Wednesday Flash Fun for Policy Wonks

June 30, 2010 7:28 AM

After America Speaks gave 3500 people the opportunity to address the budget deficit, the CEPR has invented its own play-at-home version, the Deficit Calculator.

Benjamin Page and Lawrence Jacobs: Understanding Public Opinion of Deficits and Social Security (pdf)
Archon Fung: The Left Should Learn to Trust Americans

posted by anotherpanacea (27 comments total)

This "deficit calculator" is garbage: the only reduction options given are things like "freeze discretionary spending at 2013 level" and decreasing the COLA for Social Security. What about ideas like "Eliminate the departments of Agriculture, Education, and Health and Human Services."

Or "Eliminate all foreign aid", "Phase out Medicare and Medicaid", "Scale back DoD by 50%".

Tweaking COLAs is not going to eliminate the deficit; fundamentally addressing what is and is-not a proper function of government will.
posted by Teppy at 7:46 AM on June 30, 2010 [2 favorites]

Two biggest changes (that I understood) I found were "Quick end to Iraq/Afghanistan wars" and "Public Option".

Yep, pretty much.
posted by DU at 7:49 AM on June 30, 2010

What about ideas like "Eliminate the departments of Agriculture, Education, and Health and Human Services."

Or "Eliminate all foreign aid", "Phase out Medicare and Medicaid", "Scale back DoD by 50%".

Oh, it's one of THOSE threads. Let's also shoot all the poor. In 5 years, we'll forget it happened and think how rich we'll all be! On average!
posted by DU at 7:50 AM on June 30, 2010 [4 favorites]

"Phase out Medicare and Medicaid"

I seem to recall something about promoting general welfare somewhere, but I could be wrong.
posted by kmz at 7:51 AM on June 30, 2010 [2 favorites]

Phasing out Medicare and Medicaid would cost more, not less. Don't you get that when other people get sick, you're more likely to get sick, too?
posted by Michael Roberts at 7:53 AM on June 30, 2010

FWIW America Speaks back...

I mean as a piece of scare propaganda it was slickly done, but less than effective, even with that the recommendations included an awful lot of tax hikes, and fairly moderate spending cuts.
posted by edgeways at 7:55 AM on June 30, 2010

And they can't work and they visit emergency rooms they can't afford and so forth and so on.

Fiscal Conservatives Understand Neither Morals Nor Economics, Film At 11.
posted by DU at 7:55 AM on June 30, 2010

Don't you get that when other people get sick, you're more likely to get sick, too?

Typical collectivist tripe.
posted by joe lisboa at 7:56 AM on June 30, 2010

Negotiate medicare drug prices: -2.1 TRILLION

Remind me again, aside from pure corporate welfare, why on earth is this not already happening?
posted by mullingitover at 7:58 AM on June 30, 2010 [2 favorites]

obligatory 538 link
posted by edgeways at 7:58 AM on June 30, 2010 [1 favorite]

A real incorrect assumption in this calculator is that we have to cut our way out of financial woes. Why can't we put taxes back where we once had them, where others still have them and where they belong?

(Also also, perhaps "economic growth" should not be deemed an absolute good. Cancer much?)
posted by DU at 8:05 AM on June 30, 2010 [2 favorites]

How about repealing the Bush Tax Cuts? I seem to remember having no deficits before we enacted those. We could try not invading other countries for a while too.
posted by octothorpe at 8:05 AM on June 30, 2010 [3 favorites]

Keynes by way of the Left Business Observer:

We cannot, as a community, provide for future consumption by financial expedients but only by current physical output. In so far as our social and business organisation separates financial provision for the future from physical provision for the future so that efforts to secure the former do not necessarily carry the latter with them, financial prudence will be liable to destroy effective demand and thus impair well-being....

posted by enn at 8:06 AM on June 30, 2010

How about repealing the Bush Tax Cuts?

That's in there: it's the option under "taxes" called "Allow All Cuts in Marginal Tax Rates to Sunset" and "Do Not Modify Estate and Gift Tax Rates."
posted by mr_roboto at 8:24 AM on June 30, 2010

I was able to get things to 15% of GDP.... get rid of a lot of defense toys, stop the occupation, etc.

Now if they would let you do things like End Prohibition... then we could talk some serious savings.
posted by MikeWarot at 8:31 AM on June 30, 2010 [1 favorite]

That's weird, the first time I visited that box didn't scroll so I didn't see the tax section.

Taxing financial speculation raises over a trillion dollars, gets money back from parasites AND drives the right behavior (long-term investment vs short-term profits). Naturally we aren't doing that now.
posted by DU at 8:31 AM on June 30, 2010

Don't you get that when other people get sick, you're more likely to get sick, too?

Typical collectivist tripe.

I think a better argument for medicare/medicaid is that it increases the odds that people will proactively seek medical treatment, and attacking health problems upstream is far more cost-effective than addressing them in their late stages.
posted by tybeet at 9:58 AM on June 30, 2010

Means test social security (Bill Gates not eligible sort of thing) and delay the payment of civil service pensions until the civil servant reaches the standard retirement age. A mid level civil servant type at age, say, forty five, should be able to find a real job for a second career.

