Government Spending

Jon Chait Watch 2: Yes, Trimming Spending Every Year Means Reduced Expenditures in the Future

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Over the past few days, The New Republic's Jonathan Chait and I have engaged in a back-and-forth over the Reason.tv video "Budget Chef Explains How to Balance the Budget W/O Raising Taxes" and the article upon which it's based, "How to Balance the Budget Without Raising Taxes," which I coauthored with Mercatus Center economist and Reason columnist Veronique de Rugy. Those two pieces argue that the federal budget can be balanced in the year 2020 by reducing current outlays to 19 percent of Gross Domestic Product, the amount the Congressional Budget Office (CBO) estimates government revenue will be then if current tax policies are extended.

If you're interested in catching up on the cyber-brouhaha, start with Chait's latest bit, in which he accuses me of innumeracy, "tonal posturing," and certifiable delusions. To be fair to Chait, he pretty much talks this way about everyone.

Indeed, he is given to characterizing differences of opinions not in terms of disagreements but in terms of psychological dysfunctions and moral failings. For him, to believe in balancing budgets with revenues equal to 19 percent of GDP is evidence of "debilitating pathologies" and to write expansively (and I hope, somewhat entertainingly) in reply to Chait produces "word salad," a condition common to various mental illnesses. This is a reflexive debating tactic for Chait, who has recently insisted that opposition to the individual mandate in Obama's health care plan is "a sign of right-wing hysteria." If people who disagree with him are not in need of electroshock or a spray of seltzer to the face, then it is only because they are "total hacks," as he grossly mischaracterizies my coauthor Veronique de Rugy (who, he says, practices "voodoo economics" and "goes all Laffer Curve" at the drop of a hat). He winds up his critique with sage career advice for yours truly:

I really advise Gillespie to confine himself to subjects he understands (motorcycles? picking up chicks with a snap of the fingers?) and find a fiscal writer who is able to make the libertarian case from factual premises.

This isn't "tonal posturing," it's ideological scoliosis and he's welcome to embrace its disfiguring effects on the mind as much as he wants.

I'd like to address one charge that Chait makes, that I "genuinely [do not] understand the article he co-authored." The crux of it for Chait is that I either pulled a fast one in the Reason.tv video or played Lennie to Veronique's George because I did not explicitly mention the compounding of annual budget cuts in the march to a balanced budget in 2020.

Except that I did:

As I say around the 1.20 minute mark, "By making small, systematic cuts in the fatty parts of the budget over the next decade, we'll compound all our savings."

Let me, for the last time (I promise!), lay out the crux of the matter.

Taking a page from the charge given by the president to his commission of fiscal responsibility and reform, Veronique and I wanted to see how we might balance the budget without increasing tax rates and other revenue mechanisms in 2020. According to the CBO's alternative scenario (the one prized for its realism), government revenue will be about 19 percent of GDP; this figure keeps the Bush tax rates, applies ongoing patches to the AMT, etc. Using CBO estimates of economic activity, that means all government spending cannot exceed about $3.7 trillion in 2020 (all amounts are in 2010 dollars). However, the CBO projects that, given current growth trends, etc. that the federal budget will be $5.1 trillion in 2020.

Which means that we need to cut around $1.3 trillion in spending (there's some rounding involved, that's why it's not $1.4 trillion). To effect this sort of cut in a single year would mean a cut of around 25 percent, which is not only politically impossible but immensely disruptive. So Veronique and I factor in $130 billion cuts in each year's projected budget, each of which is expected to grow. So most of the "cuts" in fact come from anticipated increases in spending, which is one of the reasons why the successive cuts of pork in the video look roughly similar (Dear Mom and Dad in heaven, did you ever think you'd witness your youngest son write such a sentence?). A given year's cuts (obviously) get rolled into the next year's and start a new baseline on which continuing cuts or growth is predicated. That is how spending gets reduced over time. This is not pulling a fast one, it's systematically phasing in a reduction in government outlays from at least 23.5 percent of GDP to match a plausible level of revenue (though as Veronique and I point out, still above the historical average since 1950).

Here's Chait:

It is a 24% cut. It involves significant changes in the scope of the government, not just trimming tiny bits of waste. The ideological merit of those cuts is not what I'm disputing.

Indeed, it's a significant cut, phased in over a decade, from where we will be if we stay on auto-pilot versus where we can afford to be. The starting point of the video and the article is precisely that, as we like to say around Reason, We Are Out of Money and if we expect to right the ship of state (at least financially), we need to start bailing water now. On an annual basis, these are not big cuts. If we cannot pull $130 billion in trims from more than the $3.6 trillion in spending (roughly 3.6 percent) CBO estimates the 2011 budget will be, we should give up now as a country. And if we can't keep doing that until we get back to a realistic match between money in and money out, we're totally screwed. And so are our kids, and their kids, etc.

Let me reiterate two points that shouldn't be forgotten in any of this.

First, federal spending has been absolutely out of control for the past decade, rising 60 percent in real terms since Bill Clinton left office (and let's face it, we've got virtually nothing to show for it other than bills).

Second, the 19 percent revenue limit Veronique and I use isn't arbitrary. If the past is any indicator, it's what the feds will have in their pockets for the foreseeable future (if they're lucky). Despite occasional upticks, attempts to goose that number up have not worked over the long haul. So plans to balance the budget that rely on a number higher than that are almost certainly doomed to failure.

Does getting to 19 percent involve "significant changes in the scope of government," as Chait argues. No, at least as it affects your daily life. Again, think back to the Aughts and the out-of-control spending first under Bush and now under Obama. There is precious little to show for it: two seemingly endless wars, free prescription drugs for relatively wealthy seniors, increased federal control of education without any results to speak of… I could go on.

And then think back to the second Clinton term and the first couple of years under Bush, when government outlays were in fact in the 19 percent range.

If that's a world you can live in, keep coming back to Reason.com (you'll even get arguments about the world would be better still if the government had far less control of your money and your life). If it's a world that only a psychopath could stand, I suggest you exclusively read The New Republic.

From what I understand, Veronique de Rugy will be posting a response of her own at National Review's The Corner, where she blogs. When it's up, I'll put up a link here.

Update: Here's Veronique de Rugy's response to Jonathan Chait's posts.

Even More Update: Jon Chait responds to the responses (including a post by Will Wilkinson about regulatory capture).

NEXT: Letters

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  1. I love you Nick (even though leather is murder) but to enter a back-and-forth with Jonathan Chait is to lose it. The man emits ad-homs like a stinkbug makes stink.

    1. to enter a back-and-forth…sounds like a harmonious relationship

    2. Well, the key part of Chaite’s ranting is “I don’t understand”. But he’s not going to keep his writing gigs by boiling it down to such a simple fact.

      And without people to fill up column inches, The Nation’s not going to be around long as anything other than an accumulation of cheap super shopper ads sent out at bulk rate postage, so they hire guys like Chaite, who, like their readership, doesn’t understand, but in a Jerry Springer Fan sort of way are entertained, thus they can charge more for their main revenue generator – the ads.

      Nick jumps into this, if not with abandon, but for the value added multiplier effect. As odious as the task of teaching a chipmunk quantum physics may seem, there is a method to the madness, making Nick somewhat like the hard working folks that Mike Rowe features on “Dirty Jobs” – slogging away clearing poop from the pump shaft, or artificially inseminating the turkeys while they spray poop all over him, or running the Bobcat under the factory chicken farm so the poop can be collected and composted to add value. Stinky, sweaty, disgusting work, but he does it. Day in, and day out. With relative good humor, and steadfast determination. It is an elevating, and humbly enobling task, to be sure – and it sets him apart – from us at any rate. Which is why he’s The Jacket, and running the joint, and we’re sitting around in our underwear on the weekend following his exploits.

      1. Chait writes for The New Republic, but otherwise you are probably right.

        Bonus points for guessing that I’m sitting around in my underwear. Can you guess which color?

