I haven’t highlighted the Porkbusters movement that much because in my estimation, it is a short-term gimmick, when what is needed is a long-term shift in attitudes about spendings, taxes, and priorities.
Sure, I am all in favor of the Porkbusters movement, but it makes me a little distressed to think that people think the budget was really ‘balanced’ even during the halycon years of the Clinton presidency. It wasn’t, but for the surplus fund from social security.
At any rate, let me phrase it this way- Porkbusters is a nice step, but we would be foolish to think that if Porkbusters gets $200 billion in cuts over the next few years, we have achieved a significant victory. It will be a step in the right direction, but it would be like putting a new bumper sticker on a rusted out Ford with no engine propped up in the backyard on cinderblocks. Sure, it may feel good and look a touch better. But it ain’t getting anywhere quick.
Maybe it would be a significant victory in that it could be a turning point in attitudes. Who knows. I count Bush’s unwillingness to display any fiscal discipline or his inability to find, much less wield, the veto pen, as one of the greatest failures of this Presidency.
Having said all that, this is a good sign, and as I bash Coburn with the best of them, he should get credit for this:
Sen. Tom Coburn, R-OK, was successful yesterday in securing Senate passage of an amendment that he believes “will lift the veil of secrecy that conceals the process of inserting special projects – or pork – into appropriations bills.”
As Instapundit notes, ‘the ball is in the Bush/Delay court,’ and you will just have to excuse me if for now I am of the opinion that they will simply fumble it.
Again.
And yes, I am jaded and cynical and I hate America. Wanna make me a believer? Kill the transportation bill dead, and follow up with a death blow to the Prescription Drug giveaway. Then we can talk.
*** Update ***
Fabulous. It appears Operation Offset can’t even do basic accounting.
TallDave
Good point on the surplus. The sooner we ditch that accounting dodge, the better. That piece of ledgerdemain is why people claim we have a Social Security Trust Fund, when in actuality we’ve been spending it all along.
I like to think that somewhere, Phil Gramm and Bob Dole are seeing Porkbusters and smiling.
Pun Dit
200 billion is the estimate for Katrina and the biggest Hurricane in history is headed to Texas.
John S.
Yeah, just so we can be sure to undermine the greater degree of fiscal responsibility displayed by Clinton in order to make Bush’s complete lack thereof not seem so monumental.
I guess this can read as “Clinton just used accounting tricks to make the deficit disappear, whereas Bush is honest with the people about it.”
Good ol’ Bush. Every weakness is a strength for him.
Blue Neponset
It is becoming clear to me that the only difference between Rebpulican and Democratic Congresscritters is how they want to pay for big government, R’s want to borrow and D’s want to tax.
The Repub spin machine is going to have to come up with some funky algebra to claim it is the fiscally responsible party in 2006.
TallDave
Actually that was LBJ’s invention, not Clinton’s.
And if you really want to get technical about fault/credit, the budgets of the 1990s were shoved down Clinton’s throats by the GOP congress. Remember when Newt shut the gov’t down?
Darrell
How about the massive Agriculture bill? I’m not trying to read anything into your post, as you cannot list all spending excesses, but given the size of the Agriculture welfare spending and protectionism of that industry, I’m curious as to whether you think Agriculture spending should also be on the chopping block?
John S.
1) Just as a point of curiousity, do you have any data that supports your claim that the GOP Congress was responsible for trimming the deficit?
2) If the GOP was fiscally responsible last decade, then what is your explanation for their complete lack of it so far this decade?
Slides undernourished conscience
I agree with killing the transportation bill and with killing the Drug giveway. In addition, I say that the US could be kinder to it’s senior citizens by not forcing them to finance the drug needs for the rest of the world, as we do now. Of course that will never happen for reasons both political and charitable.
TallDave
Great chance for Dems to seize the fiscal responsibility initiative by re-introducing the Balanced Budget Amendment that fell one vote short in the 1990s.
But since if iirc was Dems that voted it down, I’m guessing that will be a cold day in hell.
TallDave
John S,
1) I guess you didn’t follow the budget debates in the 1990s. No, I’m not going to dig them up for you.
2) Power corrupts. Now that they’re in charge, suddenly spending isn’t as evil anymore. Sad, really.
Tim F
John S,
Dead-on about point (1). People soon forget that the GOP was desperate to deny Clinton the sort of victory that reducing the deficit would provide and did everything they could to get in his way. Of course after it happened they jump up and claim credit.
About (2), it’s worth pointing out that Gingrich and DeLay are hardly chums. I don’t love Newt any more than you do, but he’d be a cool breeze on a spring day compared with the leadership that we have today.
kenB
I keep seeing this “kill the drug benefit” idea tossed around as if it were a simple, no-consequences thing. Bear in mind that the health care world has been ramping up for this for two years — money has been spent, start-ups started, staff hired, etc. Not that it can’t be done, but it’s not like it’s a zero-cost maneuver.
TallDave
People soon forget that the GOP was desperate to deny Clinton the sort of victory that reducing the deficit would provide and did everything they could to get in his way
Uh, hello? Balanced Budget Amendment? Sheesh.
Jim
I’ll say it Ken. It can’t be done. Not only would it piss off Big Pharma, it would seem like an incredible bait and switch to seniors. Haven’t they been telling seniors that their drug costs were going to be under control for the last few years? Wasn’t that part of Bush’s campaign last fall?
Lines
And because its called a “Balanced Budget Amendment” thats exactly what it does! Kind of like the “Clean Air Act” or “No Child Left Behind”, or my personal favorite the “Patriot Act”.
John S.
TallDave-
So basically you cannot backup your claim that the GOP was really responsible for driving the budget surpluses under Clinton:
Or perhaps, you intend for this to be your explanation in a snide response to Tim:
How does that prove that Republicans facillitated the balanced budget when it didn’t even pass?
And the best you can come up with for the Republicans rampant shift in ideology from your assertion above is a pithy one-liner:
I cower in the shadow of your intellectual prowess.
ppGaz
Well, while you guys are arguing over the microscopic credibility of TallDave’s morning round of off-the-top-of-his-head assertions ….
Our president has been having a live go-round with the press, and talking about budget cuts and disaster recovery plans …. and stuff ….
About the only coherent thing I could pick up from it was that they are bringing terrorists to justice. So, we can all sleep soundly tonight.
