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Archive for February, 2010

Pubs: You Had a Blank Piece of Paper for Eight Years

February 28th, 2010 1 comment

Since you didn’t do anything, why should we think that you’ll do anything this time?

Here’s the cost of doing nothing:


In case tea-partiers are finding the arithmetic troubling, if we’d adopted the Clinton plan we’d currently be saving close to half a trillion dollars a year.

If we’d adopted Nixon’s plan, we’d be saving a trillion dollars a year right now.

Every year.

You can read about Nixon’s plan, in his own words, here.

But you’d rather cling to some self-aggrandizing, knobby-headed notion of “freedom.”

Sorry, we can’t afford you people any more.

Where Did the Deficit Come From? From “Conservatives,” of Course

February 26th, 2010 Comments off

While poking around for info on the previous post, I came across this graphic:

Which comes from this especially great WikiPedia page.

Which just re-emphasizes what we’ve seen since WWII, and especially since 1980:

Okay, “Conservatives,” What Spending SHALL We Cut?

February 26th, 2010 Comments off

Not surprisingly, somebody went out and asked them. Here are the results:

Source. I think this pretty much speaks for itself, though it’s worth noting the commonly misunderstood fact that foreign aid accounts for less than 1% of Federal spending.

“Out of Control Spending”? Not So Much

February 10th, 2010 2 comments

A comment by flipspiceland on a previous post, about Democratic senators and “out of control” spending, got me curious about our spending numbers compared to other large, prosperous countries.

Short story: our governments (fed, state, local) are incredibly frugal compared to the rest of the world. This even with a defense budget that’s larger than every other country’s combined.

Here are the facts on the ground, most recent comparable data I could pull: for 2006. (As you can see, even for that year some countries haven’t reported.)

This is all in national currencies for 2006, no jimmying around with inflation adjustments or exchange rates/purchasing-power parities to convert to U.S. dollars. So the data’s pretty much as straight as you can get it.

Government Spending and GDP
(In National Currencies, 2006)
Government Expenditures GDP Spending as  % of GDP
Korea 251,982,800 908,743,800 28%
Ireland 59,912 176,759 34%
United States 4,795,952 13,336,200 36%
Japan 183,515,800 507,364,800 36%
Spain 377,876 984,284 38%
Canada 568,681 1,449,215 39%
Norway 873,925 2,159,573 40%
Greece 89,980 210,460 43%
United Kingdom 584,779 1,325,795 44%
Germany 1,052,290 2,325,100 45%
Netherlands 246,028 540,216 46%
Portugal 71,944 155,446 46%
Belgium 154,137 318,193 48%
Italy 722,751 1,485,377 49%
Finland 81,343 167,009 49%
Austria 127,194 256,162 50%
Denmark 841,076 1,631,659 52%
France 952,516 1,806,430 53%
Sweden 1,569,579 2,900,790 54%
Australia NA 1,045,674 #VALUE!
New Zealand NA 165,903 #VALUE!
Israel 296,240 NA #VALUE!
Source: stats.oecd.org. Expenditure from National Accounts: General Government Accounts: Government expenditure by function. National currency, current prices. GDP from National Accounts: Gross Domestic Product, Annual, in millions of Current Prices (National Currrency)

Taking just federal government expenditures, we’re even more frugal. (A higher percentage of our government spending is by state and local governments.) Stats.OECD is kind of a pain in the ass because it’s forever expiring your session and losing all your work, so I didn’t pull this myself–found it on another blogger’s site, pulled from CIA data. (CIA, OECD, UN, etc. all ultimately get their data from the same sources—the countries themselves—using standardized metrics.)

Notice the company we’re keeping?

Federal Spending as a Percentage of GDP
13. Sweden    58.1
14. Denmark    58.1
19. Belgium    56.0
20. Norway    55.8
23. Italy    55.3
24. Netherlands    54.7
25. Austria    54.3
26. Finland    54.2
27. Portugal    54.1
34. Greece    50.7
37. UK    50.0
41. Germany    48.8
43. Canada    48.2
47. Spain    47.3
51. New Zealand    46.6
63. Israel    43.6
64. Australia    43.6
69. Ireland    41.5
76. Switzerland    37.8
78. Luxembourg    37.5
103. Japan    30.9
107. South Korea    29.3
137. Taiwan    21.2

143. Chad    19.9
144. US    19.9
145. Cameroon    19.1

Democrats are Profligate Spendthrifts! Oh…Wait…

February 8th, 2010 Comments off

Damn I’m busy today. I came across yet another great Wikipedia page that I really had to share: National debt by U.S. presidential terms.

I’ll just share a little top-line data. There’s much more over there.


Average Increase, 1978-2005 Spending Debt GDP
Under Democratic Presidents 9.9% 4.2% 12.6%
Under Republican Presidents 12.1% 36.4% 10.7%

Who are the true conservatives here?

Feel free to snark at this table. It’s just one slice out of millions that are possible, quite possibly cherry-picked. But make sure to also take down all the evidence you’ll find here and in the ensuing links. (There’s really no way to spin the data any other way without spectacular efforts at cherry-picking and statistical contortion.)

Then come back and talk to me.