        1. Brown? That would be shit brown, of course.

          1. Not yet. I’ll keep you updated after I eat this plate of Tuna Tacos.

            1. Epi’s pretty snobbish to folks that just aren’t as in to Scooby Doo footie jammies as he is. . .

              1. I love my Scooby Jammies, you asshole! They have the trap door for poopies!

        2. As I read this, I wondered yet again why Chait writes for any publication that values literacy and reasoned discourse, let alone TNR. I’ve found that TNR has reasonably sane liberals writing for it for the most part, Chait obviously not being one of them. He really does need to shuffle on over to Katrina’s cesspit The Nation…it’s much more his speed.

          1. Yeah, fail with keeping the cesspits straight. Bad on me.

          2. Because for all his insane discourse, Chait’s actual policy prescriptions are fairly centrist. (Yeah, he hates libertarians, but so does, say, David Frum.)

            He actually fits well within one of TNR’s long-standing traditions– endorsing center-right ideas while insisting that Democrats be the one to implement them, because Republicans are evil.

            Sometimes I feel like TNR tries to insulate itself from charges from the Left of being too right-wing by hating Republicans (and others not of the Left, like libertarians) far out of line with what mere policy preferences would indicate.

        3. If you’re anything like Nick Gillespie, it’s a black pleather posing pouch, size XXXS.

          1. Is that Lispish for “pleasure posing pouch”?

      2. As odious as the task of teaching a chipmunk quantum physics may seem, there is a method to the madness, making Nick somewhat like the hard working folks that Mike Rowe features on “Dirty Jobs” – slogging away clearing poop from the pump shaft, or artificially inseminating the turkeys while they spray poop all over him, or running the Bobcat under the factory chicken farm so the poop can be collected and composted to add value. Stinky, sweaty, disgusting work, but he does it. Day in, and day out. With relative good humor, and steadfast determination.

        The chipmunk part made me LOL. And it’s Chait, and as others pointed out, TNR, not The Nation. And yes, good humor. Always good humor. It’s a handstakingly hilaripus job.

      3. Underwear is for the rich!

    3. The man emits ad-homs like a stinkbug makes stink.

      ‘Tis the language of the interblogs. Ask Episiarch.

    4. Why bother with the Steve Glass/Zombie Dog rag anyway?

  2. He obviously has a crush on you, Nick. Look at how he talks about how easy it must be for you to pick up chicks on a motorcycle. This is just his awkward way of expressing that.

    1. I think he was equating Nick to a certain Henry Winkler character that lived and picked up chicks in the midwest while living near Mr. and Mrs. C.

    2. I think he was equating Nick to a certain Henry Winkler character that lived and picked up chicks in the midwest while living near Mr. and Mrs. C.

      The leather jacket does it.

  3. Chait sounds like a sociopath. Many lefties are.

  4. From TNR comments:

    “It is pretty funny that a magazine called “Reason” would take on faith, the premise that tax revenues cannot exceed 18% of GDP.”

    Drink!

    1. would take on faith, the premise that tax revenues cannot exceed 18% of GDP.

      huh?

      how is it faith to look at the past 50 years and see that revenues have not ever been substantially above 18% for any sustained period of time.

      In fact isn’t this the exact opposite of faith? Looking at past evidence and deducing a limit from past performance?

      1. Earth to Josh! Earth to Josh!

        There are other nations besides the USA!

        Earth to Josh!

        Earth to Josh!

        Any halfway “reasonable” person would check to see what goes on in other nations.

        1. Looking at those other countries, the first thing that you’ll notice is a lower overall growth rate. THe only countries that are doing well with a high tax rate are small countries with connection to some exploitable amount to oil. Or in the case of Sweden, they border a country awash in oil wealth and have been deregulating economic activity and lowering taxes in recent decades.

          I’m sure that you could get above the 18-19% threshold, but the taxes that you’d have to pass to get above that threshold become higher and higher and more destabilizing. THink of it this way: it is easy to raise the first 10-15% of GDP through taxes that people will reasonably pay, but after that, people become more adept at shifting money into other areas, hiring armies of accountants, and taking advantage of deductions. Suddenly, you can’t just raise taxes by 5%. Now you have to double some tax rates just to collect 25% more. Once again, I’m not saying that it is impossible to get above 18% of GDP into government coffers, but there is a point of diminishing returns.

          I’m not trying to be some “right wing zombie” here. THe evidence that tax receipts have bobbled around 18% of GDP while the tax rate has changed dramatically is clear evidence that there is more going on than meets the eye. I’m no genius, and I’m not trying to “prove” you wrong. I simply believe that you can’t just scoff at these facts.

          1. I looked up the list of nations by taxation as a percentage of GDP, but it is hard to extrapolate anything from the data, as every nation is showing abnormal statistics due to the recession. For example, it says that total government revenue at all levels amounts to 28% of GDP for 2009. Obviously, this collection rate was much higher before the recession.

            This raises another good argument why we should be focusing on spending cuts rather than tax increases. Tax revenues are not guaranteed no matter what the tax rate is. Simple changes to the economic picture can dramatically change what the government rakes in. GDP fell only by a few percentage points during the recession, but government revenue at all levels fell to between 60 and 70% of their pre recession take. Truly, spending should be the focus of any financial plan.

            Tax increase can be economically damaging, and they may not even solve the budge problem. THey might only be a temporary solution, and they tend to bring in less and less money as diminishing returns kicks in. Start with the spending. If we reach a point where spending can’t possibly be cut anymore, than we can look at tax increases.

          2. twelge, there is no statistically significant relationship between tax rate and GDP either for the 50 states vs each other or the OECD nations. In fact, for the 50 states, higher tax rates correspond to higher GDP, not the reverse, though the relationship isn’t significant. If you track the net tax rate in the US vs time, you find that is also has an inverse relationship to GDP growth – higher taxes correlate to higher growth, not the reverse. Anyone honestly looking at the data would conclude that there just isn’t any compelling evidence that tax rates within any reasonble range have much of an effect on the economy either way.

            A second complication is that when conservatives mine this data, they often mistake the effects of deficit spending with the effects of tax cuts. They are usually coupled together, and there are precious few examples of real tax cuts that are tied to a spending cut of the same size. You can always goose the short term economy by borrowing money from abroad and dumping into your home economy. However, unless you buy something that generates income with that money, you economy will shrink as you pay the money back and negate the short-term burst from your initial deficit spending.

            I think you are also deliberating ignoring how deductions affect the tax rate. Yes, the top marginal rate fluctuates a lot, but no one pays that rate. The real tax rate has almost nothing to do with that top marginal rate. Our revenues haven’t varied that much because we haven’t really made many big changes to our tax code. On decadal scales, we have increased the payroll tax and cut income, corporate and capital gains taxes slightly, and to what should be to no-one’s surprise, this made the rich get rich faster than everyone else.

            Your “dramatically clear” evidence doesn’t stand up to even minimal scrutiny, in my opinion. There is simply no significant relationship between economic performance and the overall tax rate, unless you are at either extreme of anarchy or communism. There is a broad space in the middle where we are free to operate.

            As a final point, GPD is a shitty measure to work with. It is incredibly laden with broken windows, and suffers severely from the problem that you can only optimize what you can measure.

            1. “twelge, there is no statistically significant relationship between tax rate and GDP either for the 50 states vs each other or the OECD nations. In fact, for the 50 states, higher tax rates correspond to higher GDP, not the reverse, though the relationship isn’t significant. If you track the net tax rate in the US vs time, you find that is also has an inverse relationship to GDP growth – higher taxes correlate to higher growth, not the reverse. Anyone honestly looking at the data would conclude that there just isn’t any compelling evidence that tax rates within any reasonble range have much of an effect on the economy either way.”

              I’m sorry, but when you look at the data, the nations with the highest tax rates tend to have lower ppp adjusted per capita incomes. This is ESPECIALLY true when population sizes are taken into account. True, states within the US tend to flip this logic on its head, but that is only because the difference in tax rates between states is marginal at best. States within the USA derive most of their differences in wealth from geography and history. Can you show me a country that has tax rates greater than the USA and a higher PPP adjusted per capita income (excluding countries with less than 35 million people)? As far as GDP growth rates are concerned, did you separate out the countries with high taxes that are experiencing high growth due to gradual tax decreases and deregulation (Sweden for example) or countries that are growing quickly only because of their relative catch-up advantages which result from comparatively low income rates?