Perhaps a scan of the transcript later will reveal more salient points and budget wizardry.
Tim F
The federal government doesn’t work in the same way as state governments, which often have provisions mandating balanced budgets. It would strongly inhibit America’s ability to act on the world stage if we we had no flexibility in our annual budgets.
In one sense the amendment fit perfectly with the isolationist Republican party of ye olden dayes, whether it suited America’s interests or not, but those days have long passed. That Republican party is dead.
Gamer
I would think not going to such detail on the fiscal history of the 90’s would be less about not having the data and more about respecting the host’s bandwidth.
I should have seen this coming the first time I heard Bush utter the words “compassionate conservatism”.
John Cole
Sometimes you people make me want to puke.
I write a long post excoriating the Republican Congress and Bush, and your comment is… I am defaming Clinton.
The mind fucking boggles. Clinton was far more responsible, IMHO, than Bush has been, yet for some reason or another you need to deny the fact that social security funds were used to make the budget balanced. I guess you guys need your cult of personality, too.
AkaDad
The democrats passed the 1993 deficit reduction plan by raising taxes. Not one Republican voted for it.
If I remember correctly, Republicans at the time said it would ruin the economy, and lead us into a recession.
jg
Your checking account is just an IOU. The bank loaned the money to others to earn interest income. By your accounting logic you no longer have any money in the bank.
Stop being a tool of deficit hawks who are trying to get their base behind the idea of defaulting on the loans.
gratefulcub
Just one actually
ppGaz
Note to self: Don’t stand too close to the blog …..
jg
Didn’t know that. A question. If the surplus was an illusion, and all the smart conservs knew that, how did Bush push his first tax cut based on having a surplus? I was on Bush’s side at the time so its not a dig, its a real question.
KC
PpGaz, so was it a full on press conference? Or, was it the typical four question game that Bush does sometimes when meeting with foreign leaders or other officials? I wish I didn’t miss it.
TallDave
John S.
So basically you cannot backup your claim that the GOP was really responsible for driving the budget surpluses under Clinton
True. I also lack any proof for my claim that the Earth is round.
How does that prove that Republicans facillitated the balanced budget when it didn’t even pass?
It disproves Tim’s hilarious claim the GOP was working against deficit reduction.
I cower in the shadow of your intellectual prowess.
Cower away. While you’re down there, read about the 1990s budget fights.
quackquack
Is it just me, or isn’t it Congress’ job to read through and research bills before passing them? “Veil of secrecy”? What is that supposed to mean? Are they that incompetent or just lazy?
Sure there are many who want to bring in the line-item veto, but I am not very sure that it is constitutional.
ppGaz
Not quite, it was a stand up for a while in front of the Pentagon breifing room. I think that the stated purpose was to talk about the WOT but the questions ranged all over the place.
The video is amusing, because Chancellor Cheney is standing at Spuds’ elbow most of the time with that inimitable smirk on his face. Those two smirk more than any two people I have ever seen in my life. Either they are up to something, or else they have some really bad gas.
TallDave
jg,
Your checking account is just an IOU. The bank loaned the money to others to earn interest income. By your accounting logic you no longer have any money in the bank.
LOL Your checking account is an IOU from the bank to you. An IOU to yourself is entirely different.
Here’s a simple test to demonstrate why they’re different. Write yourself an IOU for $1 billion dollars. Are you now a billionaire?
The SSTF is an IOU from the gov’t, to the gov’t. It’s nothing but an accounting trick.
Otto Man
What’s the weather like on Bizarro World?
Clinton’s first budget, the one that made deficit reduction and building up a surplus the government’s top priorities, was voted against by every single Republican in the Senate. They predicted it would lead to a massive fiscal crisis.
So they predicted it would be a disaster and they all voted against it. How the fuck is that an example of Republicans leading the way?
wilson
While focusing on what to cut and where to save, let us not forget the $200 billion for Katrina is a number out of a hat. Get that down to $60-80 billion and the prospects for the budget as a whole look a lot better.
I would also suggest $60 to $80 billion could be carved out of the defense budget. I concede we face a risk from terrorists, we need to support the troops, etc. But risk now from mistaken leaders within (those who borrow and spend irresponsibly) is looking pretty serious. What is the good of spending $400-500 billion a year for defense and Iraq, if the troops need to come back and pay back profligate federal borrowings for 30-40 years?
There should be no sacred cows when the budget comes up for necessary surgery. Surgery should not be delayed. Otherwise, we risk having China and/or the EU overshadow the US economically in the next 30-40 years.
John S.
John-
If you look, you would notice I was addressing TallDave, not YOU.
Sometimes your egocentrism makes me want to puke.
srv
TD,
Sometimes even I try with you, but waving Balance Budget Ammendment is like waving the Flag Burning Ammendment. You keep drinking the kool-aid, and they’ll keep waving it around every election. Tooly.
Practically the first thing Clinton did when he came is was put hiring freezes on most gov’t depts.
Lines
Otto:
because we’re under a current crisis! They were just too far ahead of themselves at the time.
KC
PpGaz, given what Cheney’s diet is now with a heart condition and all, I’ll put my money on gas. As for Bush, I think we’d all smirk if one of our buddies was firing ’em off behind us while we were doing a press conference?
Doug
The Clinton “surplus” did rely on social security gimmickry. However, even with the same gimmickry, Bush’s deficits are staggering. (Not responding to John here — that’s pretty much exactly what he’s said — just responding to some of the comments.)
I think by the time Bush actually got his tax cuts passed, he was saying they were necessary to jump start the economy which would produce higher overall revenues. Which was most peculiar in that, when he first proposed his tax cuts, he cited the evils of a surplus. So, depending on the state of the budget, the very same tax cuts could magically increase and/or reduce overall revenue. Wizardry!
And yes, the Republicans did vote against the Clinton tax increases that preceded the booming economy of the late 90s. And when they voted against them, they had dire predictions for the effect of the tax increases on the economy. They were laughably wrong.
But I still think the Republican Congresses of the mid-to-late 90s played a significant role in the “surpluses.” I think that basic gridlock keeps budgets in check. I think a Democratic President combined with a Republican Congress is pretty much idea. We saw in the 80s, that Democrats would open the purse for Reagan whereas in the 90s, the Republicans kept the purse strings closed for Clinton.
