One Nation, Subsidized - Time Magazine - By Michael Grunwald

Reproduced here in its entirety for fair use and discussion purposes. My responses interlaced in bold.

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One Nation on Welfare. Living your life on the dole - By Michael Grunwald

The sun is shining in Miami Beach, and I wake up in subsidized housing. l throw on a T shirt made of subsidized cotton, brush my teeth with subsidized water and eat cereal made of subsidized grain.

Soon the chaos begins, two hours of pillow forts, dance parties and other craziness with two hyper kids and two hyper Boston terriers, until our subsidized nanny arrives to watch our 2-year-old. My wife Cristina then drives to her subsidized job while listening to the subsidized news on public radio. I bike our 4-year-old to school on public roads, play tennis on a public court and head home for a subsidized shower. Then I turn on my computer with subsidized electricity and start work in my subsidized home office.

It's just another manic Monday; brought to us by the deep pockets of Big Government. The sunshine is a natural perk, and while our kids are tax deductible, the fun we have with them is not: The dogs are on our dime too. Otherwise, taxpayers help support just about every aspect of our lives. (If all of us are supporting each other, why not have all of us just keep what we have and not circulate it through government? And by the way, is the "help" voluntary? Did anyone get asked if they want to help?)

Of course, we're taxpayers too, and we don't exactly fit the stereotype of entitled welfare queens. Cristina is an attorney and until recently was a small-business owner. I'm a journalist, an economic red flag these days, but I work for the company behind the Harry Potter and Batman movies, so at press time I was still getting paid. My family's subsidies are not the handouts to the poor that help fuel America's political culture wars but the kind of government goodies that make the comfortable even more comfortable.

Our federally subsidized housing, for example, is a two story Art Deco home in the overpriced heart of South Beach. But our mortgage interest is a personal deduction, my home office is a business deduction, and federal subsidies keep our flood insurance cheap. Even our property taxes are deductible. So thanks for your help. (Deductions are not subsidies.)

The 2012 election is shaping up as a debate over Big Government, but it is only loosely tethered to the reality of Big Government. The vast majority of federal spending goes to defense, health care, and Social Security, plus interest payments on the debt we've run up paying for defense, (This is a common liberal meme, that the military is funded by debt. However, one can only arrive at this conclusion by deeming one's preferred government programs as funded, thereby allowing one to categorize disdained programs like the military as being funded by debt.)

health care and Social Security. Nondefense discretionary spending - Washingtonese for "everything else," from the FBI to the TSA to the center for grape genetics---amounts to only 12% of the budget. (This little acknowledgment is allowed to pass, but it ought to scare everyone. Social Security in particular is the elephant in the room, gobbling up gargantuan amounts of money, and that's increasing daily. Soon SS will eat 100% of the budget.)

Still, it's a big government. The U.S. did not spend even $1 billion in 1912; it will spend $3.8 trillion in 2012 on everything from Missing Alzheimer's Disease Patient Assistance ($593,843) to Snow Survey and Water Supply Forecasting ($9,409,400), from mortgage insurance for manufactured homes ($64,724,187) to iron worker training on Indian reservations. These will be an additional $1.3 trillion in tax expenditures, federal benefits (like the deductions for my 401(k) (It is interesting how he phrases this. Deductions are termed “federal benefits,” like a welfare payment or a bailout. The fact is, it is his money first. He earned it. It is his. The fact the government chose not to take it from him is not a benefit. Him keeping his own money ought to be his right.) 

and my nanny's salary) that are basically identical to those normal spending programs except that they happen to be provided through the tax code.

The rise of the Tea Party and the weakness of the Obama economy have fueled a Republican narrative about Big Government as a threat to liberty, redistributing wealth from honorable Americans to undeserving moochers, from taxpaying "makers" to freeloading "takers.” (Big government is a threat to liberty. Indisputable. But beyond that, there is no such narrative that wealth is being redistributed from “honorable Americans” to “undeserving moochers.” The narrative is that government is creating a class of people who is deems as more worthy of your money than you are. 

There are many who are hurting and are struggling financially. They are not moochers. They are in need. However, it is for compassionate people, giving because they are moved in their heart to do so, that will help these people. Government should not, and in fact, has proven it can not, improve the lives of the poor.)

In fact, most Americans are makers and takers - proud of our making, blind to our taking. Republicans often point out that only half the country pays income taxes, but just about all Americans pay taxes: payroll taxes, state and local taxes, gas taxes and much more. (Diversionary tactic. The original point that nearly half of Americans pay no income tax, and therefore have no stake in the scaling back of Big Government, remains true. The fact that the poor pay numerous other taxes is irrelevant. 

Also, this is a problem that manifests from Big Government. Big Government creates burdens on the poor, not just financially, but in terms of culture and society. Witness the devastation of the poor in the inner city. These problems belong squarely at the feet of government.) 

The problem is that we pay in $2.5 trillion and pay out $3.8 trillion. And these trillions of dollars don't all go to undeserving moochers, (Well of course not. No one has said they do. And, "we," as in government, spends more than it takes in because it cannot control spending. It's a spending problem.) 

except insofar as we're all undeserving moochers. (The federal government is mandated by the Constitution to provide certain enumerated duties. All the rest is left to the states, or the people. The people delegate certain agreed duties to state and local governments. None of this makes us moochers, except to the degree that the government forces us to accept its beneficence.)

The Right routinely portrays government as a giant mess of Solyndra failures, lavish agency conferences in Vegas and pork for society's leeches. But my taxpayer-supported morning didn't feel like mooching at the time.

For example, my family pays for that water I use to brush my teeth, about $100 a month. But that's a small fraction of the true cost of delivering clean water to our home and treating the sewage that leaves our home. (And who pays the rest? Government has no money of its own. It must first help itself to the contents of someone else’s pocket in order to pay for that clean water you drink. Why should the author, rich enough to afford a nanny, have his water subsidized?) 

And it certainly doesn't reflect the $15 billion federal project to protect and restore the ravaged Everglades, which sit on top of the aquifers that provide our drinking water. Most Americans think of the water that comes out of our faucets as an entitlement, not a handout, but it's a government service, and it's often subsidized. (This does not make the case that it should be subsidized, however. As far as what “most Americans” believe, that is another issue. But beyond that, most clean water is provided by local and county governments, not the feds. What people might support has a lot to do with how much the federal government has involved itself in local affairs, funded by local people to local governments.)

Similarly, my family pays more than $200 a month for the electricity that powers our toaster at breakfast. But that number would be much higher if the feds didn't subsidize the construction, liability insurance and just about every other cost associated with my utility's nuclear power plant (Can we ask why it costs so much to build a nuclear plant? Would it have anything to do with onerous government regulation and permitting, as well as court awards that drive up the cost of that liability insurance? And can we also ask how many nuclear plants have been built in the last 20 years? Is the answer, like, zero?) 

while also providing generous tax advantages ("depletion allowances,” "intangible drilling costs" and so forth) for natural gas and other fossil fuels. The $487 we're paying this year for federal flood insurance is also outrageously low, considering that our low-lying street floods all the time, that a major hurricane could wipe out Miami Beach and that the Property Casualty Insurers Association of America estimates that premiums in high-risk areas would be three times as high without government aid. (Would the author care to explain why he thinks he should not pay for him to live in a risky area? Why should someone in Montana or New York subsidize his lavish lifestyle?)

Some federal largess - tax breaks for NASCAR racetracks ($40 million) and subsidies for rum distilleries ($172 million and rural airports ($200 million - is just silly. There's no reason my poker buddies should be able to deduct the gambling losses I inflict on them once a month (just kidding, guys!). (The author has yet to justify any of his "subsidies.)

The silliest handouts that brighten my morning are the boondoggles that funnel billions to America's cotton and grain farmers and maybe knock a few cents off the price of my T shirts and my kids' breakfast waffles. (Ahh, here we have a swerve into the truth: He may deem himself a moocher on the government dole, but many of the things he chronicles amounts to pennies of subsidies. He would hardly miss the small amount of increase in some products when they are no longer subsidized. 

But even if such a circumstance happened, we might not even experience any fallout from government abandoning its interventionist policies. Once the government has released its stranglehold on the economy, it will equalize and adjust. Quite likely, the cost of goods will go down once business is freed to offer products people actually want to buy in the form they want to buy them.)

Uncle Sam sends at least $15 billion every year to farmers and agribusinesses in the form of grants, loans, crop insurance and other goodies. The farm lobby is so omnipotent in Washington that when the World Trade Organization ruled that U.S. handouts give our cotton farmers an unfair advantage over Brazil, the U.S. cut a deal to shovel $147 million a year to Brazilian cotton farmers rather than kick our own farmers off the dole. Our food and clothing may seem cheap, but, oh, we pay for them.

Reasonable people can disagree about most government aid. I enjoy NPR, even though I don't really see why it needs about $3 million a year of our tax dollars to produce good journalism; public radio stations receive only about 15% of their revenue from the government anyway. (What, they don’t get all these other subsidies and benefits you have been chronicling in your article? They don’t get subsidized water or highways? 

But this tells only part of the equation, anyway. There are a variety of funding tentacles that connect Public Radio and Public television to the taxpayer. And it is on principle that conservatives object to government funding of the news, as well as the obvious fact that Big Bird makes more money than Romney does. He doesn't need taxpayer funding. Constitutionally speaking, he shouldn't have it.) 

On the other hand, I thank my $500 Florida tax rebate for the energy efficient water heater that warms my shower made great sense, promoting economic, environmental and national security by reducing fossil fuel use. (Has fossil fuel use actually reduced? No. Is it a constitutional activity of government to modify our behaviors as to what products we buy? No. Should we accept that government knows better than us what is good for us? No!)

Unless you're a hardcore libertarian, it probably doesn't bother you that the city of Miami Beach spends $500 million a year building roads, fixing potholes, picking up trash, putting out fires and creating bike lanes that make my cycling somewhat less life-threatening. (It doesn't take a”hardcore libertarian” to know that there is a large difference between the voter-approved activities of local and state governments, and the unconstitutional activities of the federal government.) 

The city also owns my local tennis courts, which are receiving a somewhat controversial $5 million upgrade, as well as the playground my 2 year old visits frequently and the track where Cristina and I work out much less frequently My mayor, Matti Herrera Bower, told me tennis players are the city's most aggressive and obnoxious special interest. We're the farmers of Miami Beach. (Indeed, it's this entitlement mentality, which the government is all to happy to play into in order to get power and pay off valuable constituents for their votes, that has brought us to the brink of financial ruin.)

When I spoke to Bower, a former dental assistant and PTA mom who got into politics after years of community activism, the FBI had just busted a bunch of city code inspectors for shaking down a nightclub owner, (Which brings up the obvious question, who protects us from the abuses of a too big and oppressive government when it goes out of control?) 

and the city manager had just quit. “MIAMI BEACH SINKING IN A VAST SWAMP OF DISHONESTY,” a Miami Herald column declared. Citizens notice the bad news, Bower said with a sigh, but they don't appreciate that government keeps them safe and cleans their streets (Notice how the subject is changed. Government officials involved in illegal activities is magically transformed into the innocuous street cleaning). 

They're not too interested in learning more, either; Bower holds regular Mayor on the Move forums to bring City Hall to Miami Beach's neighborhoods but only two residents showed up to the last one. "There's this perception that government is all dirty, and perception is 99% of what matters," Bower says. "People are busy living their lives. They don't understand where their taxes go and what they get." (In other words, people are so stupid. They don’t understand stuff. They just don’t get how government takes such good care of them. 

But in actual fact, she is right that people want to live their lives. A law-abiding citizen, pursuing their private interests, should not have to pay attention to what government is doing. Government should not have that level of power. Government forces us to think about it every day. We are forced to save receipts for our taxes, to check if we’re in the city limits before we use our cell phones, we are forced to check with government before filling a puddle with dirt. 