              The differences in growth rates between states is not static either. For some periods, higher tax states grew faster. For others, lower tax states grew faster. Texas grew faster than California for a huge chunk of the 90’s, then when the dot com bubble reached its apex, California steamed ahead. When the housing boom started, California expanded the gap even more. However, since 2005, Texas has been leaving California in the dust statistics wise.

              “A second complication is that when conservatives mine this data, they often mistake the effects of deficit spending with the effects of tax cuts. They are usually coupled together, and there are precious few examples of real tax cuts that are tied to a spending cut of the same size. You can always goose the short term economy by borrowing money from abroad and dumping into your home economy. However, unless you buy something that generates income with that money, you economy will shrink as you pay the money back and negate the short-term burst from your initial deficit spending.”

              I’m not sure how this has anything to do with what I typed. Tax cuts that aren’t paid for with spending cuts ARE deficit spending. Plain and simple. THey are the same thing, and I dislike both. However, this is diverting the conversation into a new area.

              “I think you are also deliberating ignoring how deductions affect the tax rate. Yes, the top marginal rate fluctuates a lot, but no one pays that rate. The real tax rate has almost nothing to do with that top marginal rate.”

              No, it was the cornerstone of my thesis. “THink of it this way: it is easy to raise the first 10-15% of GDP through taxes that people will reasonably pay, but after that, people become more adept at shifting money into other areas, hiring armies of accountants, AND TAKING ADVANTAGE OF DEDUCTIONS.”

              “Our revenues haven’t varied that much because we haven’t really made many big changes to our tax code.”

              THat’s debatable. Highly debatable.

              “There is simply no significant relationship between economic performance and the overall tax rate, unless you are at either extreme of anarchy or communism. There is a broad space in the middle where we are free to operate.”

              Except the UK and France both have a PPP adjusted per capita income below 35,000 dollars a year compared to 47,000 dollars a year for the USA. Both countries collect only a slightly higher percentage of GDP than we do during normal economic conditions. THe only high tax countries that even come close to the USA in terms of PPP adjusted per capita income are countries like sweden and norway. Sweden and Norway combined have a population of a small US state.

              “As a final point, GPD is a shitty measure to work with. It is incredibly laden with broken windows, and suffers severely from the problem that you can only optimize what you can measure.”

              I agree, but PPP adjusted per capita income is probably the best measure we have of economic performance.

              1. “A second complication is that when conservatives mine this data, they often mistake the effects of deficit spending with the effects of tax cuts. They are usually coupled together, and there are precious few examples of real tax cuts that are tied to a spending cut of the same size. You can always goose the short term economy by borrowing money from abroad and dumping into your home economy. However, unless you buy something that generates income with that money, you economy will shrink as you pay the money back and negate the short-term burst from your initial deficit spending.”

                I’ve reread my earlier posts, and I still can’t see what this point has to do with what I typed.

                1. It’s relevance is that the few times conservatives try to site “data” that confirms that tax cuts spur the economy (you know, Reagan Reagan ya ya ya!), the tax cuts were not coupled with spending cuts. Therefore, one cannot conclude at all that it was tax cuts, rather than the deficit spending, that caused the short-term growth.

                  Frankly, I am not aware of ANY evidence which shows a nation making a significant tax cut plus spending cut simultaneously, and showing how that lead to growth relative to its peers.

                  1. STrange how you brought up a side conversation about tax cuts and conservatives, but alright.

              2. “excluding countries with less than 35 million people”

                So, excluding all the exceptions, you find no data that contradicts your point of view? What does population size have to do with anything, as we are looking at per-capita data.

                In any case, I don’t think per-capita GDP is the right measure. Worker productivity per hour is probably more relevant. Why should we conclude we are “richer” in the French if we have similar productivity but choose to spend more time working rather than vacationing?

                It should be obvious to anyone who has spent time in other rich nations (Europe, Japan, Australia, etc) that it is not obvious who is richer. As one smart person put it, where would you rather live: Hamburg Germany or Tupelo Mississippi. Both have similar GDP, right? Clearly, whatever GDP measures, it is missing a lot of critical components. The fact that we are hell-bent on optimizing it, while ignoring how inaccurate and incomplete it is as a measure, is causing us to make very poor decisions.

                1. Population size matters, because I could take a big, wealthy city from the usa, such as NYC, and compare it to countries of similar size, such as Sweden and Norway and it would blow them out of the water.

                  I agree that GDP leaves a lot to be desired, but it at least does give a good idea of the level of consumption opportunities available to a particular individual. Nothing wrong with that. Most economists would say that PPP adjusted per capita incomes are an important reference.

                  If you are going to base economic decisions on what if feels like to visit a country, then we don’t have much of a conversation here.

                  1. That might be a useful metric for a nation that was essentially entirely urban, twelge, such as Singapore or Hong Kong. But Sweden and Norway have plenty of rural areas. They are just America writ small.

                    The problem with looking at “consumption opportunities” is that you are not thinking about “consumption necessities”. For example, most poor and middle class families spend around a quarter of their income on transportation here in the US, far more than they spend in Europe or Japan. This is because our ridiculous automobile system forces just about every adult to own a car, or be dependant on someone else. Someone living in Europe doesn’t NEED the same amount of money, and can spend a couple extra weeks on the beach. Basing things on a measure which is obviously wrong is highly dangerous. It is a very bad habit to only pay attention to what you can quantify.

                    Have fun in Tupelo.

                    1. “But Sweden and Norway have plenty of rural areas.”

                      That wasn’t my point. Norway literally pumps about a thousand dollars a month worth of oil per person. Sweden is poorer than both Norway and the US, but it has a fairly successful welfare state thanks to its wealthy neighbors and the fact that its economy has been deregulated in recent decades.

                      “For example, most poor and middle class families spend around a quarter of their income on transportation here in the US, far more than they spend in Europe or Japan.”

                      Actually, the japanese have statistically longer commutes. Only the urban dwellers really get a break on transportation costs, and I believe that you are truly underestimating the actual transportation costs. Besides, PPP adjustments take into account such things. Yes, their transportation costs are low in the urban areas, but they also pay sky high prices for shoe box sized apartments. Don’t get me wrong, Tokyo is probably the cheapest major city in the world to live in, but it is still a fairly expensive place to live and Japanese economic conditions have not made life easier. Your example of Japan is definitely not common to the rest of the nations that we are discussing even if I did take your point as true.

                      Another thing about Japan; it has lots of regulation and trade law, but the country also has a fairly low tax rate.

                    2. All of Norways oil income is saved in a sovereign wealth fund. None of it goes to prop up welfare. The services Norway provides its citizens/customers are financed from its non-oil economy. Which includes a lower corporate tax rate than in the US, and a tax burden of the citizens of 28 %. Which is comparable to the total tax burdens in some US states. Not including VAT, but that has been accounted for in the conversion to PPP.

                    3. Okay, I see your point now. However, I still disagree, because you are ignoring the fact that the vast majority of Norwegians and Swedes live only a few miles away from major urban centers. Even if they are technically “rural,” they could take a short journey and be in the center of a major city.

                    4. Lost in all this: we are only talking about Federal levels of taxation. Fed+state would probably be in the mid/high-20% range.

        2. Yes, in North Korea, the government controls 100% of the GDP. We should try to learn from them.

        3. Any halfway “reasonable” person would check to see what goes on in other nations.

          And a fully reasonable person knows that local, state and federal government spending is now 44% of GDP and that level has only been surpassed in 1943 & 1944 at the height of WWII.

          How much spending is enough for you socialist sociopaths?

        4. Other nations, eh?

          Like like all those other nations that would not even exist as independent nation states today if they had not been getting military protection welfare from the United States ever since the end of WW2.

  5. u mad bro?

  6. motorcycles? picking up chicks with a snap of the fingers?

