Posts tagged ‘Deficit’

November 7, 2010

The GOPs Fiscal Fradulance

by Vince Giordano

Time after time after time, I have listened to little Reps such as Marsha Blackburn and even big pols such as John Boehner attempt to explain their plans for GOP cuts. None have given any plans that are 1) clear 2) rational 3) beyond polemic rants against “government spending / waste” or 4) practical. I am sorry if you voted for this fiscal fraud party last week.

On a similar note, Andrew Sullivan notes that largely this entire midterm election season was about reigning in government spending when the GOP in fact promised to spend more!

November 7, 2010

Defense Spending Cuts

by Vince Giordano

“Republicans also should resist pressure to take all defense spending cuts off the table. Newly elected Sen. Rand Paul of Kentucky had the courage to say he’d go after defense waste during his campaign, and I look forward to working with him. We should start by taking common sense steps like freezing defense spending until the Pentagon can pass an audit and remove all nondefense spending from the Pentagon’s budget.

Our nation’s military leaders understand the need to cut spending. As Adm. Mike Mullen, chairman of the Joint Chiefs of Staff, said, “Our national debt is our biggest national security threat.” History shows that every nation eventually adopts the foreign policy it can afford. Taking defense spending off the table is indefensible. We need to protect our nation, not the Pentagon’s sacred cows,” – Senator Tom Coburn (R-OK).

Please let there be more rational Republican leaders out there!

October 27, 2010

The Elite Tea Party: Poll Commentary

by Vince Giordano

As one has said, the Tea Party is not the proletariat. A new CBS poll shapes up the Tea Party quite well. Here are a few eye poppers and my thoughts below them in bold type:

  • More than half say the policies of the administration favor the poor, and 25 percent think that the administration favors blacks over whites — compared with 11 percent of the general public.
    How in the world does this connect with their avowed religiosity and caring for the poor, the marginalized, and the cast aways?
  • “…despite their push for smaller government, they think thatSocial Security and Medicare are worth the cost to taxpayers.
    I have to chuckle and roll my eyes at this double standard.
  • They are far more pessimistic than Americans in general about the economy.
    Pessimism isn’t too far from it’s good old pal fear.
  • “He’s a socialist. And to tell you the truth, I think he’s a Muslim and trying to head us in that direction, I don’t care what he says. He’s been in office over a year and can’t find a church to go to. That doesn’t say much for him.”
    Hmm. If Barack Obama and his family “got a church”, would she believe that? Would she care about that? Would she even listen, or just discredit it? You’ve got to love the irrational approach of not even giving the other side a chance.
  • Tea Party supporters over all are more likely than the general public to say their personal financial situation is fairly good or very good.
  • They do not want a third party and say they usually or almost always vote Republican.
    Out the window goes the diversity make up card of the Tea Party.
  • When talking about the Tea Party movement, the largest number of respondents said that the movement’s goal should be reducing the size of government, more than cutting the budget deficit or lowering taxes.
    This is an interesting note. Could this explain why defense, Social Security, and Medicare are openly excluded by Republicans from being reformed?
  • But in follow-up interviews, Tea Party supporters said they did not want to cut Medicare or Social Security — the biggest domestic programs, suggesting instead a focus on “waste.”

    Some defended being on Social Security while fighting big government by saying that since they had paid into the system, they deserved the benefits.

    Others could not explain the contradiction.

    “That’s a conundrum, isn’t it?” asked Jodine White, 62, of Rocklin, Calif. “I don’t know what to say. Maybe I don’t want smaller government. I guess I want smaller government and my Social Security.” She added, “I didn’t look at it from the perspective of losing things I need. I think I’ve changed my mind.”
    Ah! I am so glad they actually asked people about this! Taxpayers have paid into numerous other programs but maybe they do not feel they directly and promptly benefit from them as they do with Medicare. Think of taxes paid for police or firemen versus prescriptions or emergency care. Segregation in our country, especially into the middle of the states, is alarming, hence the feeling of many that they are in their safe (white) neighborhoods (when in reality, ask the white Columbine residents how safe they feel). Take that mindset of possible danger out of mind, as it is a privilege, really, to not have that mindset, and look to their ages (middle aged and up) and what they bodies will need: health care.