John S.
John-
How is it that everyone else seems to grasp that my comment was directed at what was obviously TallDave’s effort to steer your post into little more than “Republicans are still better than Democrats”, and yet somehow you manage to walk away thinking that somehow I condemned you, and then start hurling invectives around?
You are wrong in your interpretation and your reaction.
tzs
What I want to know is where will it all end? Are there any Republicans (and Democrats) out there who will say ENOUGH, we can’t continue to just put all this on the credit card, we’ve got to figure out a way to pay for it?
Aside from our assumption that China et. el. will continue to buy up U.S. debt, doesn’t having to service the debt start at some point to really bite into what we raise through taxes? Especially since the Grover Norquist crowd can think of nothing more than “cut taxes!” which means a smaller pot of money to work with…
What are the politicians going to do about that? Or are they expecting to pull a Russia and have the U.S. gov’t default on paying its debt? Yeah, that’ll really convince people to buy U.S. bonds in the future….
I don’t get it.
jg
One wholly separate department of government can lend money to another. Happens all the time. Companies do it too. You’re just showing why its so easy for Rove and Luntz to get you people to go along. They play to your ‘commom sense’.
John S.
Doug-
That was an excellent and thoughtful response.
Thanks for breaking the usual mold here.
TallDave
Here’s a simple test to demonstrate why they’re different. Write yourself an IOU for $1 billion dollars. Are you now a billionaire?
To better mimick what actually happens with SSTF, let’s say you’re saving for your kid’s college fund. Every year from when you kid turns 3, you’re going to put away $10,000. But you’re not a very good saver. The $10,000 you’re supposed to put away you spend on beer instead. But you figure “Hey, I’ll write myself an IOU. Same difference.”
So 15 years later, you have spent the $150,000, and you have a stack of IOUs totalling $150,000. Your kid says “Hey, I need that college money now.”
“No problem,” you tell him. You take your $150,000 IOU to the bank and tell them, “Hey, I need to cash in these IOUs. I’ll give you the IOU, you give me the cash. The person in the note (me) will then owe you the money.”
Then they’ll spray coffee all over you with laughter, and direct you to the loan department, because an IOU to yourself has no value, or even any meaning in a fiscal sense.
And that’s what will happen to the gov’t. It will have to borrow the money, or take it out of current budgets.
TallDave
jg,
The federal gov’t is not separate from the federal gov’t. It’s the same gov’t.
TM Lutas
The problem with the prescription drug benefit is that it solves a real problem in how we’re paying for medical care for the elderly. If you pay for surgery but you don’t pay for drugs, you’re going to get more surgeries, less drugs, more spending, and worse health outcomes as people shift some of their treatments to the subsidized surgery solution because that is what they can afford. That’s a really stupid way to run a health system. Finance systems should not tilt you towards more expensive, less effective treatment options.
Sure we should fix the cost of the prescription drug bill but we should improve it so that we’re doing better, not just reverting to a failure mode that is even more stupid than present law.
Tim F
Democrats will get elected, raise taxes to fill the budget gaps and get thrown in a landslide by Tom DeLay’s younger brother.
People are right that the Democrats are basically the permissive mother party. We’re the permissive mother following after the chocolate-smeared toddler party, cleaning up their messes and getting yelled at as a reward.
TallDave
srv,
Sometimes I even try with you, like in this post. The Balanced Budget Amendment would have constitutionally required a balanced budget. It came within ONE VOTE of passing. Bob Dole thundered that “there will be consequences in November” for not passing it.
So, where’s the Kool-Aid? Are you claiming they were just kidding?
ppGaz
And in this case, by means of bonds. Real securities with real consequences associated with them:
Trust Fund FAQ
TallDave’s nonsense notwithstanding, the government has no more “right” to squander these assets than it does to default on bonds held by other borrowers.
TallDave
ppGaz,
As usual you have no idea what you’re talking about. Those are REPAYABLE BY THE GOV’T. Where do you think the gov’t gets the money?
DougJ
Some of the “pork” being cut is 1.8 billion from the Center for Disease Control. That seems like a terrible idea. That said, kudos to the pork-busters for the most part.
Speaking of Rob Cordry, here’s a classic:
“Everything the president is doing is perfectly in keeping with his ideal of limited government… This president believes government should be limited not in size, Jon, but in effectiveness. In terms of effectiveness, this is the most limited administration we’ve ever had.”
ppGaz
Heh. I know the difference between an IOU that you get from your brother in law, and a non-marketable government bond, Dave.
Dave Ruddell
Does anybody remember early on in Bush’s first term, how tax cuts were being sold as a remedy for the staggeringly high surplusses that were projected? Greenspan testified before congress that the gov’t would pay off the entire debt, and all that surplus cash would have to go somewhere, skewing the entire economy. I haven’t heard that in a while…
ppGaz
Well, there’s no reason to just throw money at problems, Doug.
If bird flu is as bad as they say, the money is better spent on body bags. I think this administration is going to be very good for the body bag business.
TallDave
If the budget didn’t have this gimmick of spending the SS surplus but the spending numbers were the same, you would have a mountain of cash locked up somewhere, and a mountain of debt to offset it. Instead, they just spent the money, and didn’t take on the debt.
The net effect is that the national debt is actually larger than reported, because technically it also includes the SSTF.
It’s just amazing how people are willing to drink this absurd budgetary Kool-Aid. You can’t spend money twice.
AkaDad
DougJ,
The Daily show is great, heres a good exchange…
Jon Stewart: Well, at the very least, is the government better prepared to deal with Rita then perhaps we were with Katrina?
Rob Corddry: Absolutely Jon. Whatever they’re shortcomings in the past, the federal government has learned the lesson of Katrina: start blaming state and local officials now. I’ve already been assured by FEMA that the mayor and governor will have failed. And this time the president will not be detached. There are already plans to have him helicoptered in to save a baby trapped in raging floodwaters.
Jon: That seems to be taking a bit of a chance, no?
Rob: Nah, they’ve got 5 babies spread out around the area. Jon, they’re confident Bush will get one.
Jon: Who would give their baby to be used in that type of fashion?
Rob: You’d be surprised Jon. The GOP has a classification for that level of donor. They’re people who have donated $250,000 and, of course, a baby.