    OH SNAP FONZIE

    Did he really go there? Really? Don’t you “journalists” have some sort of ethics code you follow in your interactions?

    1. Since Chait belittles Nick with allusions to the Fonz, Nick should retaliate by calling him Officer Kirk.

      The peace of the Fonz be with you.

    2. Ethics? Fuck that. Two men enter, one man leaves!

      1. With the jacket.

  7. One experiment designed to evaluate insight and problem-solving ability involved a piece of meat attached to a string hanging from a perch. To reach the food, the bird needed to stand on the perch, pull the string up a little at a time, and step on the loops to gradually shorten the string. Four of five Common Ravens eventually succeeded, and “the transition from no success (ignoring the food or merely yanking at the string) to constant reliable access (pulling up the meat) occurred with no demonstrable trial-and-error learning” This supports the hypothesis that Common Ravens are ‘inventors’; that is, they have the ability to solve problems presented to them. Many of the Common Raven’s problem-solving skills were formerly thought to be instinctive, but it is becoming clear that Common Ravens are actually quite intelligent.

    Common Ravens have been observed to manipulate others into doing work for them, such as by calling wolves and coyotes to the site of dead animals. The canines open the carcass, making it more accessible to the birds. They watch where other Common Ravens bury their food and remember the locations of each other’s food caches, so they can steal from them. This type of theft occurs so regularly that Common Ravens will fly extra distances from a food source to find better hiding places for food. They have also been observed pretending to make a cache without actually depositing the food, presumably to confuse onlookers.

    1. This is some surreal shit, yo.

    2. Shorter Zoology:

      “So, Chait sucks ass, and The Jacket? fucking rules. Fuckin’ A right!”

      Amirite?

  8. This article needs a proof-reader.

    1. Uh, ya! I read that first sentence like 3 times before I accepted it was just poorly written.

  9. The term “ideological scoliosis” made my afternoon.

    1. slogging away clearing poop from the pump shaft made my day, but I have lower standards.

  10. Sitting in Avon, OH watching Cleveland lose to Cincinnati SUCKS. Think I’ll go listen to my Lions on the Sirius in my car. Which will suck even worse if they hold true to form.

    Glad I been drinkin’. Happy Sunday, Reasonoids! Back to Michigan tomorrow night – week and a half of vacation woo hoo!

    **three more shots down the hatch**

    1. Damn, dude. That’s some drinkin’. I have to work Monday and Tuesday; all you lazy goldbricking fuckheads who get 10 days off can suck my nuts.

  11. “I really advise Gillespie to confine himself to subjects he understands (motorcycles? picking up chicks with a snap of the fingers?)”

    Any man who disagrees with me must be one of those masculine men who chicks dig and who have always made my life so miserable.

  12. Using CBO estimates of economic activity, that means all government spending cannot exceed about $3.7 trillion in 2020 (all amounts are in 2010 dollars). However, the CBO projects that, given current growth trends, etc. that the federal budget will be $5.1 trillion in 2020.

    One should note that Obama’s 2010 budget is 3.55 trillion.

    There is no cutting of spending with Nick’s budget. In fact spending increases from 3.55 trillion to 3.7 trillion.

    1. As long as you ignore inflation growth, economic growth, and population growth, like an utter moron.

      1. Okay, but the population of children isn’t really growing, so that eliminates the growing need for most child services. The total population is only expected to increase by 10% between now and 2020. As the economy improves, less people will be using food stamps, welfare, and unemployment. I agree with you on inflation, but that is largely of the government’s doing. During times when the government was less active in economic affairs, deflation was the name of the game.

        ALso, real GDP growth is supposed to mean that you can spend a smaller portion of GDP and achieve the same or a greater result. Plus you are ignoring the fact that we are wasting a lot of money right now. I could probably make 600 billion in cuts today between the military budget, pork spending, government payrolls, and small pieces of SS and Medicare outlays. I would take the bulk of those cuts from the military budget, but we could easily work our way from a 2.9 trillion dollar a year budget to a 3.7 trillion dollar a year budget over the next 10 years. That’s about a 25% increase over a ten year period.

        1. “ALso, real GDP growth is supposed to mean that you can spend a smaller portion of GDP and achieve the same or a greater result”

          True, but real GDP growth should imply that the amount of government we want will rise. For example, upper-middle-class rich people spend similar proportions of their income on food and housing as working class people. Even though their personal GDP went up, so did their desire to use some of those gains to improve what they were already purchasing. It is completely rational for future, richer taxpayers to desire more or better government services.

          The baseline should be government spending vs GDP, not government spending vs inflation and population adjusted spending from prior years.

          “Plus you are ignoring the fact that we are wasting a lot of money right now”

          Not really, outside of the military. You might be able to nab a bit of Medicare fraud, and nip at government payrolls, but you aren’t going to make much of a dint in that 600 billion without making real and very painful cuts to real people, who by no means constitute “waste”.

          1. “It is completely rational for future, richer taxpayers to desire more or better government services.”

            Not when we are already maxed out financially…..

            “The baseline should be government spending vs GDP, not government spending vs inflation and population adjusted spending from prior years.”

            Okay, you are already starting to walk away from the point. The point was that GDP grows faster than inflation plus population growth, therefore it is supposed to be EASY to live within the countries means and maintain a decent level of services. For some reason you felt it necessary to launch into the argument that government spending should logically always increase and there is no such thing as an adequate level of government services. I’m sorry, I believe that once everyone is fed, clothed, and sheltered, the government shouldn’t really have any other necessary function other than defense and law enforcement (necessary law enforcement). According to you, as long as there is money to be had, spend, spend, spend!

            “Not really, outside of the military. You might be able to nab a bit of Medicare fraud, and nip at government payrolls, but you aren’t going to make much of a dint in that 600 billion without making real and very painful cuts to real people, who by no means constitute “waste”.”

            That is bullshit and you know it! Between government payrolls, pork, and gold old fashioned government overreach, there is plenty of fat. Besides, you could even cut the essential services back 5% without seeing masses of people starving to death in the streets. We could easily raise the age when one receives SS and Medicare benefits by a couple of years. You could reduce SS payments by a few percentage points without dramatically effecting the lives of seniors. You could reduce the federal education budget by ten percent without effecting almost anyone’s education (most of the education dollars come from state governments anyway). That’s after we cut 400 to 500 billion from the military budget. There are numerous tweaks and cuts that have been proposed on this website alone. Oh yeah, we could end the war on drugs, too. Even if we simply scaled it back, we’d see a tremendous savings. We could legalize prostitution and gambling at the federal level too. I’d send the department of education packing. Leave that to the states so that they can set up charters like the ones in New Orleans. Get rid of the border patrol.

            I could go on all day. And yes, most of those cuts are piecemeal, but they do add up. If you are going to sit there and tell me that there is no government waste outside of the military, you have fucking lost it.

            I mean, the government spends 20,000 per person, and there are still poor people. I grew up in a family of 4, and I can’t say that I ever felt like my family received 80,000 dollars worth of value from the government. The fact of the matter is that a retarded child could spend money better than the government does. Even in the areas that don’t necessarily constitute “waste,” the government spends money in a way that encourages higher costs. Even most infrastructure projects are wasteful boondoggles that force people off of their property and overpay workers for little work. I mean, Jesus H. Christ!@

            1. “Not when we are already maxed out financially…..”

              I saw plenty of people at the mall this weekend, buying all sorts of shit from China that they certainly didn’t need. The idea that we are “maxed out” is laughably silly. There is absurd amounts of money in this country which is being spent on non-necessities. There is no reason we for us to be sticking our kids with debts, and there is no reason that we can’t adequately take care of the poor or elderly, other than the mistaken belief that we can’t.

              “and I can’t say that I ever felt like my family received 80,000 dollars worth of value from the government”

              Interesting…it’s all about “feelings” now, which you railed against earlier? How much were roads, cops, and a lack of barbarian invaders worth to your family? It’s practically a meaningless question.

              I pay a whopping SEVEN PERCENT of my real income as federal income taxes. I get many times that in return. So do you.