September 30, 2010

Both Parties Fall Short With the Deficit

by Vince Giordano

Andrew Sullivan, Megan McArdle, Dan Drezner, et al chime in:

The current GOP leadership is absolutely not serious about it, will have no mandate to do anything serious if they win the House this fall, and no-one, Democrat, Republican or Independent, should be under any illusions about that. That includes those well-meaning members of the tea-party movement who somehow think that electing the same Republican party will help us. Remember who told us: “deficits don’t matter.”

That was Karl Rove and Dick Cheney. Rove and Mary Cheney are helping to organize and fund the GOP campaigns.

This all makes me disillusioned towards politics but somewhat removes me from its tentacles. I don’t have to feel loyal to one side or standard, and that is nice because both have dropped the ball with the deficit, almost equally in my eyes.

July 15, 2010

Continuing the Never ending Discussion

by Vince Giordano

Jonathan Chait continues on with the discussion over accusations made by Barack Obama towards George W. Bush and the past decades fiscal issues:

The best way to compare deficits over time is as a share of the economy.  This first graph shows budget deficits during President Bush’s tenure.  On this graph deficits are positive, so up is bad.  The dotted green line shows the average deficit since 1970 for comparison (2.6% of GDP).

This graph does not show “a decade of spiraling deficits.”  It instead shows eight years of deficits averaging 2.0 percent of GDP, followed by a horrible ninth year as the markets collapsed and the economy plunged into recession.  (Budget wonks who want to understand why I think we should look at nine years for a Presidency rather than eight can read this.)  Even 2008’s bigger deficit than 2007 can be mostly explained by a revenue decline as the economy slipped into recession pre-crash.  Before the crash of late 2008 President Bush’s budget deficits were 0.6 percentage points smaller than the historic average.  Deficits did not “spiral” during the Bush presidency or the decade.  The bumped around the historic average, then spiked up in the last year.

It’s true that it’s not literally accurate for Obama to accuse the Bush administration of presiding over a decade of spiraling deficits. The Bush deficit rose, then fell a bit at the peak of the economic cycle, and then shot upward once again as the economy crashed. Likewise, it would be unfair to describe Kirstie Alley as having her weight spiral upwards, when it fact it has risen asymptotically upward. Hennessey has a point here. A tiny, tiny point, but a point nonetheless.

Where Hennessey goes badly wrong is in his attempt to defend the responsibility of Bush’s fiscal policy. Hennessey argues that deficits under Bush were not that high until the end, when they got catastrophically high, but the high point was he fault of the economic crash rather than Bush’s policies. The problem, of course, is that Bush inherited a very sound fiscal position. At the peak of the Clinton-era economic boom, the budget was running a surplus equal to 2.4% of GDP. At the height of the Bush-era economic cycle — “boom” isn’t really an accurate description — the budget ran a deficit of 1.2% of GDP. Which is to say, Bush’s policy of launching two wars, a series of major tax cuts, an expansion of defense and homeland security spending and a prescription drug benefit without any offsets whatsoever structurally increased the deficit by about 3.6%. (Note that this argument assumes that Bush bears zero blame for the economic crisis that concluded his presidency.)

July 12, 2010

Should we create Jobs or Balance the Budget?

by Vince Giordano

David Brooks and Gail Collins ask this timely question:

But the lesson of financial crises is that they lead to huge spending run-ups and very often inflation, defaults and general discord. Everybody is citing Kenneth Rogoff these days, who co-authored that history of 800 years of financial crisis. I notice his rule of thumb when it comes to stimulus is “Less is More.”
Besides, I’m hung up on my lack of faith in the idea that stimulus actually works. My impression is that before the crash most economists thought monetary policy was the way to counter economic cycles and that fiscal stimulus tends to be mistimed or ineffective. This was the conclusion I took from a long history of stimulus attempts by Christina Romer, now the Obama economic adviser.
Now, suddenly faith in stimulus is back, not because of new evidence but simply because monetary policy alone hasn’t produced job growth. This, of course, still doesn’t mean than stimulus works in the short term.