KC
Yeah, I saw that CDC cut at Marshall’s blog. Pretty bad idea, I think. Also, I noticed Pelosi has committed to sacrificing some of the pork in her district. Wouldn’t it be interesting to see the rest of the Cem caucus do that? Wouldn’t it be even more interesting to see Congressional Dems and Republicans do that? I’ll bet Delay holds out until the very end.
Defense Guy
The tax cuts did lead to higher revenues, the only problem is that spending went up too. Check the OMB for the numbers.
TallDave
ppGaz,
You don’t know the difference between a bond and an gov’t IOU to itself.
KC
Cem = Dem, sorry.
DougJ
Not sure, if people know this, but the biggest scandal that plagued Bush in Texas when he was gov involved a funeral company.
I guess they put their money behind the right guy.
Defense Guy
Meant to say CBO. Compare the revenues of the tech Boom years under Clinton with now, post 9/11 and tax cuts. Again, the problem is we are outspending the gains.
Link
Dave Ruddell
Hers’s a link to what I was talking about earlier regarding the problems that were going to be caused by the federal debt being paid off. If only.
ppGaz
It isn’t about “spending money twice.” It’s about paying an obligation, once.
Suppose you take out a loan, with a balloon payment out on the time horizon. Along the way, you spend more than you anticipated. When the big payment comes due, you just shrug and say, well, I spent the money, I can’t pay.
Your credit rating goes into the toilet, because you failed to satisfy your obligation.
Please refer to the phrase “Full faith and credit of the United States government.” This concept rests upon the government’s track record in satisfying its legal obligations. The posture of our national debt rests upon that full faith and credit. Anyone who lends money to the United States, whether it is a private citizen buying a Savings Bond, or a foreign investor holding large amounts in US govt securities, is measuring their risk against that full faith and credit.
The government would be ill-advised, to say the least, to walk away from the SSTF obligation. That could precipitate a credit and economy event that would make Hurricane Katrina look like pocket change.
DougJ
Yes, I did get that CDC info from Marshall. That’s pretty much the best blog. I think maybe if John were more serious he could approach it, but the last few weeks haven’t given me much hope on that front.
TallDave
Where do you think the gov’t gets the money to repay the IOU?
The answer, which ppGaz couldn’t supply, is: THEY BORROW IT, or take it from taxes. That’s because the IOUs have a net value of zero to the gov’t as a whole. That’s why people say they’re worthless. They may have value to the Soc Sec dept, but that’s offset by the liability they impose on the other side of the gov’t that has to pay them. Money to fulfill that liability must come from outside the gov’t.
DougJ
No one could anticipate this, ppgaz.
ppGaz
.
I’ve seen your blog, Dave, so I know that you truly believe that if you just keep saying the same wrong thing over and over again, it will somehow become right.
However …. an IOU and a US government bond are not the same thing, no matter how assiduously you work to sell the idea. For the reasons I’ve stated, the government literally cannot afford to walk away from its obligations.
One does not “save money” by reneging on one’s debts, Dave.
One screws onesself over, you see.
TallDave
ppGaz,
Your ignorance is amazing.
The government would be ill-advised, to say the least, to walk away from the SSTF obligation. That could precipitate a credit and economy event
Again, you demonstrate you have no idea what you’re talking about. It wouldn’t affect the US credit rating in the least, because it’s not owed to lenders, it’s owed to SSTF, which is just another gov’t agency and part of the gov’t as far as the bond markets are concerned. The consequence would be that SSTF would have no money and be unable to write Soc Sec checks. Soc Sec recipients would go ballistic, and so there’s practically zero chance the SSTF obligation won’t be paid.
What’s going to happen is we’re going to have to borrow/tax huge amounts of money to pay SSTF back for the money we took and spend in the general budget.
TallDave
ppGaz,
I don’t why I try to explain finance to you, you’re clearly not smart enough to understand it.
No one is talking about not paying SSTF back. The point I was making is that SSTF IOUs have a net value of zero.
srv
TD,
Nah, he wasn’t ACTING. COULDN’T BE THAT…
I suppose you believe everything you see on C-SPAN…
They knew who was going to vote what. Had they thought it was going to pass, someone else would have flipped.
CLUE: IT’S A FREAKING GAME THEY PLAY WITH YOU.
ppGaz
Call it whatever you like, Dave. We’re borrowing “huge amounts of money” now just to pay the bills and keep democracy on the march in Iraq.
The point is, the government will meet these obligations, because it has no choice. To refer to the SSTF as anything other than an obligation that must be met is just fanciful. It will be met. Prepare to be assimilated, bend over and open your …uh … wallet. Pay up, and stop whining.
TallDave
srv,
Well, you’ve joined the tinfoil brigade now.
John Cole
John S.- The egocentrism may derive from the fact that this is my blog, I am the one who mentioned Clinton, and Dave was responding to my post.
Seriously, though. I don’t know why anyone thinks that this post somehow tarnishes Clintons image. They did a lot of things right, including financing part of the debt in the short-term rather the long-term (something that was considered really risky), but Rubin pulled it off.
That does not mitigate the fact that the budget was never really balanced, per se.
TallDave
Again, NO ONE IS TALKING ABOUT NOT PAYING SSTF BACK.
We just people need to stop stealing SSTF money to spend in the budget.
Otto Man
Is that the same tinfoil brigade that thinks voting against the 1993 Clinton budget was somehow “leading the way”?
TallDave
No, that would be tinfoil brigade that says “Whatever the GOP does, they really mean the opposite.”
ppGaz
They are an obligation, Dave. They have whatever value the two parties to the transaction think they have.
They have whatever value you think “full faith and credit” has.
If you think that is zero, then good for you. For the sake of the rest of us, we must pray that you are wrong.
TallDave
Yeah, if anything I’d say the GOP is more to blame for not fixing the SSTF gimmick, since they’re supposed to be the responsible ones.
ppGaz
Dave, you said that the SSTF had a value of zero.
How does one steal zero?
Otto Man
Yeah… Clear Skies, Healthy Forests, Mission Accomplished. Who would ever doubt those guys?
TallDave
ppGaz,
Let me try to put this in terms you can understand.
Your brother borrows $500 from you. He gives you an IOU.
What’s the net value of the IOU to your family as a whole?
ZERO. It’s owed by one member of your family to another. The $500 value to you of the IOU is offset by the $500 obligation on him.
