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18 July 2011

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graywolf

Misleading story.
Looked at this group's (Center on Budget Policies and Priorities) web site.
They are only "non-partisan" to the extent that their constituency is the parasitic, permanent inside-the-beltway ruling class.
The chart title might better be:
"Preserve useless, fat-assed bureaucrats, beltway bandits and union slugs or improve child health....."

steve

Yes, it's been said time and time again by some folks on both the left and the right that there will never be an honest debate on the future of the US without a reassessment of our bloated defense budget.

Without that debate, to argue the vision of the US along the lines of "free market or social democracy" is meaningless.

Drastically reduce the defense budget and then let us have an honest debate--tax cuts returning the money to taxpayers v. universal healthcare, investment in infrastructure, etc.

Charles

Lots of fallacies included in these charts that would be uncovered with some critical thinking about the implicit assumptions. There are two sides to a deficit -- revenue and spending. This focuses primarily on the revenue side, but it is equally true that the deficit occurred because we spent beyond our means.

Let's take these from the top: Bush tax cuts. Revenue increased 29% but spending increased 46% during the Bush years. Percentage of the revenue coming from the richest 1% increased from 34% to 38% while the share paid by the bottom 50% of wagearners decreased from 4% to 2.7%. Clearly the problem was spending, not a failure to tax the rich.

Wars in Iraq and Afgh approved by bipartisan majorities in Congress "cost" just as all the other the other spending.

"Cost" of an economic downturn: Downturns are selectively shown here to cook the numbers. There was a recession from Mar-Nov 01 and resulting economic weakness after 9/11 that is not shown as affecting revenues while the post-2008 downturn is shown. While the people were tightening their belts to make it through hard times, the government was not. Since 2008 revenue decreased 15% but spending in the same time increased 15%.

Recovery measures: more wasteful spending which has had (predictably) no positive effect on the economy.

Debt without these factors: The deficit would not have been closed without all these factors and still been some 20% of GDP -- an astonishing amount, but of course in gray and placed at the bottom of the chart, it almost looks small.

Until we start addressing the systemic spending issues and stop trying to lay blame on every other reason under the sun, we are doomed to be like the guy who maxes his credit cards then complains that he has no money to feed his family.

optimax

Here is another chart showing the non-security discretionary budget averaging 3.3% of GDP from 1962 to 2008, its 2011 level of 3.5% of GDP and how all plans now on the table cut it from 2.2 to 1.5%. Since 2001 defense spending has increased 1/3--all because of 16 criminals.

Click on full policy memo for PDF version:

http://www.epi.org/economic_snapshots/entry/proposed_nsd_spending_levels_dangerously_low/

walrus

Look on the bright side. The boondoggles that make the economy less efficient and prosperous are obvious.

Solutions are obvious. American economists are the best in the world at economic analysis, having invented most of the methods and tools, even if they are not permitted to use them at home.

The population is basically law abiding, infrastructure is reasonable, if a little old, as are the legislative systems and regulations.

Natural resources are not an issue if a little creativity is employed.

The injection of a little legislative common sense with a little bit of well thought out legislation and regulation could stop the pain in as little as Five years and restore the country's fortunes in Ten years - all that is required is overcoming special interests.

Farmer Don

Walrus says it better than I could have. Great post.

One more thing is that these "boondoggles" have a greater effect than meets the eye. If you burn a dollar bill, you don't just loose the dollar, you loose all the income from investing that dollar.
The first graph shows how much revenue has been lost from the "economic down turn". This is directly related to all the mal-investment from unnecessary wars etc. If this money had been spent on things giving a return, the recession may not have even happened.

graywolf

These are all the programs that the new Republican House has proposed cutting.

Corporation for Public Broadcasting Subsidy. $445 million annual savings.

Save America 's Treasures Program. $25 million annual savings.

International Fund for Ireland . $17 million annual savings.

Legal Services Corporation. $420 million annual savings.

National Endowment for the Arts. $167.5 million annual savings.

National Endowment for the Humanities. $167.5 million annual savings.

Hope VI Program.. $250 million annual savings.