              1. I pay a whopping SEVEN PERCENT of my real income as federal income taxes. I get many times that in return.

                I’m sure you do. And the people who pay nothing get an infinite return. It’s like magic!

              2. I pay a whopping SEVEN PERCENT of my real income as federal income taxes. I get many times that in return. So do you.

                Feel free to cut a check then.

              3. “I saw plenty of people at the mall this weekend, buying all sorts of shit from China that they certainly didn’t need. The idea that we are “maxed out” is laughably silly. There is absurd amounts of money in this country which is being spent on non-necessities. There is no reason we for us to be sticking our kids with debts, and there is no reason that we can’t adequately take care of the poor or elderly, other than the mistaken belief that we can’t.”

                Okay, once again you ignore the argument at hand for some other point about people buying shit from China? WhAT!?#?#? My point was that the government is out of money. It is. What people spend on Chinese goods has very little to do with that conversation…..

                “Interesting…it’s all about “feelings” now, which you railed against earlier? How much were roads, cops, and a lack of barbarian invaders worth to your family? It’s practically a meaningless question.”

                First of all, the percentage of our budget that’s needed for roads, cops, and keeping out barbarian invaders is actually fairly small. We are overspending in all of those areas. The fact of the matter is that even after all of those things are taken account of, there should still be plenty of money left over. Our government wastes the vast majority of what it takes in. Otherwise, we would have solved poverty years ago.

                “I pay a whopping SEVEN PERCENT of my real income as federal income taxes. I get many times that in return. So do you.”

                You aren’t taking into account the negative economic effects that you face due to the higher tax rates and regulations on other people, and yourself, such as lost opportunities. The government does a lot of things to hold people down, which definitely outweighs the benefits of most government programs.

                1. Any cut in spending is tantamount to raping and pillaging old people and children. Won’t someone think of the children!

      2. Snort. Look at me! I’m using words indicative of a dynamic economy when I have long denied their relevance to budgetary scoring! I don’t know anything about either price inflation, or monetary inflation, nor how they reflect on the value of government spending, nor how that very spending occurs at the cost of economic growth, nor can I answer why the growth of government should keep pace related to the size of the economy when they ‘provide’ essentially static ‘services’. I’m such a fucking moron I’m going to put a plastic bag over my head, tie it tight, and hope they wake me up one hundred years in the future when we finally have a cure for stupidity.

        PS. I, the Chad, have been faking being an expert on dozens of subjects for years on this site and you people bought it!

      3. As long as you ignore …. like an utter moron.

        This pretty much sums you up, doesn’t it Choade?

  13. Unfortunately, you have to subscribe to TNR in order to post there. Otherwise, I would point out to Mssr Chait the following

    “cutting spending by 3.6% a year”

    is not an equivalent statement to

    “cutting spending by 3.6%”

    At worst, Mr. Gillespie may be accused of not explicitly saying that the cuts would be compounded over the period. However, those of us who actually can interpret the English language get the picture. Mssr Chait apparently cannot make the distinction between the two statements I have quoted above.

    1. Actually, as joshus just pointed out right above, there are no cuts at all, as spending goes up with this plan.

      And to counter the obvious argument, IT REQUIRES A SPENDING INCREASE TO MATCH INFLATION.

      If inflation is 3%, for example, and spending increases 3%, then you have increased spending 3%, not 0%. Failure to match inflation is not a cut, that is choosing to not increase spending.

      1. If we cut federal outlays from 3.5 trillion to 2.8 trillion, which wouldn’t be that difficult since we spend a trillion a year on defense and 500 billion a year on pork, this should be easily achievable. Even with matching a 3% inflation rate, outlays would match receipts by 2020. I really don’t think that inflation will hit 3% a year for the next ten years. It will probably be below 2% on average, although I am sure that once the economy recovers, we may see an increase in inflation for a short time. Therefore, if we cut 500 billion from defense, and 250 billion from the rest, we should have a balanced budget for 2020.

  14. Again: The 19% tax revenue cap meme that libertarians and conservatives have latched onto lately is laughably silly, and so easily refuted that I can only believe that it lies completely on the dishonest side of the “dishonest vs stupid argument” spectrum.

    Hint: Look across the pond for evidence that the 19% cap can easily be exceeded.

    Hint #2: VAT and a carbon tax will get us to 25% easily.

    1. Well, before the recession, total government revenues (local, state, and federal) were around 40% of GDP. There are few countries that raise more that much more than 40% of GDP. Oh yeah, and all those that have a population over 20 million have PPP adjusted per capita incomes that are at least 25% lower than our own.

    2. Let’s just go straight to 100%, buddy!

    3. What’s laughably silly is you citing a continent whose financial system is about to come apart at the seams thanks to the PIIGS.

    4. Hint: Look across the pond for evidence that the 19% cap can easily be exceeded.

      Across the pond they have far smaller local and state taxes then the US does that is if they have state and local taxes at all.

      For any fair comparison with European countries you would have to add in state and local spending and revenue.

      But I guess only someone “laughably silly” would see that obvious and fatal error in your claims.

      In case the point went over your head Chad you just got pawned.

    5. Hint: Look across the pond for evidence that the 19% cap can easily be exceeded.

      Sweet, by countries that have fallen behind us economically (in PPPGDP/pop terms) ever gradually since the 1980s. Aside from Norway, which discovered vast amounts of petrowealth, the rest of the countries not only have glacial economies but are now being forced to bail out dollar for dollar both their worst banks and their worst neighboring countries. I don’t envy them a bit.

      Sure, that’s not what you’re saying, but this growth-at-all-costs-except-cutting-spending disease that overtook the European periphery is a symptom of a larger disease, one of lethargic growth and a bloated government sphere.

      Hint #2: VAT and a carbon tax will get us to 25% easily.

      And in case anyone wants to know why libertarians should never support more “efficient” taxation, here’s why. The goal will always be to add them on top of existing taxes, and the real aim has much less to do with distributing taxes across the stages of production or preventing global warming.

      Just because you can do something doesn’t mean you should.

      1. Amakudari, how much of our PPPGDP is and has been nothing more than bubbles and financial shenanigans? How much has been kept by anyone outside the top 2% or so? Why don’t you go ask all those blue-collar guys whose dads made a middle-class life working at the shop, while the sons are working the same job for $10/h and no benefits, while their wife is a cashier at Wal-Mart earning even less.

        It is better to be in the top 1% in the US than just about anywhere. But it is better to be in the bottom 90% in any number of nations than in the bottom 90% here.

        And you are right, the more distributed taxes are, they harder they are to avoid, and therefore the less economic impact they have.

        1. “It is better to be in the top 1% in the US than just about anywhere. But it is better to be in the bottom 90% in any number of nations than in the bottom 90% here.”

          Bullshit! This is a country where large percentages of people living in the bottom 20% of the population own microwaves, cell phones, computers, cars, and possibly their own homes. Our PPP adjusted median household income is significantly higher than that of the UK, and the UK is probably the wealthiest nation in Europe outside of the small, northern european countries. There are plenty of cities in the US that have higher median incomes than those wealthy northern european countries.

          http://en.wikipedia.org/wiki/Median_household_income

          Yes, Canada has a higher median household income, but they also have a freer economy according to the latest research, and they have significantly more oil, uranium, and any other natural resource that you can imagine.

          1. What you fail to appreciate is the Europeans get to visit these guys who wear white coats in a peculiar clinic that functions much like an assembly line a few times every year, and not be charged for it because it is free. The really odd thing is I find that when Americans of a certain political bent visit these other countries, they will claim a great deal of comparative knowledge of these clinics that could only come from either setting up tents inside the premises of these clinics or they are total klutzes and spent the great deal of their vacations getting their boo boos treated. Oh yeah, one other thing they like to proclaim once coming back from these trips is that they have seen the future, and it works.

            1. I admit that the US healthcare system has problems. However, we are talking about real household wealth here. The health care discussion is a separate discussion. Besides, European health care is not free, and health care is not the only thing necessary for a good life.