TallDave
Otto,
I’m not saying they’re not deceptive. But to claim the BBA wasn’t an attempt to balance the budget is, well, insane.
TallDave
No, I said the IOUs have a net value of zero.
KC
I didn’t think it was the actual tax cuts that increased revenue, but the fact that some tax cuts were allowed to lapse and that the IRS has stepped up enforcement.
TallDave
Also, I didn’t say anyone was stealing the IOUs. I said they were steaing the excess SS receipts and issuing IOUs.
Blue Neponset
TallDave,
I agree that the SSTF should be added to the budget deficit but the SSTF is not a bunch of IOU’s. The non-negotiable US government securities issued to the SSTF pay interest at market rates. IOU’s don’t do that.
What should we do with the SSTF? What investment is better than US Government securities? What would the SSTF have to invest in so its funds wouldn’t be stolen?
Otto Man
Yes, it was an attempt, but it was more politics than economics at stake there. It never had a chance of passing, but was meant to give the image that the Republicans were serious about balancing the budget.
If balancing the budget were a real priority for today’s GOP, then tell me why they haven’t done it in the past five years, despite controlling the White House and both houses of Congress for almost that entire time?
And please don’t use the pathetic dodge of “9/11 changed everything.” The bulk of Bush’s increased spending has come in domestic affairs (NCLB, the Medicare giveaway, and pork projects like the highway abomination).
This is a simple fact: When it was Clinton at the helm, with both Democratic and Republican Congresses, the budget was balanced for several years. When it was Bush at the helm, we’ve had the worst years of fiscal irresponsibility.
You can claim over and over and over again that the current Republican leadership is committed to fiscal responsibility, but there’s not a single shred of evidence to support that.
At least not in the reality the rest of us call home.
TallDave
It never had a chance of passing,
ONE VOTE. It missed by ONE VOTE.
You can claim over and over and over again that the current Republican leadership is committed to fiscal responsibility
Haven’t, and don’t.
KC
Man, it looks like Marshall’s got a doozy on the new House Republican offset plan. Looks like a nice portion is at best a typo, at worst a fraud.
Defense Guy
Krista
I particularly like this line from the first link:
An appeal to a common-sense notion in economics is laughable, especially this claim which is absolutely refuted by other ‘rules’ in that field. Also, it is amusing that they follow that up with a claim that they result in less revenue when the numbers have actually gone up. Who you gonna believe? Me, or your lying eyes?
TallDave
The non-negotiable US government securities issued to the SSTF pay interest at market rates. IOU’s don’t do that.
Why not? Write yourself an IOU. Specify it pays interest. See if anyone stops you.
What should we do with the SSTF? What investment is better than US Government securities? What would the SSTF have to invest in so its funds wouldn’t be stolen?
See, this is the genius part. This is how they polish the turd and call it fudge. “We’re investing in gov’t securities!” they tell us.
Now stop and think about that. The government is investing in government securities. It’s investing in securities that it issues! Essentially, it’s writing an IOU to itself.
Hey, I’m going to invest in TallDave securities. I’ve just issued $100 billion in TallDave bonds… and I sold them to myself. Net change in my worth: zero. Unfortunately, unlike the gov’t, I can’t then go out and spend that $100 billion and claim the IOUs cover it.
Otto Man
Yes, in the SENATE. Do you think that would’ve gotten 3/4 of the states to ratify?
Sorry, forgot I was talking to Bizarro Superman.
Boronx
The budget showed a surplus even without social security in 1999 and 2000, according to the CBO, anyway.
Defense Guy
Krista
Not to lay this out as a partisan claim, but this is also interesting. From the about page on that centers web site.
I don’t know anything about that organization, but having Krugmans endorsement would give me pause as to their objectivity.
Blue Neponset
I noticed you didn’t answer my question. If not non-negotiable US Securities what should we buy with the SSTF? (Nothing is an acceptable answer)
Tim F
Everybody has it wrong about the SSTF.
In th 80’s it became clear that Social Security would take in less than it paid out when the pig passed thruogh the python. The basig agreement made between Greenspan, the Republicans and congressional Democrats was to hose the middle-class in the short term in return for guaranteed benefits in the long term. For the twenty years or so that it would take for the python to start pooping pig bones, people earning less than the FICA salary cap would pay into a “fund” that didn’t really exist except as a gentleman’s agreement within the government, with the understanding that they were voluntarily hosing themselves to ensure that the “fund” helped them later.
The current Republican strategy amounts to breaking the agreement and spending the proceeds on base-building slush funds such defense contractors. Whether he knows it or not, TallDave is doing his part to help the Republicans welsh on an agreement they made twenty years ago.
ppGaz
I see. “Family as a whole.” A Zero Sum game of some kind.
So, you said that the SSTF is being “stolen.” If it has no value, how can it be stolen? What is being stolen?
The only things you can do with it are to satisfy the obligation, or default. That’s it.
TallDave
Yes, in the SENATE. Do you think that would’ve gotten 3/4 of the states to ratify?
Why not?
TallDave
Blue,
The answer of course is “Anything not issued by the same gov’t.”
TallDave
ppGaz,
No, you’re confusing the two tranactions.
The “stealing” part happens when the gov’t says “Oh yes, this SSTF surplus revenue is part of the budget, and thus we will spend it.”
Then, to make the books work, the gov’t says “Here, SSTF, have some bonds.”
The first transaction involves transfer of value, the second does not.
The problem is, the SSTF is *NOT* part of the budget. The real deficit is the reported deficit + the SSTF surplus.
KC
I think we should all face facts: eliminating all income taxes would create huge government surplus revenues. In fact, the real danger of dropping all income taxes, is that we’d probably increase Congress’s pension for spending. Indeed, the only way to stop Congress’s spending might be to tax ourselves. Hence, our current situation. While conservatives would like to completely eliminate taxes, they know that some taxes are needed to hinder Congress’s profligate ways. Thus, while we are increasing revenues consistently because of tax reductions, we must also keep some taxes in line, especially on the poor, in order to check liberals and RINO’s terrible spending habits.
Otto Man
Let’s see, since Dole made such a big issue out of this in the 1996 campaign and Clinton still took, what, 30 states that year, I’d have to assume they wouldn’t have suddenly jumped ship a year later.