Amtrak Subsidies. $1.565 billion annual savings.

Eliminate duplicative education programs. H.R. 2274 (in last Congress), authored by Rep. McKeon, eliminates 68 at a savings of $1.3 billion annually.

U.S. Trade Development Agency. $55 million annual savings.

Woodrow Wilson Center Subsidy. $20 million annual savings.

Cut in half funding for congressional printing and binding. $47 million annual savings.

John C. Stennis Center Subsidy. $430,000 annual savings.

Community Development Fund. $4.5 billion annual savings.

Heritage Area Grants and Statutory Aid. $24 million annual savings.

Cut Federal Travel Budget in Half. $7.5 billion annual savings.

Trim Federal Vehicle Budget by 20%. $600 million annual savings.

Essential Air Service. $150 million annual savings.

Technology Innovation Program. $70 million annual savings.

Manufacturing Extension Partnership (MEP) Program. $125 million annual savings.

Department of Energy Grants to States for Weatherization. $530 million annual savings.

Beach Replenishment. $95 million annual savings.

New Starts Transit. $2 billion annual savings.

Exchange Programs for Alaska Natives, Native Hawaiians, and Their Historical Trading Partners in Massachusetts . $9 million annual savings.

Intercity and High Speed Rail Grants. $2.5 billion annual savings.

Title X Family Planning. $318 million annual savings.

Appalachian Regional Commission. $76 million annual savings.

Economic Development Administration. $293 million annual savings.

Programs under the National and Community Services Act. $1.15 billion annual savings.

Applied Research at Department of Energy. $1.27 billion annual savings.

FreedomCAR and Fuel Partnership. $200 million annual savings.

Energy Star Program. $52 million annual savings.

Economic Assistance to Egypt . $250 million annually.

U.S. Agency for International Development. $1.39 billion annual savings.

General Assistance to District of Columbia . $210 million annual savings.

Subsidy for Washington Metropolitan Area Transit Authority. $150 million annual savings.

Presidential Campaign Fund. $775 million savings over ten years.

No funding for federal office space acquisition. $864 million annual savings.

End prohibitions on competitive sourcing of government services. Repeal the Davis-Bacon Act. More than $1 billion annually.

IRS Direct Deposit: Require the IRS to deposit fees for services it offers (such as processing payment plans for taxpayers) to the Treasury, instead of allowing payments to remain as part of its budget. $1.8 billion savings over ten years.

Require collection of unpaid taxes by federal employees. $1 billion total savings.

Prohibit taxpayer funded union activities by federal employees. $1.2 billion savings over ten years.

Sell excess federal properties the government does not make use of. $15 billion total savings.

Eliminate Mohair Subsidies. $1 million annual savings.

Eliminate taxpayer subsidies to the United Nations Intergovernmental Panel on Climate Change. $12.5 million annual savings.

Eliminate Market Access Program. $200 million annual savings.

USDA Sugar Program. $14 million annual savings.

Subsidy to Organisation for Economic Co-operation and Development (OECD).$93 million annual savings.

Eliminate the National Organic Certification Cost-Share Program. $56.2 million annual savings.

Eliminate fund for Obamacare administrative costs. $900 million savings.

Ready to Learn TV Program. $27 million savings.

Eliminate death gratuity for Members of Congress.

HUD Ph.D. Program.

Deficit Reduction Check-Off Act

TOTAL SAVINGS: $2.5 Trillion over Ten Years

My question, what is all this doing in the budget in the first place…?

Is there anything listed you cannot do without…?

ISL

Graywolf: Unfortunately, in a 15 trillion economy, 250 billion per year makes no real difference (silliness of some programs aside), in a blink all those savings could be funneled into our necessary military dominance of Alpha Centauri (eg a new war somewhere or other).

If your home is underwater by your annual income, saving the beer money makes no sense? I say drink, party, and (inevitably) default, at least you had fun.

Or get serious, tackle the big expenses first, then clean house. Its not as if we own our houses - the bank's do.

I will also note that the fed printed 4 to 9 trillion dollars and gave it to the banks so some very very wealthy gamblers would not take a haircut (and this is capitalism?). To my mind, something is really wrong in the republic.