Government inserts itself into our lives in so many little ways, and people just don’t want to deal with it. They want to be left alone, and they want to make their own lives and not be told what their doing is offensive, bigoted, fattening, or harmful to the snail darter.)

One thing my family gets from government is Cristina's paycheck from an advocacy group called Americans for Immigrant justice, which is nearly 30% funded by the feds. Cristina is paid less than she would make at a private law firm, though more than most Americans, to represent undocumented minors in detention centers - in other words, kids in jail some as young as 6, many victims of gang rape, gang terror or horrific family abuse. Cristina helps save the time of judges and immigration officials by advising these kids about their rights, and she probably saves taxpayers money overall by advising her clients when they have no legal case for staying. (In other words, because of the huge bureaucracy and plethora of government activities, it is so wasteful and bloated that the author can justify his wife’s government job because it alleviates what government itself has created.) 

That said, it's unlikely that her job would exist without Uncle Sam's help.

This is true for huge numbers of Americans. Government is still America's largest job sector, directly employing about 22 million workers at the federal, state and local levels - which means teachers, cops, prison guards, park rangers, coroners, prosecutors, you name it. It is impossible to estimate how many jobs the federal government creates indirectly (Government does not create jobs. It creates employment by obtaining its funding from the private sector. The private sector then does not have money to hire as many people, or to make a capital purchase, or to invest in a new factory. The government is a parasite and creates nothing.) 

through contracts for everything from fighter jets to the guys who manage my tennis courts. Other industries depend on government, like health care, lobbying and Washington real estate. (This is simply wealth redirected. Of course government money attracts other entities. But this is not new wealth, for government does not create wealth. This is simply a variation of the Broken Window Fallacy.)

And the entire nonprofit world depends on the charitable tax deduction which costs the Treasury about $40 billion a year. (No, no, no! Money that the taxpayer gets to keep costs the government nothing! It is not entitled to the money. The only party that gets stuck with any cost is the taxpayer.)

Obama proposed to limit it for rich donors, but charities went berserk, and with anti tax Republicans running the House, Congress isn't eliminating tax breaks these days.

That's especially true of the tax breaks that deprive the Treasury (No, no, no! The Treasury is not entitled to our money. It is our money, and the Treasury takes it from us. When it does not take it, it is because it belongs to taxpayers.) 

of the most revenue because they tend to go to taxpayers with the most income. Take that mortgage - interest deduction, the third ­costliest tax expenditure at $94 billion a year. It's available only to homeowners, who tend to be better off than renters. And since it's a deduction from your income, it's worth more to taxpayers who earn more. That's because the higher your income, the higher your tax bracket, and if you are in the top brackets, you can deduct a bigger portion of your mortgage interest from your taxes Politicians love providing benefits through the tax code because it makes them look like tax cutters rather than spenders, And a politician who tried to get rid of the mortgage deduction would probably become an ex-politician (The lack of courage from politicians is nothing new. Neither is their spendthrift habits. This must change if the republic is to survive, however.)

I usually spend most of the afternoon in my office, with occasional soccer breaks when 2 year old Lina bangs on my door and shouts, "Kick ball me!" I often grab lunch with a friend – maybe Xavier, a private-equity guy, or Damian, a developer, or Alan, an environmental activist. I do physical therapy twice a week for a bum shoulder, Except for my escape with Lina, who'd be a more convincing athlete if she didn't carry a doll onto the field, this is all subsidized too.

The physical therapy is helping my aching shoulder, but it's also helping drive the U.S. toward insolvency. We're not Greece or anything like Greece, but we do have a long-term debt problem, and it's almost entirely a result of rising health care costs (No it’s due almost entirely to the fact that government spends $.49 of every health care dollar. It is the 600 pound gorilla in the room, it controls the agenda, it is the powerbroker. Its involvement in the healthcare market has caused nearly all of the problems it now purports to solve.)

On graphs of long-term government ­spending projections, health care looks like a ski slope, and everything else looks like a sidewalk. Most of the problem is Medicare and Medicaid, which spend about $800 billion and rising a year to cover the elderly and the poor. But the tax advantages for health care are the country's costliest tax expenditure, draining the Treasury of $84 billion a year. (Or maybe I can utilize the author’s technique and deem the government healthcare expenditure as debt spending, since I consider other programs to be funded by revenues, thus leaving these programs as the cause of the debt crisis.)

Health benefits provided by employers are tax exempt, which encourages Time Inc. to give me better benefits than it otherwise might have. That may have encouraged me to get my shoulder checked out earlier than I otherwise would have, which might save me from costly surgery. Then again, my orthopedist might not have done an MRI in addition to an X ray if I didn't have such comprehensive insurance; when the tax code rewards a behavior, like consuming health care, people do more of that behavior. (And here we have illustrated for us the quintessential problem of massive government intervention into the economy and peoples’ lives. There is no possible way for government to control all the behaviors and outcomes of its private sector interventions. 

On one hand, maybe costs are lowered or a benefit is provided. On the other hand, another industry is affected, or behavior is changed, or a hand is shoved out for a gimmee. Because it isn't possible for government to control the ripple effects of its policies,, the government pretends these effects don’t exist. 

Therefore, a $200 billion tax hike is expected to produce $200 in revenue, but doesn’t because people change their behavior to avoid the tax. A ban on soft drinks doesn’t reduce obesity, it increases the number of smaller drinks sold. A tax on cigarettes doesn’t generate more revenue or reduce smoking. It simply drives people to make their purchases where the taxes are lower.)

I also benefit from another huge loophole in the tax code: the exemption for 401(k)s and other savings plans, which costs the Treasury $138 billion a year (Another example of the false idea that government is entitle to our money and only lets us keep it because it is beneficent.) 

Every $500 I save for retirement depletes the Treasury (Here he goes again…) 

of about $135 it would otherwise take from me in taxes. Yes, there is a legitimate policy interest in promoting saving, (There is?) 

but this is another example of the tax code incentivizing people with money to do things they would have done anyway, like own a home, buy health insurance or hire a nanny. (If these are things people will do anyway, how are they incentives?) 

Investors and financiers also enjoy huge tax advantages like Wall Street's $1 billion to $2 billion carried interest loophole, which keeps hedge­fund managers' taxes at janitor level. (Typical of many on the left, top marginal rates get confused with total taxes paid. Janitors on the whole pay a lower tax rate than the rich, as well as an infinitesimally small raw dollar amount compared to the rich.)

But my sweetest tax advantage does not come from being a homeowner, a patient or a saver, it comes from being a kinda-sorta businessman. If you make decent money and you're not deducting business expenses, get an accountant - which, incidentally, is also tax-deductible. On my tax forms, I’m not just a dude at a magazine, I'm also an "author, lecturer," which lets me slice some personal business expenses off the top of my income. I'm conservative about deductions - nothing to see here, IRS! (This is part of the conservative case for limited government. Even the author gives in to fear about what the government can do to him if they perceive him to make a misstep. Government that has the power to do this is a government ripe for stripping of that power.)

- ­but my accountant says those business-­ish lunches with my work related pals are partly deductible. So are most books I buy, 17% of my utility bills – my home office is 17% of our home - and some of my travel. I don't know how much I'll deduct from my trip to San Francisco for my brother's wedding, but it won't be nothing because I did some book interviews while I was there.

The business community frequently complains about taxes, but the tax code turns out to be cluttered with pro business incentives (As well it should be, since business is the engine of prosperity. More important, business taxes get passed to the final consumer as a part of the product’s pricing. So businesses do not pay any tax at all. The individual bears the burden of all taxes.) 

In fact, as we discovered when Cristina opened a retail store just as the recession hit, the only thing that's more advantageous for tax purposes than opening a business is opening a failing business. When the store lost money during the Great Recession, the losses helped reduce our tax liability by more than half. We learned an expensive lesson in entrepreneurial risk taking, but Uncle Sam made it much less expensive. (For you, yes. But for someone else, well, they paid for yours.)

The workday ends. Cristina drives home, past a $49 million federally funded rail tunnel, and gets cash from our bank, which was bailed out to the tune of $45 billion by the U.S. government. Our nanny takes a public bus home. Then it's another hour of gymnastics, charades and other unsubsidized fun before we deposit the kids in front of the T.V. - riot to watch mindless crap, because we would never tranquilize them that way, but to watch worthy programs like Dinosaur Train and Sid the Science Kid that tend to be supported by federal grants. It's a much better way to tranquilize them.

My life on the dole is hardly unique. The website cfda.gov lists 2238 federal assistance programs, from the $7.5 million Incentive Gran to Prohibit Racial Profiling to the $4 million Wild Horse and Burro Resource Management. Redundancies jump off the screen. The $24 billion-a-year agriculture Department is essentially running a bonus government for rural America with its own education, housing, transportation, energy, health, business promotion and environmental regulation programs. The $2.5 billion a year Bureau of Indian Affairs supports a duplicate government for Native Americans. I suggested to one Administration official that the $662 billion the Pentagon spends on service members, their families and veterans is yet another U.S. government. "No, the Pentagon runs a Swedish government," he corrected me. "It's a socialist paradise!"

Government investment affects our lives in all kinds of subtler ways, from the Pentagon research that led to the development of the internet (This is false. Private enterprise laid the groundwork for the internet.) 

to the one-sided deal that subsidized a $213 million arena for the basketball team I root for obsessively. Americans Tell pollsters they don't like government, much less the taxes they pay to fund government, but they tend to support Medicare, the military, (A constitutionally mandated activity.)

and most other services government provides. This is why politicians tend to spend a lot of time talking about shrinking government than actually shrinking government. President Obama talks a lot about trimming the fat, and Republican leaders talk about almost nothing but trimming the fat. But the status quo has largely prevailed (This is a political problem, not a failure of small government advocates. If people were educated in economics rather than kept ignorant by the public schools and writers such as the author, perhaps they would realize that their votes are being bought by these programs, and every single one of them is paid for by someone else, whose money was forcibly extracted from them to fund the societal objectives of government.)

The explosion of Big Government under Obama is mostly a myth; the public workforce has actually shrunk by half a million workers during his presidency. (Another popular myth among the Left. Government debt has increased over $6 trillion in the last four years. That means government has been too big for the revenue it has taken in. Maybe its absolute size has not increased, but clearly it has spent a huge amount more than it has taken in, which conclusively means it is too big.) 

That said, Obama hasn't been much of a fat trimmer, either. His halfhearted efforts to rein in excessive spending got off to a laughable staxt in April 2009, when he publicly ordered his Cabinet to find $100 million–with–an-m worth of waste to cut; a rounding error in a $3.6 trillion–with–a-t budget. He later killed a $143 million fighter jet the Pentagon didn't want as well as a $190 million maritime navigation system rendered obsolete by GPS, then agreed to more than 2 trillion in long-range cuts after Republicans threatened to force the Treasury into default in 2011. (More left wing spin. If two sides cannot come together in agreement, it always seems to be the Republicans are the ones blamed. But this is a two party system, and had the Democrats gave in, there would have been no crisis.)

But those cuts are still mostly theoretical, depending on what happens in the fall election. Meanwhile, the Republican Party has rallied around House Budget Committee chairman Paul Ryan's long term blueprint for deep and specified deficit-expanding tax cuts (Another left-wing spin. Tax cuts do not expand the debt.) 

paired with deep (but mostly unspecified) cuts in nondefense spending. GOP presidential nominee Mitt Romney embraced the Ryan plan during the primaries and then put Ryan on his ticket, but he has been even cagier about what he intends to cut beyond small-dollar Republican targets like Amtrak and NPR. (Contrast that with Obama's plan, which is really not a plan, which has worsened our situation and plunged us toward the brink of bankruptcy.)

Independent analysts have suggested that if the U. S. actually followed the Ryan outline, by 2050 there would be no room in the budget for anything but defense, Social Security and health care. (Which will also happen in 2025 if we leave it as is.)