              I admit, I’d rather be hopelessly poor in Europe than the united states. However, if I made anywhere above 20,000 a year, it is definitely better to live in the usa. Arguing that 90% of the population of Europe is better off than 90% of the population in the USA is sheer lunacy.

              1. Sorry, I was being sarcastic. The majority of clinics in Europe aren’t worth a flying fuck in terms of services. Most of their value is derived from the intangibles of the emotional comfort stable systems provide unstable peoples, and, no, you would not be better off destitute in Europe their domestic charity tends to the abysmal.

                1. Whoops, sorry sr7. I just woke up and my sarcasm detector was still warming up…

              2. …sheer lunacy

                You do realize you’re arguing with Chad, right?

  15. Wow, only 19% of GDP? We wouldn’t want to make anyone mad and argue for a number closer to zero, I guess.

    1. I would cut to at least 18% in the VERY NEXT BUDGET. Not sure why the Jacket doesnt want to be “immensely disruptive”.

      Hail Eris!

  16. Hey Nick… Two quick editorial notes;

    First:

    “we need to bailing water now”

    Are you meaning to say we should “start bailing water now”? And also… I think you meant to use a different word in this sentence:

    “No, at least at as it affects your daily life.”

    Am I right?

    1. WHy hire an editor when commenters will do the job for free. 😉

      1. Good point… maybe they should hire me… (hint hint)

        1. Publishing being what it is these days, it might be a pay cut from “blog commenter”.

    2. What a drunk!

    3. Yes, you’re right. Fixed those and a couple other typos. Thanks.

      1. No worries. I must find at least six typos in every blog I write, and it seems I only ever notice them once I hit “publish”.

  17. ‘Over the past few days, The New Republic’s Jonathan Chait and I have engaged in a back-and-forth over whether the Reason.tv video “[snip]” and the article upon which it’s based, “[snip]” which I coauthored with Mercatus Center economist and Reason columnist Veronique de Rugy.’

    Over whether the video and article do what? Please learn to write correct English.

  18. An interesting budgeting exercise, but there’s one point of Chait’s and the author’s statement about him that does need to be better addressed.

    “Indeed, he is given to characterizing differences of opinions not in terms of disagreements but in terms of psychological dysfunctions and moral failings.”

    He should talk in terms of “moral failings.” The scope of government is first and foremost a moral issue.

    It does little good simply to point out that Chait, like any Progressive, is ignorant or weak on economics. Progressive pundits are not, in general, dumb. They’re evil.

    This can’t be said often enough. Sooner or later, the American public needs to be taught that or the Progressives will eventually complete their totalitarian takeover of American culture. Once that’s complete, economic theory and real-world analysis will be the least of our problems.

    The differences of opinion between Progressives and others are not mere differences of opinion; they’re radical differences of ethical value and philosophy.

    1. Once one understands that Chait’s philosophy isn’t any more substantive than “FUCK YOU DAD,” it’s a lot easier to engage the arguments.

      1. So that’s why being a leftist makes you popular with (some) chicks, you have the whole hate your dad thing in common.

        1. The only leftist guys it doesn’t work for are the Michael Cera-type geeks, who tend to be really creepy, socially retarded, and passive-aggressive in real life, with Oedipial issues out the wazoo on top of their dad-hatred.

  19. The point of your analogy is to say “look how easy it is to eliminate the deficit by cutting spending!” Specifically, “It’s so incredibly simple that virtually any elected official should be able to pull it off.” Chait points out that your scheme requires dramatically changing the scope of government; you agree. The past 2 years have proven the difficulty of enacting even minor changes in the scope of government. Even in your post here, you argue that we can easily cut 2.4% of the budget (I agree; I suspect Chait does as well) and do not try to argue that we can continue to easily find 2.4% of additional cuts in subsequent years. How does this not undercut the main point of your analogy?

    The logic you lay out here would apply equally well if you chose to say that we could easily cut the budget 95% over 40 years, rather than 24% over 10 years. You would point to the 40th piece of pork and obviously your audience would grasp that it’s truly meant to be 20 times smaller than the first one (or 20 times smaller as a fraction of projected spending).

    It’s reasonable to debate Chait on the relative feasibility of cutting a quarter of government spending or raising more revenue. Why not do that instead of defending a poor analogy?

    1. I dont think its a poor analogy, its easy to cut things. Since the House starts with a blank slate every year (right? That is how they do it right? Because any other way would be assinine) they just spend until they hit that years target (based on the 2.4% cut). Easy peasy. Cuts arent really cuts, they are just lack of funding something. If they do nothing, nothing gets funded, so cutting 100%* of the budget would just require laziness/gridlock.

      *yes, I realize some things are funded multiple years, but same diff.

      1. To get an idea of the scale here, the 2011 budget for the entire VA is $125 billion ($5 billion less than what’s “easy” to cut annually). Mandatory outlays (“some things”) eat up over half of the budget. Defense eats up half of what’s left. Interest expenditures account for a few hundred billion more. So the 2.4% that’s “easy” to cut winds up being more than 10% of what’s politically feasible to cut. I’m not saying it’s impossible to make these cuts; just that it’s not easy to find 2.4% to cut every year.

        1. Mandatory outlays (“some things”) eat up over half of the budget.

          Those “mandatory outlays” are not imposed by Martians. It’s just how lazy gutless previous Congresses have characterized their corrupt vote buying expenditures.

          The problem with Nick’s budget proposal is that it doesn’t cut enough. As he cited in this post, Federal expenditures are 60% higher than they were when Clinton left office. The goal should be a cut of 30% from the 2000 baseline which works out to a 56% overall cut from the current spending level.

        2. To get an idea of scale, if they just refused to increase any depts spending for next year, they more than meet the “cuts”. If a dept really, really, really needs more money, balance it with a cut somewhere.

          But tell most deptarments to fuck off, you get what you got this year.

        3. Wrong. It may be 24% less than some fantastical projection of what we hoped the budget would be, but we’re not scaling down government. Look at the chart, and you’ll see that spending goes from $3.6 trillion to $5 trillion over the course of a decade. So, these aren’t so much cuts as they are examples of reasonable restraint in budget growth.

  20. It boggles my mind how Congress can’t just say, “OK, our budgeted expenditures are $X over projected revenue, so we’re cutting all spending by $X and proportionally applying that reduction across all budget items.”

    If we don’t have the money, we don’t have the money, and the question should then be, “Why are we doing this in the first place if we can’t afford it?”

    The obvious answer to that question is that’s it’s because politicians like being in office and will blatantly bribe their constituents to keep them there.

    The solution to that is term limits for Congressmen and repealing the 17th for Senators, but then that’s beyond the scope of this exercise.

  21. I’m convinced Jonathan Chait’s original boyhood ambition was to be a pro wrestler, as the casual peruser of Google sees debate replies shot through with lockerroom dick-waving about “beatdowns,” “thrashings,” and dead serious suggestions his sparring partners seek psychological help or find other lines of work. And this was in arguments he LOST!

    But at some point, Daddy Chait must have interrupted his performing supplexes to imaginary opponents and broken the news: “Uh, son, you’re a short, geeky Jewish kid. WWE’s not happenin’ for you!” Crestfallen little Jonny must have then poured all that frustration into reading bad economics.

  22. And I’d like to see Chait confine himself to subjects that he understands (which are limited to the laundry list of left-wing SWPL obsessions), since basic math has clearly eluded him.

  23. All credit to the Paul Ryans and Nick Gillespies et al of this debate. That being said, you, me and everyone else on leaving comments on this blog knows there’s about a 5% chance that any meaningful spending reduction is done prior to the day when US treasury spreads start to explode.

    The UK chancellor of the exchequer had an interesting comment on morning joe last Friday: The UK public voted the Tories in b/c they see the greece and ireland shit going down in their backyard, hence they are motivated for meaningful change.

    “The bond market sleeps until it wakes up.” -Niall Ferguson on Bloomberg Surveillance, about 2-3 months ago.

