trillion and recover $1.11 trillion — a fantastic return on taxpayer investment. Meanwhile, the second bill puts us on a path to spend $6.3 trillion in the same time.

Save $110 billion, or spend $6.3 trillion? If you’re explicitly claiming the mantle of fiscal prudence, this should be a no-brainer: You support the first bill and oppose the second one.

The first bill would be health-care legislation. As currently priced and structured, it would actually reduce the deficit, compared with doing nothing. So explain to me again why enacting it would make the deficit worse?

Sirota’s related point, which isn’t someplace I’d originally set out to go but is probably worth addressing anyway, is that right now we’re spending $636 billion annually on defense. And that’s just what we budget. The actual war-fighting appropriations for Iraq and Afghanistan aren’t even part of the budget, and they total hundreds of billions more.

Moreover, we spend more money on defense every year than the rest of the world combined. I’m thinking that if we want to reduce the deficit, we need to do a Willie  Sutton and go where the money is. That’s defense spending in general and spending for two unnecessary Asian land wars in particular.

But if, God help you, you watch the Sunday talk shows, what you’ll hear is that the only way to bring the deficit under control is for entitlements to take a hit. Crap. We can cut defense spending. We can raise taxes on the wealthy. We can raise the cap on income subject to the Social Security withholding tax. If we stop and think about it, we have a number of options for reducing the deficit without gutting Social Security or Medicare. (And it bears repeating that although you often hear about a Social Security crisis, there isn’t one: Even if we do nothing, Social Security can continue to pay what it owes for several more decades, and only minor fixes now would suffice to keep Social Security solvent over its entire 75-year time horizon.)

We can also stop sending hundreds of billions of taxpayer dollars to the banks. If they’re going to fail — and, in a truly free market, Citi and Bank of America, at the least, would have failed long ago — better to bite the bullet and let them do it now. Let’s further eliminate “too big to fail” as an instrument of public policy: “too big to fail” means too big, period.  And when banks do dumb things with their/our money, they need to go under and be nationalized, not kept artificially alive with endless transfusions of your hard-earned cash.

These steps, even in combination, wouldn’t eliminate the deficit. But, done right and targeted correctly, they could bring the deficit down to a more sustainable level, buying us time to rebuild a healthy economy whose expansion, based on solid fundamentals, eventually will build the tax base up to the point at which a final assault on deficits becomes feasible.

But the answer is NOT to let them take more of your Social Security. And when you hear anyone suggest otherwise, very quickly turn around and stick your pocketknife through the hand he’s about to place on your wallet.