Galbraith Translates “Trickle Down”: Eat Shit

February 8th, 2010 Comments off

In digging around for the previous post, I came across  this beaut on Wikipedia (can’t believe I’ve never seen it before), and just can’t resist sharing it:

The economist John Kenneth Galbraith noted that supply side economics was not a new theory. He wrote, “Mr. David Stockman has said that supply-side economics was merely a cover for the trickle-down approach to economic policy—what an older and less elegant generation called the horse-and-sparrow theory: If you feed the horse enough oats, some will pass through to the road for the sparrows.[45]

I’ve always said “trickle-down only works with urine and semen,” but I think Galbraith has embraced a superior excretion.

David Stockman on Starving the Beast: “It doesn’t work. Game over.”

February 8th, 2010 9 comments

You remember David Stockman, right? Reagan’s “whiz kid” budget director? He’s the man who engineered the last thirty years of Republican dominance by implementing The Reaganomics Strategy: borrow money from our children and from abroad to buy votes at home with the “I’ll cut your taxes” pander.

Stockman has never been the type to twirl his finger in his cheek and actually proclaim that Reagan’s economic vision had any roots in reality (aside from the political reality that “deficits don’t matter”). He’s repeatedly acknowledged–even as early as ’81–that the whole thing was a scam. (That’s not exactly the word he used, but…) Check out this Wikipedia page for details, and links to more.

Well now — after years as a top Wall Street private-equity and hedge-fund hotshot who’s very, very clear on how the world works — he’s demonstrating that clear-eyed side once again. Here he is on February 5, on PBS News Hour with Paul Salmon, commenting on “Starve the Beast”:

The lesson of the last twenty five years is that it doesn’t work.

Here’s the whole video. (Start about 6:30 to skip the fairly predictable indictment of the too-big-to-fail financial institutions and somewhat more surprising endorsement of Obama’s proposal to tax them.)

Stockman continues:

You can keep cutting taxes until you reach the point where this year, the year just ended, we spent 3.6 trillion and we only collected 2.2. We are now so far out of kilter that it’s irrelevant. Taxes are going to have to be raised. The beast needs to be trimmed back, but it can’t be starved enough to even begin to cope with our fiscal problem. And this is where I think all the politicians are faking, in both parties but the Republicans especially. The Republicans think their mission in life is to cut taxes. Sorry, game over. We’re now in the tax raising business, and we’re going to be in the tax-raising business for the next decade.

The bill is due. And yes, Virginia, there is a difference between the Democrats and the Republicans. The Democrats have certainly used and benefited from the pander (Clinton: “The era of big government is over”), but today’s Republicans still either believe or choose to pretend to believe in what Reagan’s own VP, the first George Bush, so aptly called “Voodoo Economics.”

Today’s Republican politicians are either 1) craven liars, or 2) intentionally self-deluded zombies, while most Democratic politicians are just limp-wristed, politically motivated collaborators. It’s pretty obvious which is worse. (I won’t get into the voters except to say that Democrats who vote against their own best interests do it because it’s the right thing to do–economically and morally–while Republicans who vote against their own–and everyone else’s–best interests do it because they’re idiots.)

It’s damned unfortunate that we have to raises taxes now, during a downturn that shows every sign of lasting for years, because raising taxes hurts economic growth over the short term. But after thirty years of magical thinking, it’s time to pay the bills.

The good news–for those of patient merit—is that in the long run, paying for the amount of government that’s necessary to maintain and promote prosperity results in (surprise) more prosperity.

Saving the best for last, there is this remarkable interchange in the Stockman interview, at about 2:00:

Salmon: Listening to you I’m struck by the fact that I can imagine critics on the left saying exactly the same thing.

Stockman: I’m mortified by that thought. But at some point you have to ask, what’s good policy?

Here’s one aggrieved citizen who wishes that point had arrived — that David had asked that question — oh, about twenty-eight years ago?

Cutting Taxes Creates Growth: Yeah, Right

February 8th, 2010 2 comments

Cactus at Angry Bear does yeoman’s work yet again to drive a spike into the heart of voodoo/trickle-down/supply-side Reaganomic ideology, demonstrating what economists have known for decades: Keynes was right.

Over the short term–one to three years–raising taxes hurts economic growth. Deficit spending (read: low taxes and high spending) promotes economic growth over the short term. There’s no real argument about that in the economics literature, and that’s one reason that politicians–who are congenitally driven by the short-term exigencies of the election cycle–are so craven about cutting taxes, especially in downturns. (The main reason is that it buys votes.)

Supply-siders especially like to proclaim that it’s marginal tax rates that really matter. The theory-cum-ideology makes sense, but the empirical data doesn’t really bear out the theory.

I’ll just share one graph from cactus’s post (read it all), showing what is also shown unequivocally in decades of economic research: cutting already-reasonable marginal tax rates by marginal amounts doesn’t create long-term growth. (You know: the kind that really matters and that we should really care about.)

Thanks to Reaganomics, we’ve been on a thirty-year Keynesian stimulus spending spree using borrowed money.

A “Center-Right” Country? Not So Much.

February 2nd, 2010 Comments off

Gallup:

Solidly Democratic or leaning Democratic: 33 states (plus D.C.)

Fairly evenly balanced: 12 states

Solidly or leaning Republican: 5 states

Four words for Democrats: get out the vote.