    1. oops that should read: “…everyone else leaving comments on this blog…”

      1. “The bond market sleeps until it wakes up.” -Niall Ferguson on Bloomberg Surveillance, about 2-3 months ago.

        This is the most ignored fact by the pro deficit spending types. Debt always seems manageable until the moment that it isn’t. ALso, what is a manageable debt level under certain economic conditions is a nightmare under different conditions. This is why there is no iron rate for perfection when it comes to the debt to GDP ratio. Too much debt could be 75% of GDP or it could be 150% of GDP. It all depends on numerous factors. Sadly, you could wake up tomorrow and find yourself in greece no matter what your debt levels are today.

        1. Really, all it would take would be a couple years of low or zero real GDP growth before the entire country was attacked by bond investors and forced into bankruptcy.

          1. Won’t happen.

            The FED will just crank up QE XXII or whatever its up to at that point.

            This won’t end like Greece it will be more like another “G” country from Ninety odd years ago.

  24. Why even fucking bother arguing with Chait? He is a dishonest piece of shit.

    Prior to the passage of the health care bill, Chait wrote a piece that consisted of quotes from right wing bloggers who were declaring that Obamacare was “dead”. One of the people he claimed he was quoting was the Washington Post’s Jennifer Rubin, who, at the time, was still writing for Commentary’s Contentions blog. Rubin quoted another writer in a particular blog post, and she made it clear that the quote was not hers. But Chait attributed the quote to her and used it as evidence that Rubin was clueless as to the state of the health care debate. I emailed him to tell him he was misattributing the quote, yet he refused to correct his piece and he kept on smearing Rubin.

    Chait is a total piece of shit. The fact that The New Republic hired both he and Andrew Sullivan shows you how great its decline has been.

  25. First sentence of this article is a fragment, is it not? I’ve read it and re-read it, and I don’t understand it.

    1. So mentally drop the “whether”, you pedantic fuck.

    2. Never encountered a fragment before? Have trouble with the reading comprehension? A little slow, maybe?

      Get the fuck out of here with that weak ass shit.

    3. Every fragment I catch my teacher Marty gives me a gold star.

      What a good boy am I.

      1. Dude. The article was written poorly. The way the first sentence is set up, it is obvious he completely lost track of what he was talking about, and was distracted by the length of his own sentence. It desperately needed editing. Why insult someone for pointing it out?

    4. Looks like it’s fixed now. Good show!

  26. So the Detroit Lions won a fuhball game – that’s two in a row AND an away game.

    So you can all stop the arguing and bantering, cause the end is near and it’s all for naught. Drink up, fuck in the streets, these are the end times, boys and girls! Woo hoo!

    Thanks, Detroit Lions!

  27. As I say around the 1.20 minute mark, “By making small, systematic cuts in the fatty parts of the budget over the next decade, we’ll compound all our savings.”

    Nick, I think we have an opportunity here to bring the left (and the right) to our side.

    Insert the words “multiplier effect” and I think you’ll make some friends. It seems that fans of stimulus both left and right like thems some ‘multiplier effects’.

  28. Someone doesn’t like The Jacket.

    I smell an intellectual beat-down.

  29. I don’t care enough about this Chait/Nick dispute to have an informed opinion on who is right, but this is my first time reading H&R in maybe 3 years and damn has this blog/Reason taken a turn for the worse. Maybe you should take the money that you are spending producing those terrible Youtube videos and use it to hire back Julian Sanchez, Dave Weigel, and Kerry Howley.

    I used to think this place was okay except for Michael Moynihan and Katherine Mangu-Ward. I wrote off a lot of the dumb posts as harmless pandering to the right-wing readers of the blog and was able to enjoy the rest of the content. But it looks like your only objective now is to sell libertarian ideology to Rush Limbaugh and Glenn Beck listeners. Good luck with that.

    1. How can a radical not care?

    2. Humorless concerned troll is humorlessly concerned.

      Good luck with that.

      Way to keep up with the kids and their crazy way of talking by slipping a little ‘fresh’ lingo in there!

      I don’t care enough about this Chait/Nick dispute to have an informed opinion on who is right . . .

      You are the very model of what every citizen of H’n’R should try to aspire.

      But it looks like your only objective now is to sell libertarian ideology to Rush Limbaugh and Glenn Beck listeners.

      Neither is significant to most posters here, but for ‘radical professors’ the two are a b?te noire whom they never fail to mention no matter how unrelated they are to any topic. Why is that? I know you are not a ‘radical professor’ in real life, but, even so, perhaps a button pushing humorless concern troll would have some insight in to that he could share.

    3. Dave Weigel, in particular, was so very smart and insightful. He’ll shoo off these awful ratfuckers.

  30. I enjoyed your video and generally agree with Reason’s libertarian positions (strongly on the topic at hand), but I, too, noted the graphical slight of hand in that your demonstrated cuts happened year-by-year and were not compounded.

    To properly show the compounding you should have taken the first cut from the whole slab and then removed the first year. Repeat nine time, each time cutting from the whole slab prior to removing the year. I know it’s a bit more logistically difficult and not as theatrical, but mathematically it would have been more a accurate demonstration.

  31. I just hope they stop worrying about their pockets and worry about the future of your country. Why is it that the government cannot live within a budget when the economy is healthy? It never happens.
    We help Americans find jobs and prosperity in Asia. Visit http://www.pathtoasia.com/jobs/ for details.

  32. You gotta stick it to him on reduced services. He is saying that you cannot do it with the same services, all you have to say is that services will be reduced and that his bloviating bullshit doesn’t change the numbers.

    1. Reduced services, exactly, because no one has ever figured out a way to provide the same level of services at a lower cost. Efficiency and productivity are just mythical creatures that only exist in fairy tales. No local government that has attempted to privatize services has never been able to increase customer satisfaction and operate at a lower cost.
      Or, we could just focus services on the truly destitute rather than the “working poor” who still manage to find ways to afford McDonald’s and data plans for their iPhone.

      1. “Efficiency and productivity are just mythical creatures that only exist in fairy tales. No local government that has attempted to privatize services has never been able to increase customer satisfaction and operate at a lower cost.”

        THis is sheer nonsense. I agree that privatization is often a farce. Many functions of government don’t need to be privatized, they need to be eliminated. However, certainly privatization has helped in many cases. Government can easily become more efficient simply by not overpaying people. There is a tremendous tendency for the government to overpay workers.

        “Or, we could just focus services on the truly destitute rather than the “working poor” who still manage to find ways to afford McDonald’s and data plans for their iPhone.”

        The solution is even easier than this. THe government provides a laundry list of services to people that make as much as 40,000 a year.

  33. It’s amazing how difficult it is for people to say, simply, “you’re right, I fucked up.” Your video is completely misleading and worthless as a vehicle with which to get your ideas across (the cuts have to be compounded, yet in your video it is pretty clear that you’re making the same 3.6% cut year after year). And rather than own up to it, you double down and double down again.

    You fucked up. It’s okay, Nick, we all fuck up sometimes. When you admit you fucked up, you earn respect, even if it’s grudging respect. When you refuse to admit you fucked up, people write you off as a hack.

    1. Wow Craig, you persuaded me with your edgy wordplay… we should spend 130-150% of revenue every year forever; running debt in excess of the nation’s GDP can’t hurt anything and trying to solve massive debt is bad.

      Also, misinterpreting what someone clearly says means they, not you, fucked up. You never fuck up, you just can’t understand simple English.

      No worries, I’m sure it’s not your fault. We didn’t borrow enough money to have basic comprehension taught at whatever schools you went to.

      I won’t blame you; a failure to think could be genetic, environmental, due to trauma or injury; and these wouldn’t be your fault. Don’t worry, whenever you get confused, just assume other people fucked up.

      Oh, Einstien? Complete fuck-up, don’t even bother trying to understand that.

      1. You made a bunch of weird ad hominem attacks and didn’t even attempt to engage the subject of my comment, which is that the original video is misleading and, therefore, worthless. But I’m sure attacking my (theoretical, to you) education made you feel smart so good for you! Also, it’s Einstein. If you’re going to call someone else dumb, try to make sure you spell all your names right, chief.