But even if Republicans take back Washington, cutting isn't a foregone conclusion; government spending exploded when they controlled the nation's capital in the Bush era. (Which is why the TEA party came to be. Conservatives have been very critical of the big spenders during the Bush administration. That is why the TEA party is so effective. It is no a force that can actually hold politicians’ feet to the fire.) 

Every line item has lobbyists watching its back, (Exactly. With so much money at stake, lobbyists can hardly be blamed to attempt to pry money out of government.)

and when you can get a reputation as a fiscally responsible budget cutter without doing the politically difficult budget cutting, why bother?

My family’s asleep. I’m reading the mail, courtesy of the U.S. Postal Service, which is hemorrhaging cash in the e-mail era. The USPS is a classic example of a problem Washington can't fix. It clearly needs to cut costs and raise revenues. But the obvious cost reducers, like ending Saturday snail ­mail delivery and closing rural post offices, and the obvious revenue enhancer, increasing stamp prices, are DOA on Capitol Hill.

Liberals are correct that we rely on government much more than we realize. Conservatives are correct that government tries to do too many things. Republicans have seized on the Obama campaign's Life of Julia online tool, showing how one woman might benefit from Head Start, tuition aid, Medicare and other federal programs during her life, to accuse Democrats of viewing Americans as cradle-to-­grave wards of the state. Democrats have portrayed Republicans as anti-government absolutists in thrall to the Tea Party, eager to deprive Americans of benefits we like and expect. There's some truth in those critiques too.

But those of us who think government has an important role to play in American life ought to support reining in the excesses that give government a bad name. (This is a false choice. Conservatives are not anarchists.) 

When I asked analysts at the anti-government (A false characterization. The Cato Institute is a libertarian organization dedicated to constitutionally-limited government. It is not anti-government.) 

Cato Institute and the liberal Center on Budget and Policy Priorities what was the most wasteful government spending, they all gave the same answer: farm subsidies. A coalition of taxpayer activists and green groups recently proposed axing $700 billion worth of environmentally destructive federal largess from fossil fuel subsidies to sprawl roads to pork barrel water projects that drain wetlands. There is broad agreement among eggheads that tax perks for yachts, corporate jets and mortgage interest on mansions ought to go as well.

But it's hard to see the finger-in-the-­wind political world following the wonk world's lead. The costliest spending programs affect the military and the elderly. And the costliest tax expenditures affect families like mine. We're the kind of moochers who vote.

What men don't tell their wives - David Morrow

I have to admit,  a number of these resonate with me.

• • Women train their husbands to conceal the truth from them.
  • We are so frustrated when we tell you the truth and you freak out.
  • Men compare wives. The man with the best looking wife wins.
  • People say that men have all the power in society, but it doesn’t feel that way to most men.
  • Most men are afraid to admit weaknesses – especially to their wives.
  • A voice in our head tells us to have sex with every attractive woman of childbearing age.
  • Today’s level of temptation and sexual stimulation is completely unprecedented in human history.
  • Men check out women all the time. At work. At school. In public. And yes, even at church.
  • Every man keeps a sexual scrapbook filled with images and memories. Most men would love to be rid of this book. Women do not have a scrapbook.
  • Men are at their core providers and protectors. The key to our happiness is when we’re healthy in these two roles.
  • The person a man protects most his himself. Just about every dysfunction common to men springs from self-protection.
  • Masculine ways of child rearing are “out” while feminine ones are “in”
  • At work I’m a genius. At home I’m a dunce.
  • Wives who consistently refuse sex to their husbands (or who use sex as a reward for good behavior) are asking for trouble.
  • Men who share their feelings with friends or at work are ridiculed.
  • Men are tired of being seen as 100% of the problem in their marriages.
  • Many Christian men feel their wives are better at “doing church” than they are.
  • A lot of women control their husbands with their anger.
  • When I ask men where they experience God’s presence most fully, they rarely say “in church.” Instead, they almost always mention an outdoor location.
  • Women are born improvers. They treat their husbands like computer software: a product you buy once and then continuously upgrade.
  • A woman who dresses shabbily around her husband is sending him a deadly message: If you want to see a beautiful woman, look elsewhere.
  • Women, the key to his sexual enjoyment is your enjoyment. In other words, if you are enjoying sex, he’s enjoying sex. It’s all about pleasing you.
  • Don’t make your husband guess about what pleases you. Tell him.
  • Less than one-quarter of men feel actively appreciated at home.
  • Women expect their husbands to read their minds.
  • Sometimes women fall in love with their church, and husbands become jealous.
  • A lot of women manage the relationships in the household, to the point where no one has a relationship with anyone else. It all goes through mom.

Voters should support compromise in election - Bozeman Chronicle

This opinion piece appeared in today's Bozeman Chronicle. Reproduced in full for fair use and discussion purposes. My commentary and then the article.

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The Chronicle supports Democrats Franke Wilmer, Kathleen Williams, JP Pomnichowski, and Mike Phillips, plus a couple of Republicans. The reason these Democrats were named is apparently their willingness to compromise. Compromise, though, is not what you think it is. The way compromise plays out is getting Republicans on board with what the Democrats want to do. So if the Democrats want to increase spending by 11% on something, they compromise at 9%. If Democrats want to expand eligibility in some government handout, they will agree to a few less people being eligible.

But Democrats will never compromise on their basic philosophy of government. You will never find them compromising if compromising means giving up part of what they believe. However, compromise is always required of Republicans. Probably because their ideas are so narrow and backward.

Roger Koopman has done good work in documenting this faux compromise. His group, Montana Conservatives, has calculated the percentage of times various state representatives and senators have tended to vote either left or right. Mr. Koopman writes:

"Votes for larger, more powerful, more intrusive and more expensive government are interpreted as 'liberal' or leftist positions. Votes for smaller government, lower taxes, fewer regulations and more individual and economic freedom are interpreted as 'conservative' positions. Other traditional conservative positions include government transparency, competitive free markets, states rights, firearms freedom, civil/constitutional liberties and educational choice."

Based on that, he chronicles 149 votes (71 Senate, 78 House) from the 2011 Montana legislative session which come to bear on the criteria he describes above. From that we are able to discern who actually are the compromisers. Let's start with the generic groups. These groups have cast conservative votes in these percentages:

Senate Average: 27% conservative votes
Senate Republicans: 45%
Senate Democrats: 5%
House Average: 34%
House Republicans: 47%
House Democrats: 6%

We can observe from these numbers that no group, whether Republican or Democrat, votes conservatively most of the time. But note that Republicans vote to the Left almost half the time, whereas Democrats almost never vote to the Right. Our first conclusion is that for all the vociferous complaining the Left does regarding the need for compromise to govern effectively, they are the ones least likely to do so.

So, what about the Chronicle's endorsements?

Franke Wilmer: 5% conservative votes
Kathleen Williams: 6%
Mike Phillips: 4%
JP Pomnichowski: no information

And what about some of the specific republicans the Chronicle mentioned?

Tom Burnett: 64% conservative votes
Gordy Vance: 69%
Kelly Flynn: 60%
Ted Washburn: 30%

It is clear, then, that Republicans are much more the compromisers. And the Democrats the Chronicle endorses, cited specifically because of their willingness to compromise, are nothing more than doctrinaire Leftists.

To God be the glory - Lyrics

1.To God be the glory, great things He hath done,
So loved He the world that He gave us His Son,
Who yielded His life our redemption to win,
And opened the life-gate that all may go in.

Praise the Lord, praise the Lord,
Let the earth hear His voice;
Praise the Lord, praise the Lord,
Let the people rejoice;
Oh, come to the Father, through Jesus the Son,
And give Him the glory; great things He hath done.

2.Oh, perfect redemption, the purchase of blood,
To every believer the promise of God;
The vilest offender who truly believes,
That moment from Jesus a pardon receives.

3.Great things He hath taught us, great things He hath done,
And great our rejoicing through Jesus the Son;
But purer, and higher, and greater will be
Our wonder, our transport when Jesus we see.

Study: free birth control leads to fewer abortions

Reproduced here in full for fair use and discussion purposes. My commentary interspersed in bold.

WASHINGTON (AP) — Free birth control led to dramatically lower rates of abortions and teen births, a large study concluded Thursday, offering strong evidence for how a bitterly contested Obama administration policy could benefit women’s health (Imagine what free food would do to reduce hunger. And free houses to reduce homelessness. And free vacations to reduce stress).

The project tracked more than 9,000 women in St. Louis, many of them poor or uninsured. They were given their choice of a range of contraceptive methods at no cost — from birth control pills to goof-proof options like the IUD or a matchstick-sized implant.

When price wasn’t an issue, women flocked to the most effective contraceptives — the implanted options, which typically cost hundreds of dollars up-front to insert. (when price wasn't an issue, people flocked to Mercedes and BMWs) These women experienced far fewer unintended pregnancies as a result, reported Dr. Jeffrey Peipert of Washington University in St. Louis in a study published Thursday.

The effect on teen pregnancy was striking: There were 6.3 births per 1,000 teenagers in the study. Compare that to a national rate of 34 births per 1,000 teens in 2010 (You mean birth control actually reduces pregnancy? That's amazin'.).

There also were substantially lower rates of abortion, when compared with women in the metro area and nationally: 4.4 to 7.5 abortions per 1,000 women in the study, compared with 13.4 to 17 abortions per 1,000 women overall in the St. Louis region, Peipert calculated. (So you are saying that using contraceptives not only reduces pregnancy, but reduces abortion? Who'da thunk?) That’s lower than the national rate, too, which is almost 20 abortions per 1,000 women.

In fact, if the program were expanded, one abortion could be prevented for every 79 to 137 women given a free contraceptive choice, Peipert’s team reported in the journal Obstetrics & Gynecology.

The findings of the study, which ran from 2008 to 2010, come as millions of U.S. women are beginning to get access to contraception without copays under President Barack Obama’s health care law. (in other words, the results of the two year old study was released now, at a critical juncture, and the AP "news" article provides timely cover for Obama) Women’s health specialists said the research foreshadows that policy’s potential impact.

“As a society, we want to reduce unintended pregnancies and abortion rates. (There is no such thing as what society does and doesn't want. It is not an entity.)  This study has demonstrated that having access to no-cost contraception helps us get to that goal,” said Alina Salganicoff, director of women’s health policy at the Kaiser Family Foundation. (well of course it does. That was the purpose of the study)

The law requires that Food and Drug Administration-approved contraceptives be available for free for women enrolled in most workplace insurance plans, a change that many will see as new plan years begin on Jan. 1.

The policy is among the law’s most contentious provisions because it exempts churches that oppose contraception (actually it doesn't. The original controversy was that it DID require religious organization to provide contraception, but the beneficent Obama relented) but requires religious-affiliated organizations, such as colleges or hospitals, to provide the coverage for their workers. The U.S. Conference of Catholic Bishops and many conservative groups say that violates religious freedom, and Republican presidential nominee Mitt Romney has voiced similar criticism. (This is a textbook example of how the Left manipulates people, and then charges them for their trouble. After all, who could oppose reducing abortions? Make it all free. Sandra Fluke isn't a slut, she's a saint!. Extending the "logic," we must conclude that everything important ought to be free. Which of course, makes it a right. Therefore, anything that is not provided for free to me violates my rights. This basically means that anyone could show up on your metaphorical doorstep, demand your money, and if you refuse, you could go to jail. That's the America we live in, courtesy of the Gimmedat Party...)

The Deficit Scare: Myth vs. Reality - by Douglas J. Amy - analysis

Posted here in its entirety for fair use and discussion purposes. My responses interlaced in bold.

--------------------------------

"Republicans only care about deficits when public money is being spent on liberal programs."