Friday, November 13, 2009 8:49 pm

Odds and ends, Nov. 13

  • Typing Under Ladders: Today’s Friday the 13th. I have exactly no interesting Friday-the-13th stories to tell. To the extent that I can remember the dates at all, two of the unluckiest days of my life, one involving romantic failure and one involving serious physical injury, occurred on the 4th of a month.
  • Home Game: Khalid Sheikh Muhammad and four other accused planners of the 9/11 terror attacks will be tried in civilian federal court in New York, just blocks from Ground Zero. The wingnuts are soiling their drawers at the thought of terrorists (accused, but still) on U.S. soil. Me? I think the U.S. court system can handle the case and that the FBI and NYPD are more than up to handling the security. This ain’t, in other words, an issue over which I’m going to lose any sleep. Nor should you.
  • Bloviation By Other Means: I watched CNN’s Lou Dobbs only enough to determine that he was a pompous, phony ass upon whom none of my time should be wasted, and so I don’t care that he left CNN except that I think he’s planning to run for president. Or for governor of Alaska. Whichever.
  • Nice Guys: Married women who learn they have a serious illness are seven times as likely as married men to end up separated or divorced.
  • Back from the Dead: Under the guise of deficit reduction, the rich are coming after your Social Security again. Don’t let them get away with it.
  • Undessicated after all: You remember when we rammed our manly missile into the moon a few weeks ago? Turns out the moon was wet. All innuendo aside, while this doesn’t throw everything we thought we knew about the moon up for grabs, it changes quite a lot, including the consensus on whether there ever might have been life on the moon. Cool.
  • Double Standard: If pro-choice women are considered immoral for threatening to oppose any health-care reform that bans spending federal money on abortion, what does that make the Roman Catholic Church?
  • Delay, Deny & Hope That I Die: Why would Senate Republicans delay extending unemployment benefits for weeks and weeks, and then finally vote unanimously in favor of them? Because procedural rules made delay the functional equivalent of denial, so they could screw people and still look good as far as the voting record went. Bastards.
  • Listening to the People Who Were Right: Ten years ago, Sen. Byron Dorgan, D-N.D., correctly told his colleagues that repealing the Glass-Steagall Act was a bad idea, one that within 10 years we would come to regret. So why is it that Byron Dorgan isn’t running all things financial in Washington today? Did you not just hear what I said? He correctly told his colleagues that repealing Glass-Steagall was a bad idea.
  • Cyber Pearl Harbor has already happened. Twice. Both times on George W. Bush’s watch, although so far as anyone can tell, it doesn’t look like Obama has learned anything from his predecessor’s mistakes.
  • I Believe the Technical Term for This Is “Fraud”: One reason Chrysler got a lot of taxpayer money was that it was going to produce greener cars. Only now that it has actually gotten the money, guess what it’s not doing?
  • Another Sin to Lay at the Feet (Tentacles?) of the Vampire Squid: Oh, nothing much, really. Just an oil scam. A $2.5 trillion oil scam.
  • Relatedly, and finally, Why Goldman Sachs Should be Broken Up, by, interestingly enough, Goldman Sachs.

Thursday, September 10, 2009 8:13 pm

Cap, not trade

Filed under: I want my money back. — Lex @ 8:13 pm
Tags: , ,

Sorry; this has nothing to do with the environment.

Since the government started shoveling money out the door to the financial industry about this time last year, people have been worried about the effect on deficits and the national debt. That worry, of course, only accelerated with the automaker bailouts and the stimulus package.

But here’s the thing. The national debt is capped by law, currently at about $12.1 trillion. The White House wants that limit raised to $13 trillion. Congress has to do that or the government could go into default, unfortunately, but you can send a message of concern about this long-term problem by signing this e-petition at Zero Hedge opposing raising the national-debt cap.

But, Lex, you might ask, aren’t you being inconsistent by signing such a petition? In the short term, yes, although I would argue that that inconsistency could be eased a great deal by cutting spending. I’ve run just enough of the math to know that this wouldn’t make up $900B, but I’d at least start with what we’re spending to be in Iraq and Afghanistan.

Long-term, this ever-increasing debt spells disaster.

Thursday, June 11, 2009 10:09 pm

PAYGO: Yes, we’ll have to have it both ways — one way at a time

The president wants Congress to adopt a pay-as-you-go approach to the federal budget and says he hopes to halve the federal deficit by 2012. Republicans say there’s no way he is sincere about it. (PAYGO means you don’t propose a spending increase without an offsetting spending cut and/or tax increase to pay for it.)

Unfortunately, this ain’t a yes-or-no question, and as a longtime deficit hawk, I say that with great pain. But here’s the deal.

First, we’re in a bad way fiscally. The deficit for FY09 topped a trillion in May, with four months still to go in the year.

Second, not only are we going to have to live with that for a while, if we want to get people back to work we ought to make it even worse. Yes, really. That’s because the economy is doing so poorly at job creation right now that federal spending is going to have to help make up the difference. The amount of federal spending needed to make a serious dent in an unemployment rate of 9.4% would create a deficit more than twice as big as the one we’ve got, but some credible economists are arguing that that’s what we need to do anyway.

