Budget

It's Time To Kick Our National Spending Habit (And Pick Up a New One)

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I can has deficit reduction?

Over the last few weeks, the White House and its supporters have been pushing hard on the idea that health care reform really is fiscally responsible, mostly in hopes of winning over wavering moderate Democrats in the House. I think their budgeting claims are somewhat suspect, but, using an illustration about a debt-ridden, Starbucks-addicted vacationer (just read it), Harvard econ professor Greg Mankiw makes a really good point about how even if one accepts that they'll successfully follow through on all the cuts they propose, the bill would still make the long-term fiscal situation worse:

Even if you believe that the spending cuts and tax increases in the bill make it deficit-neutral, the legislation will still make solving the problem of the fiscal imbalance harder, because it will use up some of the easier ways to close the shortfall.  The remaining options will be less attractive, making the eventual fiscal adjustment more painful. [emphasis added]

The program cuts and taxes revenue-raising mechanisms being proposed aren't being used to right the existing fiscal situation; they're being used to pay for an additional entitlement (primarily insurance subsidies and a Medicaid expansion). If you really can squeeze all that money out of the system, why not put it toward meaningful deficit reduction?

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  1. The alleged deficit neutrality of the healthcare bill reminds me of an episode of Married With Children. Steve and Marcy con Peggy into buying a PC (even though nobody in the house would use it). When they return from the store, Steve grandly announces that he “saved” Al money, by passing up the $1200 model and instead getting a discount on the $2100 dollar model; “I saved you two hundred bucks!”.

    Peggy: “Which I used to buy this dress…so you could say the dress was free!”

    1. And we all thought Married With Children was just crude nonsense. Peg was the thin prototype of jolly and fat economic adviser Christina Romer.

  2. From the tax collector:

    Sorry, kitten in the picture, you haven’t paid your taxes yet.

    Tax on 25 cents = 5 cents
    SS tax = 2.5 cents
    State tax = 2.5 cents
    Sales tax = 4 cents
    Cute tax = 6 cents
    Late filing penalty = 10 cents

    We’ll take the quarter. Plus you owe us another nickel.

    1. LOL, plainly what the kitten do wif it is hide it in the litter box!

  3. If you really can squeeze all that money out of the system, why not put it toward meaningful deficit reduction?

    Good one, Peter.

  4. Along the same lines, if there is so much obvious waste in our existing programs, why not start health care reform with a bipartisan bill that gets rid of the waste? That should be easy, right?

  5. Ah, Peter Suderman, why do you want to kill sick people?

    1. (We all know that defeating the health-care bill will lead to millions of deaths)

      1. Oh, so if we pass the health care bill we can expect to see all kinds of bullshit stats about lives saved, just like we do with jobs saved?

      2. Max it is a FACT that without healthcare socialization, everyone alive today will die.

  6. True, but you know as well as I do that it will never happen!

    Jess
    http://www.real-anonymity.eu.tc

  7. “If you really can squeeze all that money out of the system, why not put it toward meaningful deficit reduction?”

    Because if we use it for insurance subsidies and Medicaid expansion, Matt Welch won’t have to go to France to get his prostate polished. Sounds good to me.

  8. ” If you really can squeeze all that money out of the system, why not put it toward meaningful deficit reduction?”

    Because the Democrats have never given a damn about the deficit. It’s only an excuse they dredge up whenever they want to raise taxes.

    What they REALLY care about in this case is forcing the entire population onto a major new wing of the welfare plantation so that everyone will be as dependent on government as possible and thereby insure a permanent power base for themselves.

    1. Neither party gives a sh!t about the deficit or the debt until the other side is the one proposing new spending.

    2. Which is why I think the govt welfare program should be a labor camp. If you want welfare, you got to work a really crappy minimum wage job on a farm that no one else wants. Its LITERALLY a welfare plantation. Added bonus: It will reduce illegal immigration too.

      1. Didn’t they experiment with that a little recently? I don’t mean the labor camps, but I seem to remember them having welfare recipients out picking up litter and stuff. It didn’t go over well…they (the recipients) likened it to modern slavery.

        1. I’m of the mind that there should be no free handouts. If you want to eat, you work. You can be on the welfare system, but you have to work to get your pay. And yes, it will be tedious and toilsome work that noone else wants to do. The system will make time for you to find a new and better job in the private sector, but as long as you’re on the dole you’re peeling potatoes and picking up trash. You’ll get very basic health care, enough money to eat and pay rent, and maybe even some child care.

  9. This guy wrote my Macro textbook.

  10. Do you think we could hire Dave Ramsey to balance our budget? It’d be great, if only to hear him repeatedly call congress, “Stupid!”

    1. And he would probably start by cutting up their credit card.

  11. For a great short video on Obama’s proposed budget cuts, look here: http://www.wimp.com/budgetcuts/

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