But then again, it wouldn’t have needed all 30 states to vote against it, only thirteen. The easiest would be NY, NJ, MA, RI, CT, DE, MD, IL, MI, CA, OR, WA, HA. Add in other Clinton states and it seems even more likely. And if people were to point out to certain constituencies what a balanced budget requirement might mean to their pet causes — say, farmers with subsidies and ethanol producers — then I bet you’d see a whole lot more. IA, for sure.
TallDave
Tim F,
That’s a separate issue. The budget began being conflated with SSTF way before that, as a device to hide the cost of the Vietnam War and make deficits seem smaller than they were.
Tim F
Incentives favored the Balanced Budget amendment as a campaign issue, and strongly disfavored it as actual policy. There’s not a state in the union that doesn’t benefit from pork. Even if they got it through it would be repealed faster than abolition, with the tax-sponging red states leading the charge.
TallDave
Otto,
Why would they vote against a balanced budget?
Slides fattened ego
Boronx
Wow. I’m not sure which possiblity is worse. The fact that they might have intentionally misled or that they can’t do BASIC MATH.
jobiuspublius
Invisible Pork:
IIRC, some of us expressed concern that CONgress would try to use Katrina to continue to hate America. Not surprised. Iraq War, Katrina, soon Rita, when will the hate America crowd just go away to jail?
ppGaz
Aw, Dave, have a little faith. I know that when the time comes, and I am living on my govt pension being supported by your taxes, that you will do the right thing, the honorable thing, and open your wallet, and pay.
I love you, man.
Tim F
Tall Dave,
Be that as it may, anybody who suggests that the “trust fund” be used (in the long term) for anything other than Social Security is delivering a solid groin kick to the middle class who built it up in the first place.
You could argue that this makes perfect sense, given that the Republican party’s primary purpose to transfer influence and wealth away from the lower and middle classes.
TallDave
Alright, tinfoilers, take it up with Wiki.
http://en.wikipedia.org/wiki/Balanced_budget_amendment
The Republican takeover of Congress in 1994 led to a push for a balanced budget, forcing President Clinton to agree to reducing the deficit. Major economic growth and GOP-led spending controls such as welfare reform allowed for a balanced budget (when the Social Security surplus was counted as revenue) by early in Clinton’s second term – considerably earlier than what Clinton’s own projections for this had indicated and, afterwards, a surplus which actually allowed the retirement of some government debt. Momentarily, the deficit issue faded from view. Despite the nominal surplus, the national debt grew each year of the Clinton presidency since the surplus is not applied against spending in this calculation.[1] Out of office, former House Speaker Newt Gingrich called for continued payments toward the debt with a view to paying it off entirely. Perot’s less effective 1996 presidential bid was in part evidence of the declining significance of the deficit, and hence the Balanced Budget Amendment, as an issue.
TallDave
ppGaz,
That has nothing to do with my point.
ppGaz
That just makes me love you all the more.
Knowing that your generosity will be there when I need it, even after the way I’ve treated you in here.
[ sobbing ]
can’t talk right now ….
Blue Neponset
I don’t mean to play a game of gotcha with you but don’t you see a bunch of problems arising from the Federal Gov’t investing in private securities, precious metals, foreign gov’t securities or what have you? What happens if the stock market goes south when the SSTF comes due? Who gets to decide which corporate stock/bonds to purchase? Which country’s should we invest in? These and many more questions and a lot of risk can be and are avoided when the SSTF purchases US Gov’t securities instead.
Also, how are we going to replace the money we used to get from the SSTF? Borrow more? Tax more? Spend less?
Boronx
Wow. I’m not sure which possiblity is worse. The fact that they might have intentionally misled or that they can’t do BASIC MATH.
Do you mean John Cole or the CBO? If the CBO, what’s wrong with their numbers? They add up for me, course I have no idea if they are correct except my recollection from the time of reading stores saying “The budget is balanced even before social security is added!”
Otto Man
Well, for one reason, because if there’s a constitutional amendment to balance the budget at the federal level, the fulcrum of government spending would shift to the states. They’d either have to deny services or raise taxes. Do you think that’s a choice a state senator up for re-election would relish?
Also, since the federal BBA was much more stringent than the sham BBAs many states have, you can bet the federal purse would tighten more effectively than the state one. They’d be on their own, and up shit creek.
Tim F
The Republican plan is simple: keep the money.
DougJ
Must be the same reason they opposed the Clean Air Act, Operation Enduring Freedom, and No Child Left Behind. It’s because they hate America. They’d have to, to oppose things with such nice names.
Boronx
The Republican takeover of Congress in 1994 led to a push for a balanced budget,
That’s backwards. The push for a balanced budget and the associated tax increase led to the Republican take over of congress. You can look at deficit data and it’s a steady decrease from 1993 to 2000.
A suppose the Republican Congress is also the reason that we have huge budget surplusses these days. Obviously, with such stalwarts and a steadily growing economy to work with, they’ve balanced the budget, right?
Otto Man
Actually, the more I think about it, the red states might lead the charge against the BBA. They’re the ones who get more back from the federal government than they pay in, while the blue states send more to the feds than they get back. I doubt they’d cut themselves off from the teat so quickly.
jobiuspublius
Arch America Hater Nancy Pelosi sticks it to the mostly well-to-do:
Otto Man
Tall Dave, do you have any idea how Wikipedia entries are created? I’ll give you a hint — click on the “edit” tag and take a look.
I could change that page to say that Gingrich consulted with his pet unicorn before the 1994 elections, and it wouldn’t make it so.
TallDave
Federal Gov’t investing in private securities, precious metals, foreign gov’t securities or what have you?
Well, the gov’t does hold metals:
http://en.wikipedia.org/wiki/Gold_reserves
It really doesn’t matter though. The issue isn’t what they invest in; it’s that they don’t invest it at all, they spend it. Writing yourself IOUs isn’t “investing.”
DougJ
Tall Dave, the Republicans in Congress in the 90s deserve almost as much credit as Clinton for the budget surpluses (such as they were) that we had then. You’ll get no argument from any reasonable person about that. Note that I say “almost” since some of the most important steps took place in 93 and 94 when the Democrats controlled Congress.
But their behavior since Bush came in has been shameful. It is really unfair to intoxicated men who work on the sea to compare the current congress to drunken sailors.