LeaNder

good point Optimax, now it would be interesting to what exactly get's invested in the US trauma-healing-field, or is it interest groups joined-at-the-hips? ...

Good that walrus tells us:

"Hitler of course didn't even apply a coherent system of reason at all, which is why as Robert Paxton observed, Fascism doesn't export like Marxism did."

Facism did export well, and it may do so in the future in a slightly different dress.

optimax

Here is a NYT's interactive chart that allows you different choices for making tax cuts and increases. I went overboard and ended with huge surplus.

http://www.nytimes.com/interactive/2010/11/13/weekinreview/deficits-graphic.html

Basilisk

Isn't the title supposed to be "Chart Porn?" I'm just sayin'.

a

Plus, the items he puts a number to come to only $35.5 billion/year. They're mostly what people in G-8 would call "POM dust", trivial expenditures which even when combined amount to little. Over ten years they would come to $352 billion, far short of the $2.5 trillion he claims.

No wonder we are in the fiscal situation we are in. The people who try to pass themselves off as "fiscal conservatives" are really bad at math.

Norbert M Salamon

Greywolf, another take:

Eliminate all current wars: Afghanistan, Iraq, Somalia, Yemen, Lybia, War on Terror, etc WELL over 2 trillion in ten years.

Eliminate 60% of DoD budget 4 trillion dollar saving in 10 years.

Eliminate overblown international spying, do not need 16 competing bureaucracies, saving probably 500 millon over 10 years.

Eliminate Israel's support 30 billion over ten years

Eliminate tax deduction for foreign support donations [e.g. Israel's settlements] fairly large amount over 10 years

Eliminate 70% of DoE's budget for nuclrear arms 100 billion over ten years

Set marginal rates for all types of income to be equal in a progressive manner [e.g. 40 % above $500 000].

Write a new simple tax code -- billions saved on accounting for citizens, and billions saved by IRS in assuring enforcement per year.

Install single pay medical insurance a la France, sans insurance companies [except for extras as in Europe] 10 trillion dollars in ten years.

Increase Social Security contribution to all personal income, install mean testing for claw back a la Canada for instance.

If you need more ideas, will halp you any time.

Cheers!

Arun

I think before you decide what revenue/tax/spending etc. you want to work on, you have to decide what kind of country you want.

You could want to be Pakistan, where almost no one pays income taxes, where the government takes about 10% of the GDP in taxes which mostly goes to defence, and there are no public services worth the name.

You could want to a country like Mumbai, where high rise luxury apartments look down upon slums, and the gap between rich and poor is enormous.

You could want a country like the US in the 1950s which was essentially a middle class country.

The market operates/operated in all these places; what is different is government - its policies and its effectiveness.


R Whitman

HWGA

We are making a big fuss over which bit of electrons are in which column on the computer. Its not reality. On top of that we are trying to do a ten year linear projection in a non-linear world. Absurd.

Arun; I was a young adult in the US during the 1950's. It was not all that pleasant. In a choice between then and now, even though Im old and decrepit I will take"now". This country for all its faults is much better now.

HawkOfMay

Budget Puzzle: You Fix the Budget.

A bit old but this is an interactive graphic that allows you to solve the deficit with a few clicks. As mentioned in the original post, the policy is easy, the institutional politics is another story.

http://www.nytimes.com/interactive/2010/11/13/weekinreview/deficits-graphic.html

MRW

I like Norbert M Salamon | 19 July 2011 at 11:09 AM's list better than Greywolf's for this reason: the people Greywolf is harming in his list (not the entire list, mind you) pay taxes to get some of those services.

walrus

Garywolf; I'm afaid you fell for the little trap most people fall for: the "Over X years" trap.

Politicians love to talk big numbers, then they qualify them by saying "over Ten years" or suchlike, they sometimes also forget to add that the cuts or spending, may not even start for a year or Two - which makes their announcement even more tendentious.

What are needed are cuts to expenditure now. Tax increases now. Investment in infrastructure that will earn a return as well as get people working now.