If right-wing deficit hawks get their way, they will eliminate an essential tool for fighting economic recessions and cripple our ability to make the crucial public investments in education, technology, and infrastructure that would lay the groundwork for future economic expansion. (There is no evidence whatsoever that deficit spending shortens or mitigates the severity of recessions. And I personally do hope that the government's ability to invest in education, technology, and infrastructure are crippled. One could easily make the case that federal involvement in education has decimated it. 

Regarding technology, we can look at things the government does not involve itself in, like personal computers, cell phones, and the internet. Those things are getting faster, more efficient, and cheaper. Contrast that with healthcare, for example, which the government has increased its involvement in over the last 20 years. Things are less efficient, more expensive, and less available. 

Regarding infrastructure, we have paid untold billions in highway taxes. And the stimuli, with "shovel ready jobs," remember? Where has all the money gone? Why do we need to invest even more, when obviously what we have already invested has been wasted?)

In recent years, a new and dangerous front has opened up in the conservative war on government: the battle over deficits and debt. The anti-government forces (Notice that "limited government" really means "anti-government." But conservatives are not anarchists.)

have tried to portray their position as merely one of fiscal common sense. They say that it is simply a matter of not spending more money than one earns. But make no mistake: this anti-debt crusade is a highly politicized effort to fundamentally undermine liberal programs and progressive government in this country. (He writes this as if it is a bad thing. But why does he find it noteworthy that the people who oppose leftist initiatives actually want to stop them? That's what opposition is, isn't it?

But in reality, the goal is not necessarily to undermine liberal programs and progressive government. The goal is to return the government to its constitutional boundaries. This may indeed have the effect the author fears, but pursuit of one's agenda necessarily demands the failure of other agendas.)

If the deficit hawks are successful, they will do major damage to society and the economy (The economy has already experienced major damage, mostly due to leftist initiatives. Our present situation is the expected result of activist, interventionist government attempting to direct the economic outcomes.).

They are promoting a deficit hysteria. (Hyperbole.) 

in an effort to force the government to enact deep cuts in vital social programs like Social Security, Medicare, and Medicaid. This fiscal austerity movement (No one has proposed austerity, and there is no austerity "movement." Austerity is a loaded word chosen to attempt to push the conservative position out to the margins. Conservative discussion has largely focused on simply ending profligate government spending and wastefulness.) 

would also prevent the government from using deficit spending to speed the recovery of the economy when it is in recession. (Which government has done with no real effect. It has not sped up the recovery, it has in fact extended it.)

And it would inhibit us from making the crucial public investments in education, technology, energy, and transportation that are necessary to improve society and lay the foundations for future economic growth (the author will repeat these claim multiple times, but never provide evidence that it is true).

The Anti-Deficit Campaign

First, let’s be clear on the terminology. The “deficit” is the yearly difference between the money the government takes in and what it spends, while the “national debt” is the accumulation of the yearly deficits. The debt is funded by the federal government selling Treasury securities like T-bills, notes, Treasury Inflation-Protected securities, and savings bonds to the public.

Since the election of President Obama, the Republicans have been working diligently to whip up public panic (Notice again how he portrays his ideological opponents.) 

about growing deficits and the debt. Conservative commentators like Glenn Beck have been pushing this issue hard in their daily tirades against overspending “socialist” government. These ideologues (Of course, the author is not an ideologue) 

maintain that deficits hurt economic growth and that the national debt is putting an unfair burden on the future generations. The only answer, they argue, is to reduce government, rein in public spending, and to move toward balanced budgets. (This indeed is what conservatives are seeking, thankfully presented without hyperbolic language. The author never actually gets around to negating the benefit of these objectives, however.)

Also leading the charge to alarm the public has been private-equity billionaire Peter G. Peterson. For 25 years he has been warning that the growing national debt would lead the economy into a disastrous collapse – even during the Clinton administration when many economists predicted many coming years of budget surpluses. In recent years he has pledged to spend a billion dollars to convince lawmakers that we must drastically curtail spending and reduce Social Security and Medicare benefits. He has funded a foundation dedicated to this cause, produced a documentary shown on PBS, and created an on-line newspaper, Fiscal Times, to spread his alarmist point of view (This is the first time I've heard of this guy. But he must be really influential, I guess).

Despite the fact that Peterson’s anti-deficit arguments rely on highly questionable predictions and fuzzy math (more on that later), he has been effective in his efforts to woo lawmakers to his cause, even some Democrats. And all these conservative propaganda efforts are having an effect on public opinion, with more Americans saying that deficits are one of the most serious problems facing our country.

Clearly this anti-deficit campaign is part of the larger “starving the beast” strategy that was discussed in another article. But deficits and debt are complicated topics that merit some analysis on their own. This article takes on the “deficit hawks” and critically examines their arguments. It will show that

(1) Republicans only care about deficits when the money is being spent on liberal programs; (Republicans are not synonymous with conservatives. The author continually conflates these two groups, but conservatives have consistently opposed big government and big spending for decades) 
(2) our current large deficits have not been caused by overspending by the Obama administration; (Presidents do not have constitutional authority to spend. Congress does.) 
(3) deficit spending is an essential tool for combating economic recessions and depressions; (This Keynesian perspective, though popular among the left, has never actually worked in real life) 
(4) public debt can fuel vital public investments in education, technology, and infrastructure that lay the groundwork for future economic expansion; (this is the third time he has asserted this. Let's see if he actually makes the case for it.) 
(5) the inflated and misleading right-wing rhetoric about deficits and debt is distracting from a more rational and helpful discussion of the financial problems that we do face as a nation. (Notice the hyperbolic use of the word "rational." The suggestion, of course, is that the author is rational, and to disagree with him is irrational. Typical rhetoric from the Left.) 

Deficit Hypocrites

Before considering what exactly is wrong with the conservative critique of deficits, it is first useful to see just how hypocritical many of them are about this topic. In reality, most conservative politicians don’t care nearly as much about deficits as they claim. Consider the evidence: most Republicans in Congress (once again conflates Republicans with conservatives. Conservatives are very critical of republicans who do not act in conservative ways. In fact, the TEA party turned several of them out of office. So it is error to equate the two.) 

did not become deficit hawks until after President Obama was elected. (This simply false. The deficit and the national debt have been major topics of concern among conservatives for as long as I've been aware of politics, which goes back to the Reagan era. They have long been critical of profligate spending, even during Republican administrations.)

During the previous administration they were busy helping President Bush turn the budget surpluses of the Clinton era into large deficits. (There were no Clinton surpluses. Clinton as president does not have the constitutional authority to appropriate money. There was a decrease in the deficit during that time, and tepid credit goes to the Republican majority elected in 1995.)

Most conservatives did not see this rapid increase in the national debt as a problem at all. (This is factually incorrect. A review of the positions of prominent conservatives like Ann Coulter, Michelle Malkin, Walter E. Williams, Thomas Sowell, Rush Limbaugh, Joseph Farah, Andrew Breitbart, Sean Hannity, Dennis Prager, Michael Massie, John Stossel, Pam Geller, Ron Paul, Matthew Sheffield, Brent Bozell, David Limbaugh, Mark Steyn, John Nolte, Cal Thomas, and Dana Loesch will clearly demonstrate that "deficit hawks" have been consistently anti-deficit no matter who has been in power.) 

Vice-President Cheney blithely dismissed those issues at the time by saying, “Reagan proved deficits don’t matter.” (I researched this quote, which is plastered all over the internet on leftist websites. First, I could not locate the source, so it isn't clear that Cheney really said this. Here's a more complete quote and the cited reference: 

"You know, Paul, Reagan proved deficits don’t matter. We won the midterms (congressional elections). This is our due.” (Source: [X-ref O'Neill] Adam Entous, Reuters, on AOL News Jan 11, 2004)  

A search of AOL and Reuters does not turn up the reference. I'll leave it to the reader to determine if Cheney actually said it. I will say, however, that even if Cheney said it, it is clear that Cheney did not say that deficits are unimportant. In the context of the remark, it is clear that he is referring to the results of the election, i.e., the voters returned Reagan to office despite the deficits, so in the eyes of the voters, the deficits didn't matter as they voted.)

So clearly many Republicans think (Notice he has switched back to Republicans.) 

deficits are just fine when they are spending the public’s money on their own political priorities. It didn’t bother them to fund the wars in Iraq and Afghanistan by massive deficit spending. (This is a clever obfuscation of the situation. BEFORE there was spending on the wars, government was ALREADY engaging in deficit spending. Therefore, any additional spending was also deficit spending. And, it's not intellectually honest to pick out the programs you like and deem them funded, while the programs you don't like are "adding to the deficit.") 

And they were all too glad to add hundreds of billions to the national debt by passing several enormous tax cuts – money that went largely to the wealthy. (There is no evidence that tax cuts add to the national debt. Quite the contrary, tax revenue increased substantially from 2004 to 2008. The deficit in 2008 was $196 billion, lower than the typical Clinton deficits. 

And yes, of course the bulk of tax cuts went to the wealthy. It is the wealthy that pay a disproportionate amount of income tax. You can't cut taxes on those who do not pay them.) 

The Center for Budget and Policy Priorities (a leftist thinktank) 

has estimated that those wars and tax cuts will eventually contribute a whopping $7 trillion to federal deficits by 2019.1 (Only because the equation is defined by leftists as a zero sum game. That is, they assume an increase in tax does not change any other variable, like the behavior of taxpayers. But the equation is dynamic. Increasing taxes by say, 5% does not increase government revenue by 5%. 

People respond to changes in tax by changing their economic and tax strategy. A business owner who plans to hire or purchase equipment may delay the decision. An investor may choose a different investment that either isn't taxed or delays taxation. Also, when the rules change, businesses will often sit on the sidelines until they're sure they can make an economic choice that will not hurt them later. 

But more to the point, the only way that a decrease in taxes can increase the debt by a "whopping $7 trillion" is if government does not adjust its spending habits. In other words, only reckless people continue to spend even though they know the income won't be there.)  

Many Republicans know – or should know – that almost all the projected deficits in the coming years have nothing to do with “out of control and irresponsible spending” by the Obama administration. (as we have noted, presidents do not spend money. Congress has that constitutional authority. Nevertheless, the claim is specious. The national debt has increased by $5 trillion since Obama was elected. There is no other way to interpret it. It is irresponsible to spend money like that when you don't have it.)

Consider, for example, the projected deficit for 2013 of $962 billion. A study has shown that 42% ($402 billion) of that deficit will be due to the Bush-era tax cuts. Costs of the Bush initiated wars in Iraq and Afghanistan will account for 16% ($153 billion). Another 41% ($395 billion) of the deficit will be caused by the economic downturn that began in 2008.2 This last figure includes lost tax revenues, money for the bailout that was necessary to prevent a complete economic meltdown, and money for an economic stimulus package to speed economic recovery (Speedy indeed. Blistering, in fact).

All these factors together will amount to 99% of the deficit in 2013! But this reality is being ignored by Republican politicians who continue to erroneously claim that Democrats and their policies are the main cause of our deficit problems. (I thought the bailout was a net gain? I thought the bailout saved the country? I thought the bailout had a payback that exceeded the amount spent? I thought the bailout was to get the country back on its feet? Are you telling me that the bailout added to the national debt? 

And further, most conservatives do not specifically blame the Democrats, although we shouldn't be surprised that the Republicans do. Conservatives blame congress for wasting untold trillions on big government redistributive programs.)

Further evidence of Republican hypocrisy about deficits can be found in the way they ignore obvious ways of addressing this problem. (Now the deficit is a problem? I thought it was good? A useful tool?)

If they really cared about reducing deficits, they would be enthusiastic about letting the Bush tax cuts expire. This would be the single most immediate and effective way to help rein in deficit spending. (Of course this is false. Spending causes deficits by definition.)

But instead, in 2010 they refused to extend unemployment benefits to millions of Americans until the Democrats agreed to extend all of these tax cuts – thus adding hundreds of billions to the national debt. Apparently, preserving low taxes, especially for the rich, is the real number one priority for Republicans, not cutting the deficits (Notice that the problem in the eyes of the author is a revenue problem. If only the government could get enough tax money there would be no problem. Implicit in this is the idea that government spending should continue and even increase. But increasing taxes has never once reduced the national debt. Spending is, was and always will be the problem).

