Monday, July 25, 2011

The spending cuts in the budget deal are a pitiful joke

A trillion dollars sounds like a lot of money, doesn't it? Well when it's (A) over 10 years and (B) from a spending level that is around 3.8 trillion for the current year, it's ez to see that a trillion dollars of cuts is a joke. Pro-rated, that's $100,000,000,000 cut each year from a level of $4,800,000,000,000. Which is 2% and change. Which is pitiful.

Plus, the cuts aren't cuts. Here's Ezra Klein on Harry Reid's cuts:

Reid’s plan includes $100 billion in savings from so-called “mandatory spending” like Fannie Mae and agricultural subsidies, $1 trillion in savings from winding down the wars, and $400 billion in reduced interest payments from cutting more than $200 billion in spending.

So a mere $10,000,000 per year of actual spending cuts while the rest comes from "winding down the wars" and reduced interest payments from winding down the wars.

Sweet baby Jeebus!

Ain't that just like a boss to totally fudge the numbers and con the shareholders?

Mungowitz is right. This is pro wrestling.


Anonymous said...

Probably worth noting that the budget assumption that we'll save money by winding down the wars implicitly makes the debatable assumption that we don't get into new wars any time soon.

As a corollary, if we do go to war again some time in the next ten years this means the budget is pretty much tanked. I'm not really sure that I like the odds that we'll manage to avoid stumbling into a pretty expensive war in the next ten years given the number of potential crises (terrorism originating in Yemen, piracy in Somalia, nuclear proliferation in Iran, PRC aggression against Taiwan, royal succession craziness in North Korea, narco-terrorism in Mexico, etc) that could potentially get really ugly. Such problems are especially likely if our budgetary troubles prove a provocative weakness. Likewise, I don't think it's likely that we'd shrug off provocations given how easily we decided to provide air support for muj in Libya.

Richard Stands said...

Aren't these more accurately termed "budget cuts" rather than "spending cuts"? They may result in the federal government actually spending less money in 2012 than they did in 2011, but I doubt it.

THH said...

That's the beauty of it all. We won't cut defense or the drug subsidies that bloat Medicare or anything that would actually matter. Neither party will. The Republicans want to make cuts to things they consider to be Democratic spending but refuse to even look at their own pork.

So you come up with artificial cuts and in the end you cut no spending but pretend to cut a lot of it. It's a win, win for both parties and will be how this all gets resolved.