Fiddling around the edges looking for discretionary spending to remove just does not cut it.

Farmer Don also made the excellent point that we have forgotten the opportunity costs that investing in war have inflicted on us. The money wasted in Iraq and Afghanistan could have been used to earn a return if it had to be spent at all.

VietnamVet

optimax and HawkOfMay,

I did the NY Times graphic. I balanced the current budget with tax increases and slashing defense spending but hardly made a dent in 30 years.

The budget crisis is the due to the victory of two special interest groups; oligarchs/defense contractors and the health/insurance industries. Winding down the wars and increasing taxes on the wealthy would solve the budget problems for now but the only way to still have a public health system and reasonable costs in 30 years is to enact a single-payer scheme.

The alternative is the GOP plan that shreds America’s safety nets. If the Tea Party succeeds, all but the wealthiest, will be like Black Males in the USA now. We will live longer in jail than on the outside.

Ramojus

How 'bout significant cuts in the "U.S. Gestapo", I mean the "U.S. NKVD", er... I mean the U.S. Dept. of Homeland Security !!!

Adam L Silverman

Graywolf: the issue here is not if you agree with CBPP's politics, but if they got the numbers right when they took the raw data from CBO and produced their charts. They did. And thankfully, as I was swamped all day, ISL and a got there to clarify it for us all early.

Adam L Silverman

Charles: I think you're missing something here. It was none other than Milton Friedman, father of neo-liberal economics (this doesn't mean what you think it means as neo-liberal economics isn't very liberal), monetary policy guru, intellectual mentor to the fresh water economists said "to spend is to tax". I'd like to recommend this explanation by Professor Delong:
http://delong.typepad.com/sdj/2008/08/draft-to-spend.html

Adam L Silverman

Optimax is spot on. Everyone is basically calling for cuts in discretionary spending, largely in regard to non security/non defense. This is the smallest portion of the budget. So we could gut it completely and it wouldn't make much difference. Additionally, one of the largest drivers of deficit and/or debt going forward will be health care costs in the US. And even though, based on the CBO estimates of the health care reform that passed at the end of 2009/beginning of 2010 those numbers come down, the issue is going to have to be revisited again.

Adam L Silverman

Basilisk: Yes, I was going for porn, however, the internet tradition (meme? protocol?) is to make it pron or even more accurately pr0n in order to not get what you're writing or posting blocked by a variety of security filters. I was trying to keep SST from getting put on the naughty list...

Adam L Silverman

Walrus has made an excellent point in response to Graywolf, but I want to draw it out a bit further. Not only is this the "over X years trap", but the current Congress can not restrict what a future Congress spends. This all changes if we 1) were to pass a balanced budget amendment (part of the House plan that will pass the House, is a really bad idea - here's Bruce Bartlett's, one of President Reagan's economics staffers, take on it: http://www.capitalgainsandgames.com/blog/bruce-bartlett/2312/phony-balanced-budget-amendment-debate) or 2) pass a hard debt ceiling. The latter won't pass either, is also a terrible idea, and in fact calls to abolish the whole thing are starting to arise.

Basically, if a current Congress could bind/restrict the spending power of a future Congress then the Congress that passed President Clinton's budgets, which combined with positive economic growth and a slight increase in marginal income tax rates during his presidency, would have been able to lock in what they had done and prevented the Congress in 2001 and 2003 from cutting taxes. This clearly was not the case, would clearly not work really well (especially in times of emergency or extremis), and is clearly not going to happen. I guarantee that the current deficit hawks and fiscal scolds will start to sing another tune if a Republican president is elected in 2012 with majorities in both chambers. We saw it under President Bush (43). All the current screaming meemees voted to raise the debt ceiling 7 times under President Bush (Boehner, Cantor, Ryan, McConnel, Kyl, etc) - clean bill, not strings attached. They voted to turn a projected surplus and balanced budget into unfunded deficit spending because a surplus in 2012 or beyond might hurt the economy. Now they're all screaming that not having a surplus is hurting the economy. While consistency may be the hobgoblin of little minds, it is clearly not a concern for our current batch of deficit hawks.

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