As their behavior indicates, many Republicans are not in principle against deficits, only deficit spending they don’t agree with.(Probably true about many Republicans. Not true about conservatives.) 

It is only when the Democrats want to spend money on things like making health care more accessible, improving education, or extending unemployment benefits that suddenly deficits matter and we are “broke” and “can’t afford” these “irresponsible” expenditures (Notice how the author picks his examples. This is typical leftist strategy. The leftist isolates the issue in terms of emotional appeal ["It's for the children!] in order to create the perception that budget-cutting impacts crucial services and destroys lives. One might think from this that the only thing government does is fund education and take care of the poor. 

But in a $2.8 trillion dollar budget, there isn't a single thing that can be reduced or eliminated? Every dollar spent is crucial and uncut-able? This is the false choice we are continually presented with. Cutting spending always means hurting or killing people, which makes conservatives evil and greedy. I'm continually surprised at how many people believe that this is true.).

The Real Reasons the Republicans are Pushing Deficit Reduction 

If deficit reduction isn’t a matter of principle for many Republicans, what are the real reasons they are pushing this issue so hard? There are two. First, conservatives (Once again conflating Republicans and conservatives.) 

believe that deficits make a good campaign issue. They need something to rile up people – something to fan their anger and resentment against government (That is, fiscal responsibility is a irrational thing, and apparently people are stupid and easily manipulated. They'll react in anti-intellectual ways because they are so ignorant. Thank goodness we have smart people like the author who can explain to us why it is a good thing to spend money until we can't pay it back. Which, incidently, he has yet to do. Up until now, all we have are his bare assertions.)

– and deficits fit the bill. Unfortunately, it seems to be working. Polls find increasing numbers of Americans are mentioning deficits and the national debt as one the most important problems facing our nation. (Deficits and the national debt ARE critical problems. We are teetering on the brink as a nation. Given the insolvency of SS and Medicare, as well as $16 trillion in debt, substantial adjustments are going to need to be made. The alternative is default.).

However, the main reason the Republicans have seized on this issue is that it is a good way to reduce government or at the very least prevent its expansion. Efforts to rein in the budget have long been a part of their “starving the beast” strategy that was described in another article. (Wait. I thought that deficits only became a problem after Obama became elected. Now we discover that this has long been a part of republican strategy. So which is it?)

That is why Republicans have no interest in one of the obvious ways to approach this problem: raising taxes so government does not have to borrow so much money to pay for necessary programs. (Except this been tried many times and has never worked...)

In their view, there is only one way to addresses deficits: cut spending. (Which has never been tried.) 

Of course this could eventually necessitate cutting back on many of the established liberal programs – like Medicare and Medicaid – that Republicans have never liked. In fact, the Republican budget proposal in 2011 actually called for ending Medicare and Medicaid as we know them. In the end, this renewed conservative (Conflating Republicans with conservatives again.) 

concern about deficits is simply a new way to pursue their real goal – reducing big bad government (I wonder if the author proof-read this statement. Is the author opposed to fixing bad government?).

Deficits Are Good During Recessions

But irrespective of their motivations, aren’t Republicans right that deficit spending is a terrible idea and we must stop doing it? Aren’t balanced budgets just a matter of common sense? The answer is “No.” In fact, a good case can be made that deficit spending is an indispensable government tool in addressing serious economic problems (If a "good case can be made," maybe he finally will attempt to make it. He has yet to do anything at all except make bare assertions.)

For example, most economists agree that deficit spending during a recession, especially a severe one, is a very good thing to do. (That is, most Keynesian economists. They are, unfortunately, quite wrong.) 

Even though tax revenues are decreasing, the best thing for the economy is for the government to keep spending money, and even increase spending. When consumer and corporate spending are swooning, only the government is in the position to spend money and stimulate economic activity. (Except for the inconvenient fact that this has never worked in the history of the nation.)

The market will not take care of this problem, so the government must step in. (Again, we are offered nothing but bare assertions, with no evidence that this has or can work.)

Government spending has a multiplier effect that provides a large economic boost during recessions. (Wait. A few paragraphs ago the author said that the bailouts added to the deficit problem. So which is it?) 

If it spends money on building schools and roads, for example, that money first helps constructions companies. These companies in turn will hire more workers who will then spend more money on goods and services, thus helping other businesses. The construction companies will also purchase more tools and materials from other businesses, who will then hire more workers, and so on. In this way, deficit spending spreads through the economy, lessening the impact of recessions and helping to speed economic recovery. And as the economy rebounds, this produces higher tax revenues, which eventually lessens the need for deficit spending. (Wow, now I am worried. This fellow teaches economics. I am astounded. Ok, let's try to briefly analyze this preposterous assertion. Government gets money two ways: Taxation and borrowing. 

The first way, taxation, means the government takes the money out of the private sector to spend it on its priorities. So every dollar that the private sector does not have is a dollar it cannot spend to pay an employee, purchase capital needs, or invest in facilities. Government now has that dollar, which it in turn redistributes in a different part of the private sector. 

Net gain - zero. 

The other way government gets money is borrowing. The Federal Reserve notifies the Department of Treasury to print money. The Treasury does so, and delivers the newly-printed currency to the Fed for distribution. The Fed purchases government debt instruments (bonds, t-bills, etc.), and uses the money it received to purchase them. So the Fed holds more than 70% of the national debt, purchased with money printed by the Treasury. The increase in money supply devalues the dollar (inflation). therefore, bailout money that was borrowed devalued the existing dollars in circulation. 

Net gain - zero.)

Contrary to the wildly erroneous claims of the political right, most economists agree that the deficit spending and economic stimulus programs of the Obama administration provided enormous benefits. (The author seems to like to repeat his claims over and over without substantiation.) 

A 2010 study by Alan Blinder of Princeton and Mark Zandy of Moody’s Analytics found that the combined effect of the fiscal stimulus package, TARP, and the actions of the Federal Reserve Board raised real GDP 11% over where it would have been, saved an estimated 8 million jobs, and probably averted deflation and a depression. (Anyone willing bet me that these folks are Keynesians? But let's point out the obvious flaw here. It is impossible to know that GDP is 11% higher than where it would of been. We have nothing to compare it to. No placebo. No control group. Indeed, there is no possible way to know if 8 million jobs were saved. No one can count a "job saved." 

I suppose it would be inconvenient to point out that economic downturns historically last 18 - 24 months. The spectacular exceptions are the Great Depression, which lasted all the way through WWII, and the current economic downturn, which is now nearly five years old. Both of these exceptions are characterized by substantial government intervention and deficit spending. A case can easily be made that government has, in both cased, PROLONGED the downturn and IMPEDED the recovery.) 

They concluded: “It is clear that laissez faire was not an option; policymakers had to act. Not responding would have left both the economy and the government’s fiscal situ­ation in far graver condition. We conclude that Ben Bernanke was probably right when he said that ‘We came very close in October [2008] to Depression 2.0.’”3 (Government ALWAYS has to act, according to the Left. Every problem is for government to solve. Leftists love to tell people what to do, what they can eat, what they can drive, what they can say, and what they must believe. They are all about control. That's why they need big government. They need the mechanism to make sure people do what they want them to do. 

This is why conservatives are a threat. Conservatives want to limit and confine the agent by which leftists want to effect societal change. Conservatives think that people are capable of solving their own problems, making their own decisions, and leading their own lives. Leftists are deathly afraid of this, because they don't trust people to do the right thing. They believe people are not smart enough. They believe people need to be led to make the right choices. And powerful, interventionist, coercive government is needed for that.)

The worst thing the federal government could have done was to listen to the deficit hawks and curtailed spending in the face of a severe recession. To see why, you simply need to look at state governments that did this in recent years. As their economies were tanking, many state governments – which are constitutionally required to balance their budgets – had to lay off workers, cut benefits to individuals, and curtail purchases of goods from the private sector. This simply made a bad economic situation worse. (No, most states weathered the storm. Some better than others, but they all still are here and in operation.

But of course, states don't have the kind of fiscal power the feds have. And a lot of what they do is mandated by the feds.)

It created a kind of reverse multiplier effect, taking money and jobs out of the economy and lowering demand for goods and services in an already weak economy. Instead of speeding an economic recovery, this kind of frugal spending policy actually slows it down. It hardly makes sense to kick the economy when it is down, but this is what happens if governments are forced to balance their budgets every year. (Except this is not true. The states in the best budgetary condition are headed by Republican governors and/or legislatures. The states in the worst condition are democratic strongholds. The big difference here, though, is that states can't print money, they can only borrow it. And some states, like California, are so far in debt they may never get out. Several California cities have already declared bankruptcy.)

If the Republicans continue to be successful in blocking further stimulus spending, this will only hurt the economy. At best, it will delay recovery from the recession, and at worst, it might actually precipitate a dip back into more severe recession. (This is a CYA. Conservative economists have been predicting a double-dip downturn since the very beginning. The weak recovery we have experienced is not an indicator of policy success, it is the expected outcome of a profligate government. The second leg of the downturn is an inevitable result of the massive burden of government debt on the economy.

And we need to note that the stimulus was not a one-time thing. The budget didn't go up one year and back down the next. The budget stayed up every year. It never came back down, which means we are still spending hundreds of billions of dollars each year in stimulus-level funding.) 

Either way, this will only add up to more suffering for millions of American workers. Chronic long term unemployment has reached heights not seen since the Great Depression of the 1930s. (Wait. I thought the stimulus has helped. Is the author now admitting that unemployment has not been helped by government recovery programs?)

This is the real crisis facing many Americans. They are out of a job, out of savings, and losing their house. Their American dream is fading fast. Only the government is in the position to help – to stimulate the economy to produce more jobs.(Only government? Sounds like he's talking about Jesus.)

And yet the Republicans keep insisting that budget balancing must be our first priority – thus leaving millions of jobless working class and middle class Americans hung out to dry (which they already are. Is this fellow clueless? All of the spending, all of the government solutions, all of the programs, have brought us to this point. How can the author say that people will be hung out to dry when they already are?).

Bogus Math and Questionable Estimates

Peterson and many other fiscal austerity zealots (Note the inflammatory rhetoric.) 

rely primarily on highly questionable predictions that budget deficits and the debt will soar to unimaginable heights several decades from now. (Well, actually, that is the case now. The national debt just exceeded $16 trillion. I'd say that qualifies as "unimaginable.")

They predict economic doom as interest rates soar and investment grinds to a halt. But as numerous critics have pointed out, predictions that extend out several decades are extremely unreliable and depend entirely on the assumptions one uses. (Which is the same problem that Keynesians have with their projections, of course.) 

For example, slight changes in his assumptions about the rate of economic growth or key tax rates would mean that none of his dire predictions about soaring debt would actually come about.

Robert Kuttner is particularly critical of the misleading calculations in Peterson’s analysis:

The Peterson Foundation’s central claim of over $50 trillion in unfunded liabilities is arrived at by miscounting apples and oranges. The only true figure for debt—that is, debt on which actual interest is paid by taxpayers—is the public debt held by the public, estimated as of January 12, 2009, according to the Treasury, is $7,781,352,915,790.80. ("Public debt" is an artificial distinction. Debt is debt, and debt includes not only what has been borrowed [including by the Fed], but money that is borrowed from the Social Security Trust Fund. The total obligations for which government will be responsible to pay is not $50 trillion, it could be twice that.)