Politically, it won’t happen — long-term job creation is never a big winner on Capitol Hill — but hypothetically, if it did, it would help in the long run if that money were spent on things that would help boost future productivity and, thus, economic growth. Besides being a good thing in itself, the resulting prosperity could make reducing future deficits a lot easier. (Examples of such spending areas include education/training and upgrading our Internet infrastructure. At least a dozen fairly sizable countries have significantly better networks than ours.) But, of course, that money might not be spent, or at least not concentrated on, such productive targets.

But even with that political reality, the fiscal reality is that neither Obama nor anyone else is going to halve the deficit by 2012. Doing so, even if significant tax increases were enacted, would also require so many cuts in spending that 1) significant parts of the electorate would revolt and 2) the impact on the still-fragile economy likely would be disastrous. If the deficit is no larger in 2012 than it is in 2009, that’ll probably be about the best we can hope for, and that’s not even the most likely scenario.

So Obama is being disingenuous at best — and, I would in fact argue, consciously lying — when he suggests we can halve the deficit in four years.

But the Republicans absolutely do not come to this discussion with clean hands, either. The national party has a 30-year history of profligacy. (Republicans like to point out that Dems controlled the House for Reagan’s entire presidency, and controlled the Senate for two of Reagan’s eight years. They’re less eager to point out that every single budget enacted by Congress in that era had a smaller deficit than the ones Reagan originally proposed.) It is evidence of how debased our national discourse has become that House Republican Whip Eric Cantor is given a platform by CNN to criticize what Obama has done in five months when George W. Bush and a mostly (but not entirely) Republican-controlled Congress inherited a near-surplus (accounting for raids on the Social Security trust fund, the only recent year in which the government truly ran a surplus was FY99) and then spent eight years passing irresponsible tax cuts, running two wars off-budget, and looking the other way while fraud Treasury-looting on a breathtaking scale was taking place in every arena from rebuilding Iraq to providing prescriptions for seniors.

Then there are the less obvious agendas of some — though by no means all — of those who want us moving more quickly toward restoring fiscal stability.

The people who tried to partially privatize Social Security in 2005 are still out there. They hate SS on principle and are perfectly willing to use the deficit as an excuse to claim that the program is in much worse shape than it actually is. (In fact, the changes made in 1983 to cover the Baby Boomers’ retirement are doing exactly what they were supposed to do, and the program can be kept solvent over a 75-year horizon with only minor changes.)

And the Grover Norquists of the world — the people who, over the desires of a solid majority of the electorate, want to make government small enough to “drown it in a bathtub” — are out there, too. And if at least some of the people who want to cut SS are sincere but misinformed, the Norquist crowd is simply a bunch of liars. Their roots lie with the Reagan folks who, as David Stockman famously confessed, knew tax cuts wouldn’t really raise revenue to balance the budget, as they had claimed, but would in fact create deficits so great that discretionary spending would have to be butchered — which was their point.

So how do we get back toward a balanced budget?

For one thing, health-care costs are going to have to be reduced. And unfortunately, some of the biggest contributors to that problem aren’t being targeted for solutions. The more visible problems of Medicare and Medicaid will have to be addressed as well, and it will be imperative that those programs adopt some of the documented best practices of other organizations, such as the Department of Veterans Affairs.

For another, we’re going to have to cut the defense budget, big-time. And that will mean learning to work more cooperatively with our allies to protect and advance our national and shared interests. We haven’t done such a hot job of that in recent years.

And until we get back on track fiscally, we’re going to have to ask all Americans, but particularly the wealthy and large corporations, who have benefited so much from government policies in the past 30 years and particularly in the past eight, to contribute more.

It’ll take more than all that, too, but those will be the biggies. No one or two of them will fix the problem alone. But I agree with anyone, irrespective of their underlying motive, who says we need to get the fisc back in order. There will always be bad economic times when deficit spending is called for to stimulate the economy. But to be able to do that without creating long-term damage, we need to run balanced budgets or even surpluses when times are middlin’-to- good. And not enough politicians are willing to say that.

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