Hostage Crisis is Fake

This was worrisome, until I realized it has to be a hoax.

I mean, a cut that amounts to less than 1/2 of 1 percent of the budget can't possibly ground 33% of combat aircraft, right?  If the people in charge are competent.

But the real hint is the name of the general in the story.  He's trying to hold the country hostage to the idea that military spending must not be cut at all.  So of course his name is "Gen. Mike Hostage."

Sure it is.  Good one.


Nod to Anonyman

Balancing Budget Should Be Progressive Priority

Not all progs are goofy.

My man Don Taylor makes considerable sense, in fact, in his new book.

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Takeaway

Unemployment benefits expiring? Please.

Wake me up when three things happen:

1. Social security/medicare/entitlement reform. Raise ages, means test, raise maximum payroll before taxes go to zero.

2. Cut DOD and other defense related spending by at least 15%. More is better, but no less.

3. Reform taxes along lines suggested by Bowles-Simpson budget commission proposal.

Everything else is bullshit. And I got to say so on the Takeaway this morn. (7 am is early for a radio show...ugh)

NYT Op Editoriation

Three NYT op eds on the budget:

"A trick question: If Congress takes no action in coming years, what will happen to the budget deficit? It will shrink - and shrink a lot. This simple fact may offer the best hope for deficit reduction. As federal law currently stands, some significant tax increases are set to take effect in coming years. The most important is the scheduled expiration of the Bush tax cuts at the end of 2012...If Mr. Obama wins re-election, he could simply refuse to sign any budget-busting tax cut for the rich...Republicans, for their part, could again refuse to pass any partial extension. And just like that, on Jan. 1, 2013, the Clinton-era tax rates would return. This change, by itself, would solve about 75 percent of the deficit problem over the next five years." [David Leonhardt, NYT op-ed]

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"[W]e can't let the oldsters get off scot-free. As my colleague David Leonhardt reported in The Times, two 56-years-olds with average earnings will pay about $140,000 in dedicated Medicare taxes over their lifetimes. They will receive about $430,000 in benefits. This is an immoral imposition on future generations. The Ryan budget wouldn't touch this generation, but a bipartisan budget deal should ask middle-class and affluent boomers to make a sacrifice for their country. Slow the growth in health care benefits now and dedicate that money to paying down the debt and investing in the young." [David Brooks, NYT op-ed]

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"Public policy is going to be made from inside a fiscal straitjacket for the foreseeable future. But within that straitjacket, Washington can favor policies that enhance working-class opportunity, while ruthlessly paring back those that subsidize the affluent. The goal shouldn't just be small government, but what the economist Edward Glaeser calls 'small-government egalitarianism.' There are elements of this vision woven into the Ryan budget - cuts to farm subsidies, means-testing for Medicare, and promises to go after tax expenditures that primarily benefit the rich. But at least in its initial draft, too much of the budget's austerity is borne by downscale Americans." [Ross Douthat, NYT op-ed]

(Nod to Kevin Lewis)

Some thoughts: Douthat's "subsidize the affluent" is a little strange, as is the whole "tax cuts for the rich" meme. 47% of American pay ZERO fed income tax. How would you cut their taxes? You can only cut taxes on people who PAY taxes (I'm an economist; I know these things).

Still, and as Angus has said, we certainly could means test SocSec/Medicare, and by all means should cap mortgage interest deduction, perhaps at $15,000 per year.

But the real "subsidies to the affluent" are cutting subsidies to sugar, corporate farms, oil companies, and big fat defense firms. The problem is not a misallocation by ability to pay, but rather straight up subsidies to war pigs, farm pigs, and the prison-industrial complex fattening the purses of anti-drug warriors. Those payments dwarf the tax cuts.

Taxes take money from people who have earned it. Subsidies are gifts of money from those taxpayers to people who have NOT earned it. Get rid of the subsidies, first.

Nick "The Jacket" Gillespie Prepares Balanced Budget

This is cute, for several reasons.

First, the content is good, and the video works just based on the premise.

But for the cognescenti, all of whom know that Nick's "nickname" (sorry) is "The Jacket", the fact that he is wearing the leather jacket UNDER the apron is terrific. Nick is 90% in on the joke, but the fact is that he DOES always wear "the jacket."

Angry Alex asks whether Nick EVER takes off the jacket. My understanding is that, like the Bandit's hat, he takes it off for one thing, and one thing only.

It's so EZ to save the country

The NY Times set out a challenge: YOU fix the Budget! So I tried and it was easy. You can see my plan from this link.

I (more than) balanced the budget in 2015 and 2030 with 90% coming from spending cuts and 10% from new revenues.

I left the Bush tax rates in place. I didn't get rid our our current tax breaks for mortgages and health insurance. I didn't put on a national sales tax.

I did put on a carbon tax and some type of estate tax. I raised the social security retirement age one year to 68, and I capped medicare growth at GDP growth +1% point starting in 2013.

The rest was just straight up, old fashioned spending cuts.

I would put the chances of anything within two standard deviations of my proposal getting through our political system at right around 2 or 3 percent tops.

But the bottom line is that we are not in budget trouble because of any fundamental structural economic or demographic problems. We are in trouble because our politics are disfunctional.

The Shrub is STILL full of it

It's good to know that some things never change.

Shrub has written a book and is out on a media tour promoting it. Among the strange notions the book contains is the argument that GW Bush was a fiscal conservative! His evidence is a chart showing that Federal spending as a % of GDP was lower during his Presidency that it was during Clinton's, Daddy B's, or even Reagan's.

FAIL!

Presidents do not inherit a blank slate on spending. They start where the previous administration left off. Here's a graph of Federal spending since 1980:

(click on pic for a more glorious image)

As can be seen, under Reagan spending fell by a couple percentage points, under Clinton it fell considerably more, but the Bush train only goes one direction: UP! To the tune of around 2.5 percentage points of GDP!

Paging President Shrub! Phone call for the Shrub!