The Treasury Department’s figure for public debt is about 54 percent of GDP, a far smaller portion of GDP than at any time during the quarter-century after World War II, a period of record economic boom. The rest of the Peterson Foundation’s fanciful arithmetic is derived by adding debt that one government agency owes to another (another roughly $4.5 trillion) as well as the projected seventy-five-year deficits for Social Security, Medicare, and Medicaid, using worst-case scenarios.4

Social Security is a good example of just how questionable Peterson’s alarmist analysis really is. There is clearly no immediate crisis and not a likely long-term problem either. The Social Security payroll tax was hiked in the 1980s to handle the increasing number of baby-boomers retiring now. As a result, the program's trust fund is projected to grow steadily, with a surplus lasting until at least 2027. (The SS trust fund contains no cash, only debt.) 

After that, some very small modifications in income or payouts could return the system to surplus. Even if that wasn’t done, the program will still be able to pay 100 percent of benefits until 2041.5

The only way that Peterson can make Social Security look like a problem is if he projects the program out 75 years, and assumes very low rates of economic growth and wage increases. Slightly more optimistic economic assumptions would mean that Social Security would be quite viable for the foreseeable future. So to whip up public panic about the Social Security system, as Peterson and his allies have done, is simply irresponsible. (To claim that Social Security has assets is more than irresponsible, it is false.)

Deficits and Debt can Encourage Economic Growth

Conservatives are also wrong when they argue that deficit spending and a large national debt will inevitably undermine economic growth. To see why, we need to simply look back at times when we have run up large deficits and increased the national debt. The best example is World War II when the national debt soared to 120% of GDP – nearly twice the size of today’s debt. This spending not only got us out of the Great Depression but set the stage for a prolonged period of sustained economic growth in the 50s and 60s. (There is no evidence of this. Government burdened the economy to such a great degree that the length of the Depression can be measured in decades. Only when the war geared down and troops returned home to start lives for themselves did the economy begin to recover.) 

Massive investments were made in science and technology, American workers were re-trained and re-employed, private investment was encouraged, and consumer purchasing power was increased. That 25-year post-war economic boom, with the most rapid increase in living standards in our history, would not have happened without the stimulus of all this deficit spending. (An unsupported assertion.)

History also shows that balancing the budget does not necessarily ensure a spurt of economic growth. In fact, in most periods when we have not had deficits, such as the 1990s, (There were no surpluses. But even so, there is no evidence that balanced budgets cause recessions.) 

this was followed by an economic recession.6 So there is clearly little historical evidence to show that deficits and debt inevitably hurt economic growth. (The author cites one fallacious example and then makes a blanket statement. His conclusion is unscientific and unjustified.)

But what about the conservative argument that public spending “crowds out” private investment, to the detriment of economic growth? They maintain that if the government is borrowing a lot money, that is money that the private sector cannot invest to increase its production and productivity. This has to undermine economic growth, right? The answer is “No, not necessarily.” (The weasel phrase "not necessarily" admits that sometimes it's true.)

As most economists point out, ("Most economists" again, that are Keynesian.) 

government spending also has a “crowding in” effect that actually encourages more private investment. That is because much of the money that the government borrows and spends goes to the private sector. Private industry must then prepare to provide the various goods and services demanded by the government – such as weapons systems, green energy systems, new roads and schools, etc. In order to do this, these businesses must invest in new production facilities and greater productivity. This “crowding in” effect thus helps to mitigate any negative effects that public borrowing has on the private sector by indirectly encouraging more private investment and business growth.(We've already dealt with this bizarre scenario. Government borrows by devaluing the currency. Everyone's dollars are worth less, therefore purchase less. Zero gain.)

Investing in America’s Future

But there is even a more important issue here – one often brought up by Joseph Stiglitz, a Nobel Prize winning economist. He argues that deficit spending, when it is done right, can be a major stimulus to economic growth and actually lower long term government debt.7 When economic growth is back on healthy terms, this leads to increased tax revenues, which eventually lessen the need for government to borrow money. (I thought borrowing money was good? Why does the author suggest that government might want to lessen the need for borrowing?) 

For Stiglitz, the key is to spend that deficit money on things like education, technology, and infrastructure that lay the groundwork for future economic expansion. We will not remain competitive with other countries for long if we don’t have decent roads, efficient airports, adequate clean water supplies, and sufficient school facilities. (Why are these lacking with all the billions and trillions of dollars already spent? Where did the money go? Why isn't government acting prudently by budgeting for and engaging in appropriate maintenance of these valuable things?)

Recently the American Society of Civil Engineers estimated that over the next five years it would take at least $1.6 trillion to bring our national infrastructure into an acceptable state. These are huge investments that the private sector is unwilling to make. Going into debt to pay for these things is a good investment in our collective futures. (On what basis? Because previous assets have been mismanaged so that infrastructure is now failing? And by the way, there is no such thing as "our collective futures." Individuals may indeed have intersecting interests, but there is no collective.)

We also need government to invest in emerging technologies that are vital to our economic prospects. We are falling behind many other countries in our public investments in high-speed rail, modern telecommunications technology, and an advanced electricity grid. (This may be true, but first, we do not need to assume government is the one to do it, and second, it is irrelevant what other countries are doing and how they are doing it, and third, government rarely chooses correctly as far as which technology or which strategy will yield positive results.) 

Another area that will drive economic expansion in the future is green technology and alternative energy. Left to itself, the market has not been leading us in that direction.(Because it makes no economic sense. The market perfectly allocates resources and effort according to what is viable. Green energy is not viable. The green energy market as far as is relates to government is not an economic issue, it is a political issue.)

Several other countries, including China and Germany, have been spending billions in public funds to encourage consumers and industry to jump on the green technology bandwagon, and they are already beginning to reap the economic rewards of this strategy. (Again, who cares what other countries do?) We are trailing badly in this vital economic area and we are unlikely to catch up without substantial investments by our government.

Who Really Cares about Our Children?

One of the most common Republican complaints about deficits is that they will ruin our children’s future. We are saddling them with this enormous debt that they will have to repay – presumably to their great detriment. So if we care about future generations, we must severely cut spending to rein in this increasing debt. “Do if for the kids,” say the deficit hawks.

The main problem with this argument is that it focuses only on the costs of deficit spending for future generations, and completely ignores how that spending would actually benefit them. Would you be a good parent if you considered only the costs of buying braces for your child and not the benefits they would enjoy for the rest of their lives? (Our first real-world example from the author, and a bad one. Parents may or may not borrow money to fix their kids' teeth, but the thing is, they make the decision based on what they can afford and premised on the idea that they will pay back what they borrow. 

Parents make budget decisions based on greatest need vs. available resources every day. Government never does this, because it is spending other peoples' money. There is no thought given to affordability, the money will never be paid back, and the results, if achieved, will most likely be inefficient, filled with waste, fraud and abuse, and have a ripple effect throughout the economy) 

Similarly, we must not just think about the national debt that we are handing down to our children, but consider also all of the valuable assets, projects, and programs that could be financed by that debt. Those benefits could make future generations much better off. (In other words, spend as much as you want "for the children." "Yes, little Johnny, we did this for you. I know that your standard of living will be lower than mine as the economy languishes under the burden of humongous government, but look at all the cool things you have.")

It all depends on what the deficits are spent on. If we are simply going into debt, as we did in the Bush era, to pay for tax cuts for the rich and wars like those in Iraq and Afghanistan, this will do little to help our descendants. (In other words, deficit spending can be categorized into "Good if it went to things I agree with" and "Bad if it went to things I disagree with.") 

But what if some of that deficit spending goes to make higher education more affordable? A study by the National Center for Public Policy and Higher Education gave the public college and university systems in 43 states a grade of “F” for affordability. This means that many kids who do go to college end up saddled with enormous student loans that will detract from their standard of living for years. More importantly, many low and middle-income students simply cannot afford college anymore – hundreds of thousands of kids are being turned away every year for lack of money. In contrast, public investment by many countries in Europe has made higher education there low cost or free. Whose kids are better off? (The author apparently thinks that this is a zero sum game. Spend all we want to give children a garage full of ATVs and motorcycles because it's all free and without consequence. As long as we borrow and don't pay it back, well, no one has to pay the piper. It's a perpetual motion machine, isn't it?)

In addition, we are not doing our offspring any favors if they inherent a country whose infrastructure is in disastrous condition.(Again, why is it in disastrous condition if it is built and maintained and overseen by government? Why is that? And note that it is infrastructure we are passing on to our children, not funding for obscene art, not onerous regulations on business, not an unmanageable tax code, not the loss of freedom as government tells us how big a soft drink we can by or whether or not a restaurant can serve salt. Thank the Lord the government is going to give us infrastructure!) 

They will not enjoy balanced budgets (Here it is again. I though balanced budgets were bad. How can we enjoy a bad thing?) 

if that means living in a world of bad roads, dangerous bridges, failing sewer systems, questionable drinking water, and congested airports. Future generations might also be thankful if we spend some money now on lessening the potentially disastrous impacts of climate change. Global warming is already beginning to do enormous harm with unusually intense droughts and floods. If we do nothing now, the impacts on our children and grandchildren will be much more severe. (It's for the children! We must spend boatloads of money that isn't really there, so that our children can get to their flights on time. Can we ask, why can't we get to our flights on time now? Whose fault is that? We have big, deficit-causing government now, and all these problems? Why?)

Finally, as noted earlier, government spending can be crucial for ensuring a prosperous and growing economy. A large part of the economic growth in the last twenty years has been fueled by various kinds of private sector economic bubbles. This is hardly desirable or sustainable. In the 1990s, there was a large technology bubble that created billions in apparent investment profits. Later, it was the housing bubble which encouraged consumers to borrow and spend much more money because of the rapidly increasing value of their homes. When these bubbles burst, they took the economy down with them. Today, we need a more stable and reliable way of encouraging economic growth. Public investments in emerging technologies, like alternative energy, could prove to be a valuable part of that economic strategy. If we can leave our children a sustainable growing economy, this could be their greatest inheritance. (Wait. We have hundreds of government agencies, and all sort of financial regulation, much of which was installed after the Great Depression. How could these things be problems with all the government intervention and oversight? I thought government already solved the problem? 

Oh, and regarding the housing bubble. The bubble did not cause anything. The bubble is a RESULT of government intervention. The Fed lowered interest rates to near zero, government legislation was implemented to encourage home ownership, banking regulations changed to force banks to make loans they otherwise would not make, etc.. 

There would have been no bubble had in not been the government intervening in the markets.)

Our Real Financial Concerns

All of this is not to say that there are not some serious financial concerns looming on the horizon. But they are all solvable. The challenge is to do so in a way that does not shred our social safety net or prevent us from engaging in the kind of public investment that we so crucially need.

The main problems we face are with Medicare and Medicaid. Without any reforms, Medicare will go into deficit by 2020, and benefits will have to be reduced. This is due to the fact that that health care costs in this country are already high and rising even further. Why are costs so high? Because we have one of the most inefficient health care systems in the world. We pay almost twice as much per person for health care compared to many other advanced countries, and we often provide worse care (and a lower life expectancy). The main culprit is the commercial domination of our health care system. (No, if there was commercial domination of our healthcare system, the free market would be in operation, competition would thrive, and costs would be coming down. We didn't have a problem 20 or 30 years ago. Health insurance was cheap and covered a lot. 

Only after government began mandating coverages, limiting access, expanding government health programs which caused cost shifting, and manipulating the doctor-patient relationship did we see the beginnings of a crisis. Government caused the problem.) 

We rely primarily on private, for profit, insurance companies and healthcare companies. Many other countries have more streamlined, government-run, single-payer systems that provide high quality care at much lower costs.

In the long run, then, solving the financial problems of Medicare and Medicaid require some basic reforms in our health care system. As Dean Baker, one of the most thoughtful economists analyzing government debt has explained it, the best way to address our debt is to “fix health care, fix health care, fix health care.” (How is our debt in any way caused by healthcare, unless government is involved in its procurement and funding? A moment ago the author told us that the problem was because of private insurance companies. But if the system was made up of only private insurance companies, there would be no impact on government. 