Medicine will be a financial no-hoper so long as doctors want serious money and patient think that death is optional.
posted by IndigoJones at 10:25 AM on June 30, 2010

The real thing missing from this is "Fix unemployment". One of the reasons the deficit is so high is because so many people are out of work, and therefore, not paying taxes. Fixing unemployment would fix about half of the problem, from what I understand.

One thing that's interesting is that in survey after survey people actually prefer tax hikes on the rich in order to solve the deficit. That's the #1 thing people (on average) want to do.

But of course since people obsessed with tend to be on the rich side, they almost always promote cuts first, list cuts first, and so on.

--

As far as social security goes, one way to 'save' it (it's not in much danger) would be to lift the cap. Right now only your first hundred thousand dollars are taxed for social security, but raising the cap would bring in more revenue and therefore 'save' it.

Or we could just stop pretending that SS is separate from the federal budget and just pay for it with 'regular' tax money (which would go up to replace the old FICA charge) and then pay out based on how much you earned over your lifetime.

Phasing out Medicare and Medicaid would cost more, not less. Don't you get that when other people get sick, you're more likely to get sick, too?

It depends on what they're sick with. I don't think the majority of medicare and medicate spending go to communicable diseases, and we could always have a system to help people sick with anything contagious.

That said, it's unlikely that posters over 65 would go for that. "A guaranteed retirement" is something that provides economic security to everyone in the U.S, except rich people and their sycophants who think they'll just be rich and therefore have nothing to worry about.
posted by delmoi at 10:38 AM on June 30, 2010

There are other revenue-raising items in the list. However, simply raising marginal tax rates on the upper income brackets isn't offered, which is the biggest signal of the creators' slant.

This one puzzled me:

Federal Reserve buys and holds $2 trillion in debt.

How does that in any way reduce the debt? Isn't that just moving it from one pocket to the other?
posted by Mental Wimp at 10:58 AM on June 30, 2010

Teppy: "Tweaking COLAs is not going to eliminate the deficit; fundamentally addressing what is and is-not a proper function of government will."

By checking all of the defense cuts, making social security tax rates more progress, negotiating drug prices, taxing carbon and financial speculation, I managed to cut the deficit $9.4T by 2020. This calculator doesn't even give me the real defense cuts I'd be looking for. Turns out these are more than just tweaks.
posted by l33tpolicywonk at 11:16 AM on June 30, 2010

My problem with calculators like this is that our budget woes aren't a technical problem - they're a political one. For ever cut you try to make in this system, it should show how many spending projects you need to approve to create jobs in states for key senatorial votes.

Or, better yet, at the bottom should be a tally of your campaign fund and your opponent's. Try seeing how much cutting you can do in defense and remain electable.
posted by heathkit at 12:35 PM on June 30, 2010

My problem with calculators like this is that our budget woes aren't a technical problem - they're a political one.

To be fair, calculators like this (and 08's Budget Hero) are designed to make that fact clear. Otherwise, people think that the budget is not just a technical problem, but an insurmountable one.
posted by anotherpanacea at 1:16 PM on June 30, 2010

This is all a crock of shit. And I say that as a liberal. When you cut something, like military spending (and boy am I for that!), or whatever else, you are not affecting the deficit at all in the way that's portrayed - people who lose these jobs both directly (military) and indirectly (employed by the military-industrial complex), have to be transitioned into something productive, and that takes time, and money (even welfare!) and not all will make it even so. Not to mention the downstream economic effects of huge industries and infrastructure that's built around them and the civilian economy that's grown around that (ever wonder why those congresscritters fight base closures?). It's a wrenching transition. I'm not saying it shouldn't be done - absolutely it should. All I'm saying is that you won't see the savings immediately or in fact in many cases not all the savings or even sometimes any. That's what's stupid about calculators like this. It's building imaginary castles in the sky - not much relevance to the economics of building real castles down here on earth. But it's a game politicians can exploit, so carry on, I suppose.
posted by VikingSword at 4:03 PM on June 30, 2010

Everyone, send money to:

Treasury Department
Attn: Dept G
Bureau of the Public Debt
P.O. Box 2188
Parkersburg, WV 26106-2188

Or quit bitching. I sent my $5.
posted by cjorgensen at 4:35 PM on June 30, 2010

"Fix unemployment".

When George McGovern retired from the senate and went into the real world, he found out first hand just how tough it is to run a business and employ people.

I know some start up guys who are holding back plans right now largely because they don't know what they need to budget for health care. Because of these new government initiatives.

Which gets us back to the calculator. Not sure that government can do much to "fix" unemployment, unless it is to listen to the sadder and wiser McGovern. Frankly, it always amazes me that people start up companies at all.

But Vikingsword pretty much has it. It's way easier to get into this kind of toilet than it is to get out.

Here's a game the actuaries made up to solve social security.
posted by IndigoJones at 4:54 PM on June 30, 2010 [1 favorite]

Here's a game the actuaries made up to solve social security.

Wow; I actually learned something by playing that. I did not realize government workers weren't included in Social Security. I wonder how much sense it would make to wrap them into the program and cut back public employee pensions by a commensurate amount. This strikes me as a hugely difficult accounting problem, but it seems like it might be able to save state and local governments a lot of money in the long run.
posted by mr_roboto at 11:42 PM on June 30, 2010