TallDave
Otto,
Do you know how alien mind control works? You need tinfoil to block it.
Why do you think foil is made of aluminum now? Doesn’t that prove the aliens are in control?
TallDave
DougJ,
“Far more,” not almost as much.
But I agree, the current GOP has not been good on this.
Slides fattened ego
Boronx
I was refering to your link about the offset committe.
Otto Man
That’s it, Tall Dave. When your claims about the past are revealed to be lies and your predictions about the future are shown to be implausible, just result to bizarre taunts. Have fun with that.
Slides fattened ego
I have no problem with giving Clinton credit for the defecit reduction of the 90’s, so long as he also takes responsibility for allowing al Quada to fester and grow more dangerous.
TallDave
2/3 of the states apparently supported it.
Perhaps motivated by the number of state legislatures calling for such a convention approaching the required two-thirds, and recognizing its inability to make sufficient cuts on its own initative to balance the budget, Congress responded in 1985 with the Gramm-Rudman-Hollings Act,
Getting the last 1/12th could certainly have happened.
And I don’t even have to prove it was going to happen, just that it was a serious effort by the GOP, to refute the tinfoilers who are claiming they really opposed it.
Well enough wasting time arguing water is wet.
Ta-ta!
TallDave
otto,
It’s not my fault! I’m under alien control!
KC
Not to brag, but as I intimated above, you guys have missed the most important facts behind the current budget situation:
What I failed to add to this is that if we give conservative Republicans in Congress a few more years they’re sure to get the balance right. I mean, with current revenues poring into federal coffers, with a few more tax cuts, we’re sure to reach a balanced budget really soon. Just think: some small taxes on the poor to keep spending habits in line, but a balanced budget all the same. Then, if an emergency like a hurricane happens, we’ll drop all tax cuts, draw in those surplus revenues, and let the spenders have their way until reconstruction is done. Easy as cake!
Blue Neponset
It does matter. If you want to divest the SSTF of all US Gov’t Securities then you have to answer those questions I asked. If a better investment than those IOU’s is out there then you have a point, but you or anyone one, for that matter, can’t point to a safer or easier investment than U.S. Gov’t securities.
If you have a better idea for the SSTF then I am all ears, but I don’t think one exists.
Tim F
I see you point and grudgingly consider acknowledging that you may be…look! A jackalope!
Otto Man
Well, that would explain the complete lack of knowledge of American history or fiscal policy. OK, then.
Slides fattened ego
Tim F
You know what would be fantastic, but would require that we have adults as leaders? If they would stop acting as childish enemies, listened to each other, and tried to work together to solve the problems that our country currently has. The Republicans are too drunk with power to do it, and the Democrats are too pissed that they are not in charge anymore.
Jackelopes are delicious, especially when served with fresh snipe.
Boronx
I have no problem with giving Clinton credit for the defecit reduction of the 90’s, so long as he also takes responsibility for allowing al Quada to fester and grow more dangerous.
I’m sorry, but Newt Gingrich and the Republican congress take the lion’s share of the blame. They are the ones that kept inserting the “Let Al-Qaeda Fester” ammendments into popular bills, always against Clinton’s wishes.
Clinton shares some blame himself by not standing up to Gingrich on terrorism they way he stood up to him on the budget.
TallDave
Let me just drop off these last two links for Otto:
http://www.google.com/search?hl=en&q=1994+republican+budget
http://www.google.com/search?hl=en&lr=&q=aliens+tinfoil
Remmber: THEY ARE ALWAYS WATCHING!!
summr
Apparently sometimes they have just hours to read bills surpassing 300
pages. (See October 13 2001 NYT article by Robin Toner). Appropriately researching a bill in that kind of time-frame is pretty much not
going to happen and laziness has nothing to do with it. Incompetence (why
vote on something you haven’t actually read?) is another issue.
ppGaz
Maybe Dave will do better with this:
If the fund is more fly, you must buy!
Otto Man
Does anyone have a clue what Tall Dave is talking about? Other than the voices in his head?
Tim F
If the government invested the SSTF in diamonds and diamonds tanked, the party that came up with such a brilliant idea would become an electoral joke. Even suggesting such a boneheaded idea would ensure a veto-proof majority for the non-stupid party in an election cycle uninfluenced by war or major disasters.
Tim F
You simply can’t serve jackalope without a side-dish of genial, mature government. I particularly enjoy it while riding my pony.
DougJ
Because Lord knows Bush has really gotten Al Qaeda under control.
I’m willing to blame Bush for the current budget deficit if I can also blame him for not catching Osama bin Laden. Does that seem fair?
JWeidner
TallDave said:
All I can say is, I wish I was your brother. I’d take your $500 (and more!) and just remind you that the net value of our family hasn’t changed…just your balancesheet.
Defense Guy
Sure DougJ, just so long as it feeeels good for you. Don’t let me stop your good vibe train.
Is it too early to put Clinton up for sainthood or barring that is there some way to associate Bush with Satan? Although that second one might be an easier jump if you believe that Rove IS satan. Not saying you do of course.
srv
Otto,
While probably everybody on this thread would give divided gov’t in the 90’s having a positive effect on spending, TD, would give all the credit to the Reps and their faux BBA. Because everybody said they supported it, it was just the evil Dems (or aliens, whatever) holding back a truly sound fiscal policy.
If it keeps their cold hearts warm at night, let them have their dreams.
The surpluses of the last half of the 90’s has ALOT more do with dotmania than true success of divided gov’t. Divided gov’t didn’t reduce spending. It just slowed the growth.
Otto Man
Normally, I’d agree. But lately the conservative dreams are manifesting as nightmares in the waking world.
KC
Srv, you fail to note an important point, Clinton was for tax increases, conservative Republicans weren’t. This means that Clinton was basically for a deficit since tax increases decrease revenues. When the Republicans came into office, they did a number of things to decrease taxes and increase government revenues. You see, Republicans are for increased revenues and balanced budgets, Dems are for decreased revenues and unbalanced budgets. Clinton earns no credit when it comes to balancing the budget.
srv
KC,
Maybe you’re kidding.
No. In the 90’s, tax policy and GDP were not so coupled as Republican economic theory would apply. Yes, major tax increases can effect GDP, and thus tax revenues. But if that was really some absolute, then dotmania should have died in the bathtub. Republican and Democrat political policy of the 90’s had nothing to with the dotmania. There is no credit due them. Zilch.