So, it is clear now that government is heavily involved in healthcare and sways the market according to its dictates. Indeed, before obamacare the government was already spending $.47 out of every healthcare dollar. It is obvious that government is the 600 pound gorilla in healthcare, so the private sector can hardly be blamed for the problems.)

The health care reforms passed in 2010 have some promise to slow down growing costs. But the health care system remains the hostage of the private, profit-making, health care industry. Many analysts believe that additional major reforms must take place if we are truly to rein in rising medical costs. The crucial importance of doing so was made clear in a report by Our Fiscal Security, which concluded: “The rapidly rising cost of private health care—doctor’s visits, prescription drugs, procedures—is the only truly unsustainable part of the long-term budget. If U.S. health care costs were growing at the rate of other wealthy countries, we would have no long-term debt problem.”8

A Crucial Part of the Solution: Raising Government Revenue

Baker and other progressive economists have also been promoting another approach to long-term debt reduction: raising more revenue. (Now he wants to reduce the debt again. I wish he would make up his mind.)

For example, Robert Kuttner has proposed a series of tax changes that could bring in an addition $800 billion a year into the federal coffers.9 These include:

A tax on Wall Street financial transactions. This would have the added benefit of discouraging short term speculative trading and encouraging more stable longer term investments.
Crack down on off-shore tax havens. Estimated to bring in at least $100 billion a year.
End the deferral on foreign source dividend income. Obama promised to close this loophole, which also would discourage shifting jobs overseas.
Eliminate deductibility of interest payments on corporate mergers. Should bring in at least $50 billion a year and discourage abusive takeover attempts.
Raise taxes on short term capital gains. These gains should be treated as ordinary income, as they were before the Reagan era.

None of these additional revenue sources would have much of an effect on 90% of Americans. (Nor would they raise anywhere close to the amount of money needed to close the deficit. But of course it is worth noting that every dollar of tax is paid by private citizens. Corporate taxes are built into the price of products and services as a part of overhead expenses. Raising taxes will trickle down to the end user.) 

More importantly, they would enable us to stabilize and perhaps even expand our crucial safety net programs and also to pay for vital public investment projects, such as alternative energy and infrastructure improvements.

Other analysts have argued that much of the needed money for social programs and public investments could easily come out of the defense budget. If one considers how much countries spend on defense, the U.S. heads that list by a very wide margin. In fact, we spend more money on defense than the next nineteen countries on that list combined. Our navy alone has the capability of the next eight countries navies combined – many of which are our allies.(Ahh, so he does want to cut government. I thought that was a bad idea. You know, government spending stimulates the economy. Remember?

When you defend the world and involve yourself in questionable foreign wars, you spend a lot of money. Other countries do not spend a lot of money on defense because they have no need. They know the US will jump to their defense.)

So there is a lot of room to downsize without undermining our security. A bipartisan group, the Project on Defense Alternatives, has done an analysis that found we could cut a trillion dollars out the defense budget in the next ten years without compromising our military superiority.10 That kind of money would go a long ways toward solving our fiscal problems. (Except it won't. I actually support a smaller military, but the national debt is projected to increase by $7 trillion over the next four years. The military is only 19% of the budget. Eliminating it completely still doesn't solve the problem. The problem is, and remains, spending.)

The Real Battle

In the end, the political battle over deficits and the national debt is really just a proxy for the more basic ideological struggle over the proper role of government in a modern society. (true) 

The Republicans want to use fear-mongering (Another emotionally-loaded word. It sure is easy to make one's case by marginalizing the opposition with an epithet.)  

over these alleged financial problems to advance their political vision of the minimal state. They promise Americans a future of balanced budgets, reduced spending, and lower taxes. But what they don’t tell us is that this would also be a future in which most people would be on their own to try to deal with serious economic, social, medical, and environmental problems that face our country. (Because if government doesn't take care of you, no one will.)

The jobless would be left to fend for themselves during serious recessions. Basic safety net programs like Social Security and Medicare would be cut back and/or privatized, and scores of other unmet human needs would be neglected due to lack of sufficient taxes and public funds. (In other words, take the money from you so that the government spends it more wisely than you can.)

It would be a world where infrastructure would continue to crumble ( I ask again, why is it crumbling? Why is government neglecting these valuable things? Especially considering how much it takes in the form of highway and gas taxes. Where is the money going?) 

and we could not afford to make the necessary investments in education and growth-producing technologies.

Of course there is another possible scenario: a much more positive one in which we all worked together through government to address our common problems. It would be a future in which active government used all of the tools at its disposal – including taxation and deficit spending – to improve the lives and security of average Americans. Where the government would step in vigorously to reduce the impact of recessions and to promote job creation. Where the government would make the necessary investments to shore up vital safety net programs, and to update and improve our educational and infrastructure systems. In this scenario, we would also have a society that was made more sustainable and livable by public spending to encourage alternative energy and other green technologies. (God, how many times has the author made this same point? Repeating an assertion over and over does not establish its veracity.)

But it is exactly this future that will be denied us if we fall prey to the deficit hysteria being manufactured by the anti-government (Anti-government? Only anarchists are anti-government. Conservatives are not anarchists.) forces in this country.



1. Kathy Ruffing and James Horney, “Critics Still Wrong on What’s Driving Deficits in Coming Years,” June 28, 2010, Center for Budget and Policy Priorities. http://www.cbpp.org/cms/index.cfm?fa=view&id=3036

2. Kathy Ruffing and James Horney, “Economic Downturn and Bush Policies Continue to Drive Projected Deficits,” May 10, 2011, Center for Budget and Policy Priorities. http://www.cbpp.org/cms/index.cfm?fa=view&id=3490

3. Alan Blinder and Mark Zandy, “How the Great Recession was Brought to an End,” July 27, 2010. http://www.economy.com/mark-zandi/documents/End-of-Great-Recession.pdf

4. Robert Kuttner, “Progressive Revenue as the Alternative to Caps, Commissions, and Cuts,” February 25, 2010. http://www.scholarsstrategynetwork.org/pdfs/Progressive_Revenue_as_the_Alternative-Robert_Kuttner.pdf

5. David Knox, “Social Security More Solvent that Most American Realize,” August 24, 2008

http://www.ohio.com/news/american_dream/27325314.html

6. Ezra Klein, “Galbraith: The Danger Posed by the Deficit is Zero,” May 12, 2010, “http://voices.washingtonpost.com/ezra-klein/2010/05/galbraith_the_danger_posed_by.html

7. Joseph Stiglitz, “The Dangers of Deficit Reductions.” March 5, 2010. http://www.sfbg.com/bruce/2010/03/05/stiglitz-dangers-deficit-reduction

8.Our Fiscal Security, “The Budget Deficit and Debt: What You Need to Know,” September 2010, http://www.ourfiscalsecurity.org/deficit-101

9. Robert Kuttner, “Progressive Revenue as the Alternative to Caps, Commissions, and Cuts,” February 25, 2010. http://www.scholarsstrategynetwork.org/pdfs/Progressive_Revenue_as_the_Alternative-Robert_Kuttner.pdf

10. Project on Defense Alternatives, “Debt, Deficits, and Defense: A Way Forward,” June 11, 2010, http://www.comw.org/pda/

The Deficit Scare: Myth vs. Reality: Douglas J. Amy

You'll find my analysis here.

Posted here in its entirety for fair use and discussion purposes.

--------------------------------

The Deficit Scare: Myth vs. Reality 

"Republicans only care about deficits when public money is being spent on liberal programs."

If right-wing deficit hawks get their way, they will eliminate an essential tool for fighting economic recessions and cripple our ability to make the crucial public investments in education, technology, and infrastructure that would lay the groundwork for future economic expansion.

In recent years, a new and dangerous front has opened up in the conservative war on government: the battle over deficits and debt. The anti-government forces have tried to portray their position as merely one of fiscal common sense. They say that it is simply a matter of not spending more money than one earns. But make no mistake: this anti-debt crusade is a highly politicized effort to fundamentally undermine liberal programs and progressive government in this country.

If the deficit hawks are successful, they will do major damage to society and the economy. They are promoting a deficit hysteria in an effort to force the government to enact deep cuts in vital social programs like Social Security, Medicare, and Medicaid. This fiscal austerity movement would also prevent the government from using deficit spending to speed the recovery of the economy when it is in recession. And it would inhibit us from making the crucial public investments in education, technology, energy, and transportation that are necessary to improve society and lay the foundations for future economic growth.

The Anti-Deficit Campaign

First, let’s be clear on the terminology. The “deficit” is the yearly difference between the money the government takes in and what it spends, while the “national debt” is the accumulation of the yearly deficits. The debt is funded by the federal government selling Treasury securities like T-bills, notes, Treasury Inflation-Protected securities, and savings bonds to the public.

Since the election of President Obama, the Republicans have been working diligently to whip up public panic about growing deficits and the debt. Conservative commentators like Glenn Beck have been pushing this issue hard in their daily tirades against overspending “socialist” government. These ideologues maintain that deficits hurt economic growth and that the national debt is putting an unfair burden on the future generations. The only answer, they argue, is to reduce government, rein in public spending, and to move toward balanced budgets.

Also leading the charge to alarm the public has been private-equity billionaire Peter G. Peterson. For 25 years he has been warning that the growing national debt would lead the economy into a disastrous collapse – even during the Clinton administration when many economists predicted many coming years of budget surpluses. In recent years he has pledged to spend a billion dollars to convince lawmakers that we must drastically curtail spending and reduce Social Security and Medicare benefits. He has funded a foundation dedicated to this cause, produced a documentary shown on PBS, and created an on-line newspaper, Fiscal Times, to spread his alarmist point of view.

Despite the fact that Peterson’s anti-deficit arguments rely on highly questionable predictions and fuzzy math (more on that later), he has been effective in his efforts to woo lawmakers to his cause, even some Democrats. And all these conservative propaganda efforts are having an effect on public opinion, with more Americans saying that deficits are one of the most serious problems facing our country.

Clearly this anti-deficit campaign is part of the larger “starving the beast” strategy that was discussed in another article. But deficits and debt are complicated topics that merit some analysis on their own. This article takes on the “deficit hawks” and critically examines their arguments. It will show that (1) Republicans only care about deficits when the money is being spent on liberal programs; (2) our current large deficits have not been caused by overspending by the Obama administration; (3) deficit spending is an essential tool for combating economic recessions and depressions; (4) public debt can fuel vital public investments in education, technology, and infrastructure that lay the groundwork for future economic expansion; (5) the inflated and misleading right-wing rhetoric about deficits and debt is distracting from a more rational and helpful discussion of the financial problems that we do face as a nation.

Deficit Hypocrites

Before considering what exactly is wrong with the conservative critique of deficits, it is first useful to see just how hypocritical many of them are about this topic. In reality, most conservative politicians don’t care nearly as much about deficits as they claim. Consider the evidence: most Republicans in Congress did not become deficit hawks until after President Obama was elected. During the previous administration they were busy helping President Bush turn the budget surpluses of the Clinton era into large deficits. Most conservatives did not see this rapid increase in the national debt as a problem at all. Vice-President Cheney blithely dismissed those issues at the time by saying, “Reagan proved deficits don’t matter.”

So clearly many Republicans think deficits are just fine when they are spending the public’s money on their own political priorities. It didn’t bother them to fund the wars in Iraq and Afghanistan by massive deficit spending. And they were all too glad to add hundreds of billions to the national debt by passing several enormous tax cuts – money that went largely to the wealthy. The Center for Budget and Policy Priorities has estimated that those wars and tax cuts will eventually contribute a whopping $7 trillion to federal deficits by 2019.1

Many Republicans know – or should know – that almost all the projected deficits in the coming years have nothing to do with “out of control and irresponsible spending” by the Obama administration. Consider, for example, the projected deficit for 2013 of $962 billion. A study has shown that 42% ($402 billion) of that deficit will be due to the Bush-era tax cuts. Costs of the Bush initiated wars in Iraq and Afghanistan will account for 16% ($153 billion). Another 41% ($395 billion) of the deficit will be caused by the economic downturn that began in 2008.2 This last figure includes lost tax revenues, money for the bailout that was necessary to prevent a complete economic meltdown, and money for an economic stimulus package to speed economic recovery. All these factors together will amount to 99% of the deficit in 2013! But this reality is being ignored by Republican politicians who continue to erroneously claim that Democrats and their policies are the main cause of our deficit problems.