        1. …weird ad hominem attacks…

          It’s interesting that you mention ad-hominem attacks, which are commonly used to distract from uncomfortable facts in a debate.

          Sort of like concentrating on minutaie in a video while ignoring the article from which it’s based.

          Or pretending that the terms “1.3 Trillion” and “130 Billion” were not present in the video, which seems (at least to me) to constitute a valid summation of the actual amounts, regardless of the nitpicky attention paid to percentages.

          Please continue to distract yourself by arguing with Nick about small percentages. That way, others who want large percentages permanently cut can work without hindrance.

          1. I’d love to argue with Nick about “small percentages” (ie. the contents of his silly video) but he appears to not be particularly concerned with answering valid criticisms honestly. The video is, quite frankly, a joke – it suggests to anyone who is looking at it with an open mind that the sort of cuts de Rugy is suggesting we make are just “a little bit of fat here and there” when, clearly, they would be much more substantial. By posting it, Nick is airing a lie, and yet instead of acknowledging what should be obvious to everyone, he continues to dodge and evade. That he has a whole host of devoted followers who are more than willing to tell him what he wants to hear suggests that maybe he’s just going to remain impervious to legitimate criticism.

            If you want to make libertarian arguments about the budget and the deficit then go right ahead. But don’t base them on a lie, because when that lie is exposed (as it has been here) then it makes the rest of your points (which may very well be valid) seem untrustworthy, too.

            1. You are seriously arguing that a 3.6% cut is drastic? Because businesses and households make those kinds of budget cuts all the time.

              1. This is exactly what I’m talking about. It is not a 3.6% cut. It is 3.6% the first year. So that’s gone. Then the next year, it is another 3.6% cut out of what’s left. Then again, and again, for 10 years. Compounding cuts – the end of the 10 year period, you have sliced almost a quarter out of the budget. If you watch the video, this is obviously not even remotely clear, so no wonder you don’t understand.

                1. So you agree with Nick. By identifying less than 3.6% of the budget to cut, each year for 10 years, the annual budget can be cut by more than 30%. I am not sure which part it is you think people don’t understand.

                2. Are you seriously arguing that we couldn’t possibly find 130 billion dollars a year to cut from the budget? Really?! The fucking “stimulus” was what, 700B. That’s almost 6 years worth of the 130B in cuts Nick is talking about. Any fucking retard could find 130B to cut per year.

                  Oh and last time I checked, we were doing fine in 2000 when the budget was $1.8T

                3. Compounding cuts – the end of the 10 year period, you have sliced almost a quarter out of the budget.

                  A quarter out of the original budget – if of course that budget didn’t expand at all over the 10 year period.

                  But that’s not what’s happening. The budget will be larger in 2020 – just not as much as some would like.

                  Please stop with the accusations that the video is a ‘lie’ – you’re projecting.

                4. FRom De Rugby’s response:

                  “Here’s how it works. According to the CBO alternative baseline, spending in real terms in 2012 will be $3,549.5 billion. In 2013, CBO says it will be $3,661 billion. That’s a $111 billion projected increase in spending. Hence, cutting $128 billion from $3,661 billion means a $17 billion cut from the 2012 level. It gets easier in the following year. Again according to CBO, the spending increase between 2013 and 2014 is $192 billion. Cut $128 billion from that proposed spending increase and you’re left with more total spending in real terms than the 2012 level. And so on and so forth. With the exception of the first year, which requires some $128 billion to be trimmed off, I am not really sure how one can look at this and think that it will require a gigantic sacrifice from the American people. And by the way, it is a stretch to call cutting $128 billion off a $3.6 trillion a sacrifice. Besides, it’s not as if we have a choice. In fact, this is the minimum we should do before we tackle the real issue: the reform of entitlement spending.”

  34. This debate is a nice example of “talking past each other”. Both parties are rejecting the assumptions of the other and inserting their own measures. This results in a nonsense argument on both sides. The comments on The National Review blog are particularly revealing. They could equally have been H&R posts with names reversed.

    Nick talks about the feasibility of making small cuts in the increased outlay expected each year. Jon responds by arguing that no cuts are politically feasible because nobody will vote for cuts.

    Nick talks about the percentage of tax revenues coming from the wealthy. Jon responds that the wealthy are paying a smaller percentage than before (no relative measure to other groups). Nick reiterates the percentage of tax revenues. Jon says that’s because the Rich are earning more.

    Both of these lines are true. Rich people pay a lower rate than before. Rich people pay a larger percentage of taxes than before. Rich people earn more than before. Even accounting for changes in earnings, rich people pay more of the overall tax burden.

    Selective reading of statistics and (seemingly intentional) thickheadedness leads to a debate that does not include all of these facts.

    The truth of this “simple plan” is that there would definitely come a moment where all of the “non-essential” crap and waste was cut from the budget and something from the political third-rail category would have to suffer a real cut. Namely, Social Security, Medicare, Medicaid and Defense would eventually have to be cut in ways that would be directly felt by politically potent numbers of people. Jon says the libertarian Fonzi is lying about this. The coat says that this plan doesn’t require any single draconian cut. They both overstate the case.

    Jon is just plain wrong about that supposed deception. It is clear that there is no innumeracy, pathology or deception in the Reason piece. It is also clear that when cuts in defense accumulate to levels that threaten weapons systems and/or bases that are connected to large numbers of jobs and votes, political taste for continued spending restraint will weaken. The same goes for those cumulative medicare cuts. Just look at the current “restraints” placed on Medicare. There are systematic, small cuts built in to the Medicare reimbursement system designed to gradually reign in costs. Those cuts have never been implemented (the Doc fix!). So now instead of a small cut, we have a huge cut. One that will never be implemented.

    That seems to be at the heart of the objections to the simple recipe. Counting the incremental year-by-year cuts in the growth of spending as a priori impossible, dishonest and fantastical, the logical conclusion is that the entire house of cards is dishonest.

    This is how the core assumptions of the two arguments diverge. Reason is saying that by following this simple plan of small, incremental cuts in the growth of the budget we can get out of this mess. Jon and the progressives are saying that cuts in spending are never going to happen, and therefore ignore everything that comes after.

    There also seems to be some intentional parsing errors on the part of the progressives with respect to income and taxation on the top 1%. They seem to argue that since income went up among the top 1%, that is the only explanation for the increase in their percentage of tax receipts. Reason does some additional parsing to show that this doesn’t fully explain the discrepancy, but Jon ignores this line of reasoning and dismisses it out of hand.

    Both seem to feel that having a chart means that they have “the facts”. Jon seems particularly guilty of this – posting a chart that shows the relative growth of the wealthiest income earner’s income without any mathematical link back to his point about taxation (just a gut feeling ‘of course’ conclusion). When his debate opponents specifically included this fact, and specifically walked you through the mathematical reasons for looking beyond this one fact, it is pretty hard to jump on Jon’s side on this one. However, the true believers do just that. I guess that just goes to show that confirmation bias is a strong force…

  35. It’s the political and managerial impracticalities of implementing a 25% budget cutting Libertopia in 2011 that has Nick proposing a gradual approach.

  36. I am totally with Gillespie & De Rugy here – I love their 18% solution in principle, but I hate some of their arguments. Factually, I take humbrage with the statement that we can’t increase revenue, no matter how hard we try. We haven’t tried a VAT and we haven’t tried European-style taxation in general. I don’t want it, but we can’t pretend that it couldn’t happen. When you pretend things like that, people don’t take you as seriously because they think you’re being intellectually dishonest.

    The other issue I have is with keeping the gov at 18% of GDP. Why should it stay at that ratio? Why couldn’t it go down as GDP increases? What would happen if GDP decreases? Will we make the necessary cuts? I understand the number will have to go up over time due to inflation…So why not start at an 18% baseline and then merely index it to inflation from there. We’d pay off the debt (eventually, assuming decent growth) and might even get to the point where we could offer US citizens a dividend when the government takes in more than it needs. Wishful thinking, I know, but since this is a site for ideas it is worth engaging in them fully.

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