As for the Reps being for balanced budgets, yes, I hear what they say, and I see no evidence in my life to believe what they say.
srv
KC,
I believe what my mother told me (an FDR dem).
“Dems tax and spend and Reps cut taxes and spend. But at least the Dems don’t lie about it”.
KC
Srv, I’m joking. I just enjoy parodying the logic and methods of some conservatives out there. Kevin Drum really gets to the heart of some of their issues though in real time.
DougJ
I don’t Rove is Satan. I imagine Satan being a bit better dressed, a bit more suave, and a bit less interested in small potatoes stuff like leaking the names of CIA operatives. I think Satan has more of a big picture approach to things, he’s got more of a vision thing. I’m thinking more someone like….Sting.
DougJ
Writing that last post had the undesired effect of causing me to imagine Karl Rove having tantric sex. I think I’ll be skipping dinner tonight.
CaseyL
My brain! My brain! Where’s the bleepin’ bleach??!!
Sean
I’d like to take exception to this.
If you are going to have health care for poor non-working elderly, would you rather give someone a prescription for Cholesterol lowering drugs or $150,000 for bypass surgery. Currnetly, we give the surgery but not the blood pressure and cholesterol medication.
The drug benifit is conceptually the right thing to do in the current medical treatment environment. What about the choice of Antibiotics versus an old person having their toes/foot amputated and Medicare paying for wheel chairs and ramps. These are real situations. Medicine is cost effective versus the entirely predictable surgical treatments we do pay for.
I am not versed in the particulars of the Medicare Drug Benifit as it currently enacted. However, not letting the US government negotiate like any other insurance carrier is a little curious dontcha think.
jg
One doesn’t cause the other so why do both have to be true?
Boronx
but it makes me a little distressed to think that people think the budget was really ‘balanced’ even during the halycon years of the Clinton presidency. It wasn’t, but for the surplus fund from social security.
John Cole, are you going to give an explanation for why you think the budget was not really balanced?
John S.
John-
I agree with you entirely. My gripe was that Dave managed to cherrypick the one thing you had to say about Clinton (and which I certainly didn’t see as you trying to trash him).
I actually enjoyed your post, but was (and am) fairly disgusted with the likes of TallDave and his twisted logic wherein he takes a pre-conceived notion and attempts to work his rationale backwards from it.
Anyway, I hope that clear things up.
Boronx
Seriously, though. I don’t know why anyone thinks that this post somehow tarnishes Clintons image.
This post seems to tarnish Clinton’s image because it’s advancing what seems to me at least, in my cursory googling, to be a falsehood about it. Not a major offense, and not, apparantly, written in bad faith, but one that ought to be corrected if it can’t be supported.
goonie bird
WHEN YOU POLITICIAN SPEND YOUR TAXES AWAY WHO YA GONNA CALL PORK BUSTER WHEN SOMETHIN WERDS AND SPENDIN HERE WHO YA GONNA CALL PORKBUSTERS
ppGaz
Goon, you know a thread is dead when your posts actually look good here.
Have you heard? The Bird is the Word.
demimondian
No! _Grease_ is the word (it’s the word // that you heard // It’s got groove // It’s got meaning.)
John Cole
Boronx, you are just wrong.
Boronx
John Cole, the point of the article you link to seems to be that social security surplus is treated as revenue, and that’s correct AFAIK.
If you look at the CBO table I linked to, they also include the SSTF surplus in a separate column, so you can easily compare it from official deficit.
According to the CBO, the official deficit in 1999 and 2000 were larger than the social security surplus.
Can you please explain how that fits in with your statement in the main post?
BTW, the article you linked to was also written in ’98, before any of the true surplusses were achieved. It mentions the ’99 budget as shooting for a small deficit. My recollection is that revenue that year was higher than expected, which resulted in the very small surplus instead.
Boronx
When I say the deficits were larger than the SSTF surplus, I mean that the budget surplus was larger than the SSTF surplus.
(Total budget column > social security column)
Boronx
You can also look at the On Budget columng , which, if I understand correctly, is the Congressional Budget Offices own calculation of the deficit sans social security. Again, it shows black for 1999 and 2000.
Boronx
Here is the social security association’s report on it’s surpluses.
The Social Security surplus in 2000 was 153 billion, that’s more than 80 billion less than the unified budget surplus.
If you take their Social Secuirty number, which is a few billion higher than the CBO number, then 1999 budget was a small on-budget deficit.
Boronx
Going back to your link, John Cole,
You can look at their graph and see that the predicted unified budget surplus in 2000 was about 10 billion dollars, with an on buget prediction about 120 billion less than that.
Well the actual unified surplus was almost 240 billion dollars. These guys were off by about 230 billion.
Defense Guy
jg
It doesn’t HAVE to be true, it just is. I don’t think anyone could have been expected to know it was going to get as bad as it has, but it has. As a country, it is obvious we should have been paying far more attention to Islamic Fascists who are willing to use mass murder and extortion to get what they want.
Tim F
Def guy,
You’re building an alternative-history storyline. Why didn’t Clinton use his ability to fly, invlunerability and x-ray vision to hunt down bin Laden personally? Why?!? I understand the need to bash Clinton, but this sounds like half-informed armchair quarterbacking. Clinton sure as hell took the threat of terrorism more seriously than Bush did.
John Cole
Boronx- It is my understanding that during the balanced budget years, the unified surplus was made up of off-budget funds (social security). Show me otherwise, and I will retract my statement.
And I don’t mean estimates.
goonie bird
He slimed me
Boronx
Boronx- It is my understanding that during the balanced budget years, the unified surplus was made up of off-budget funds (social security). Show me otherwise, and I will retract my statement.
That’s my understanding, too, for every year up to 2000. The 1999 On-Budget surplus was less than 10 Billion, if it existed at all.
But the numbers I pointed to were not estimates, they were the CBO budget numbers calculated as of January this year and the social security accounting of it’s trust fund also as of this year.
We’ve never had a trust fund surplus even close to 200 billion dollars, much less 240 billion.
Jim H.
For all those interested in observing government spending as it happens, consider WashingtonWatch.com. The site publishes per-family estimates of the costs and occassional savings from pending federal legislation. Constantly updated.
http://www.washingtonwatch.com