Further evidence of Republican hypocrisy about deficits can be found in the way they ignore obvious ways of addressing this problem. If they really cared about reducing deficits, they would be enthusiastic about letting the Bush tax cuts expire. This would be the single most immediate and effective way to help rein in deficit spending. But instead, in 2010 they refused to extend unemployment benefits to millions of Americans until the Democrats agreed to extend all of these tax cuts – thus adding hundreds of billions to the national debt. Apparently, preserving low taxes, especially for the rich, is the real number one priority for Republicans, not cutting the deficits.

As their behavior indicates, many Republicans are not in principle against deficits, only deficit spending they don’t agree with. It is only when the Democrats want to spend money on things like making health care more accessible, improving education, or extending unemployment benefits that suddenly deficits matter and we are “broke” and “can’t afford” these “irresponsible” expenditures.

The Real Reasons the Republicans are Pushing Deficit Reduction 

If deficit reduction isn’t a matter of principle for many Republicans, what are the real reasons they are pushing this issue so hard? There are two. First, conservatives believe that deficits make a good campaign issue. They need something to rile up people – something to fan their anger and resentment against government – and deficits fit the bill. Unfortunately, it seems to be working. Polls find increasing numbers of Americans are mentioning deficits and the national debt as one the most important problems facing our nation.

However, the main reason the Republicans have seized on this issue is that it is a good way to reduce government or at the very least prevent its expansion. Efforts to rein in the budget have long been a part of their “starving the beast” strategy that was described in another article. That is why Republicans have no interest in one of the obvious ways to approach this problem: raising taxes so government does not have to borrow so much money to pay for necessary programs. In their view, there is only one way to addresses deficits: cut spending. Of course this could eventually necessitate cutting back on many of the established liberal programs – like Medicare and Medicaid – that Republicans have never liked. In fact, the Republican budget proposal in 2011 actually called for ending Medicare and Medicaid as we know them. In the end, this renewed conservative concern about deficits is simply a new way to pursue their real goal – reducing big bad government.

Deficits Are Good During Recessions

But irrespective of their motivations, aren’t Republicans right that deficit spending is a terrible idea and we must stop doing it? Aren’t balanced budgets just a matter of common sense? The answer is “No.” In fact, a good case can be made that deficit spending is an indispensable government tool in addressing serious economic problems.

For example, most economists agree that deficit spending during a recession, especially a severe one, is a very good thing to do. Even though tax revenues are decreasing, the best thing for the economy is for the government to keep spending money, and even increase spending. When consumer and corporate spending are swooning, only the government is in the position to spend money and stimulate economic activity. The market will not take care of this problem, so the government must step in.

Government spending has a multiplier effect that provides a large economic boost during recessions. If it spends money on building schools and roads, for example, that money first helps constructions companies. These companies in turn will hire more workers who will then spend more money on goods and services, thus helping other businesses. The construction companies will also purchase more tools and materials from other businesses, who will then hire more workers, and so on. In this way, deficit spending spreads through the economy, lessening the impact of recessions and helping to speed economic recovery. And as the economy rebounds, this produces higher tax revenues, which eventually lessens the need for deficit spending.

Contrary to the wildly erroneous claims of the political right, most economists agree that the deficit spending and economic stimulus programs of the Obama administration provided enormous benefits. A 2010 study by Alan Blinder of Princeton and Mark Zandy of Moody’s Analytics found that the combined effect of the fiscal stimulus package, TARP, and the actions of the Federal Reserve Board raised real GDP 11% over where it would have been, saved an estimated 8 million jobs, and probably averted deflation and a depression. They concluded: “It is clear that laissez faire was not an option; policymakers had to act. Not responding would have left both the economy and the government’s fiscal situ­ation in far graver condition. We conclude that Ben Bernanke was probably right when he said that ‘We came very close in October [2008] to Depression 2.0.’”3

The worst thing the federal government could have done was to listen to the deficit hawks and curtailed spending in the face of a severe recession. To see why, you simply need to look at state governments that did this in recent years. As their economies were tanking, many state governments – which are constitutionally required to balance their budgets – had to lay off workers, cut benefits to individuals, and curtail purchases of goods from the private sector. This simply made a bad economic situation worse. It created a kind of reverse multiplier effect, taking money and jobs out of the economy and lowering demand for goods and services in an already weak economy. Instead of speeding an economic recovery, this kind of frugal spending policy actually slows it down. It hardly makes sense to kick the economy when it is down, but this is what happens if governments are forced to balance their budgets every year.

If the Republicans continue to be successful in blocking further stimulus spending, this will only hurt the economy. At best, it will delay recovery from the recession, and at worst, it might actually precipitate a dip back into more severe recession. Either way, this will only add up to more suffering for millions of American workers. Chronic long term unemployment has reached heights not seen since the Great Depression of the 1930s. This is the real crisis facing many Americans. They are out of a job, out of savings, and losing their house. Their American dream is fading fast. Only the government is in the position to help – to stimulate the economy to produce more jobs. And yet the Republicans keep insisting that budget balancing must be our first priority – thus leaving millions of jobless working class and middle class Americans hung out to dry.

Bogus Math and Questionable Estimates

Dr. Conservative - I do not like this Uncle Sam...

Dan Lourie tries to refute Peter Arnone - letters to the editor

Peter Arnone wrote this, and Dan Lourie responds below. My comments are interspersed in bold.
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Arnone: Truly, the Democrat Party has been hijacked. Led by Barack Obama, we witnessed its Progressive/Marxist leadership and ideological bent in no uncertain terms at the recent DNC. All the “God bless America’s” couldn’t hide its loathing of traditional American values. The greatest con on earth? How else can one describe the convention? Rank and file members are clueless.

Spelled out in the Democrats’ most un-American platform ever, the “God” debacle will hopefully wake up the party faithful to the national catastrophe Obama’s godless administration is taking us. If ever vigilance and activism were called for, it is now. Never in our history has an adversary posed a greater threat. Never has our freedom faced the clear and present danger Obama poses. Historically, we have been a nation of unmistakable trust in God. For Obama and his dictatorial collaborators, “the government is the only thing we all belong to.” Sustaining and expanding their power and control is priority #1.

Cuban-American Sen. Marco Rubio nailed the Democrat agenda at the RNC: “These are tired and old big government ideas that have failed every time and everywhere they have been tried. These are ideas that people come to America to get away from.”

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Lourie: We assume that satirist Peter Arnone, a recurrent Chronicle buffoon, rants to entertain, given the absurdity of his fabricated claims, pathetically and transparently untrue (Ok, remember the standard Mr. Lourie sets for Mr. Arnone. Mr. Lourie is accusing Mr. Arnone of "fabricated claims, pathetically and transparently untrue." This means the burden upon Mr. Lourie is to identify and refute those fabricated claims. Let's see how he does.).

Or he simply lies, his delusional rhetoric failing to hide his candidate Mitt Romney’s incompetence (Mr. Lourie's first point is a tangent, unrelated to the matter at hand. Mr. Arnone did not mention Romney, let alone identify Romney as his candidate.),

his flip flopping, his dismissal of 47 percent of Americans as moochers (Another rabbit trail, again, unrelated to the matter at hand. But since we are here, let us be reminded that Romney did no such thing. Romney's remarks were regarding campaign strategy. He was discussing that people who pay no income tax are not going to be swayed by his campaign strategy of tax cuts. This seems simple and insightful. Also, the fact that Romney's statistic was accurate is rather inconvenient.).

During my participation in the Democratic convention, I heard no outrageous Arnone fantasies of “Marxist ideological bent,” “loathing of ... American values,” a “godless administration.” (Mr. Lourie's experience at the convention is a subset of everything that happened there. Since he could not know everything that happened, his particular experiences are incomplete, and for that matter, anecdotal. 

Further, since Mr. Lourie is politically Left, as a matter of course he would not admit - or perhaps, would not recognize - anything of a nature described by Mr. Arnone. Therefore, Mr. Arnone is not lying about anything. The worst he could be is mistaken about his opinion. This is a far cry from engaging in fabricated claims.)  

For that mendacity (i.e., lie), Arnone relinquishes any credibility (so we are left with the question, what lie did Mr. Arnone tell which causes him to relinquish his credibility?).

I did hear the recounting of a successful president keeping his promise to change our great nation back to its iconic morality, a nation caring for its less fortunate, guaranteeing equality for all citizens, using its resources wisely to ensure a safer, healthier, better educated, more economically viable future for all Americans (I'm sure he heard all of that. He probably ate it up. But none of it is relevant to the accusation. His experiences, as we have noted, are not comprehensive, they are off topic, and certainly, these assertions are a matter of debate themselves.).

President Obama ended the war in Iraq (Again irrelevant, but for the sake of argument, let us note that President Obama adhered to the Bush schedule. Let us also note that troops are still dying there and in Afghanistan, Gitmo is still open, and the President is still lobbing unmanned missile drones into the middle east, killing many),

saved the auto industry (Both GM and Chrysler declared bankruptcy after receiving bailout money),

worked to expand health care access to all Americans (Recent news shows that 6 million people will pay the no insurance penalty),

and began our ascent from the Republican legacy of recession with a recovery program already creating nearly three million jobs (Hmm, I thought it was 4 million. After first losing 7 million. And the recovery is noteworthy due to its anemia.).

It’s an extraordinary record of achievement for a first term (True. No other president has presided over such economic devastation, with no end in sight.),

despite the intransigence (Defintion: "Refusing to moderate a position, especially an extreme position; uncompromising...." This is an odd accusation, since that is what political parties do. We can only conclude that because Mr. Lourie defines compromise as going along with the unimpeachable positions of Obama and the democrats. Mr. Lourie makes an a priori assumption that democratic policies are correct, and as a result republican opposition must be intrinsically mistaken, evil, obstructionist, etc.) 

of Republicans sworn to destroy his presidency (it's somehow surprising to Mr. Lourie that the opposition party is actually opposing Obama? Really? Of course they want to stop him. The country is teetering on the brink, and someone needs to oppose him.).

I am proud of my president’s record (which of course he is free to do. Just as those who disagree with Obama are free to oppose).

(So, Mr. Lourie hyperbolically accuses Mr. Arnone of grievous prevarication but fails to identify a single one. Considering the severe, hyperbolic language Mr. Lourie employs, one would think that Mr. Arnone is a borderline ax murderer. But as we discovered, Mr. Arnone simply expressed his opinion, which of course may or may not be correct, and for that sin Mr. Lourie deems him worthy of crucifixion. 

But more to the point, I wonder if the reader has noticed a trend in the writers quoted here and elsewhere on my blog. To even the casual reader it would appear that Leftists like Mr. Lourie have difficulty with the logical progression of ideas, and even more difficulty in staying on topic and addressing the matter raised. It is this undercurrent of irrationality which is so difficult to respond to, since it comes in torrents and is pervasive whenever a Leftist enters the discussion. 

I am at loss to explain this phenomena.) 

Letter to the editor by Sherrill Dolezilek - analysis

This letter appeared in a recent Bozeman Chronicle. My analysis interspersed in bold:

“I know some believe that government should take from some to give to others. I think that’s an entirely foreign concept.” A quote from Mitt Romney. Wow! What America does Mr. Romney live in? I live in an America that takes money from some (most of us) and sends it as relief money for horrible devastation done by nature-Tsunamis, earthquakes, floods. (I believe that this is the issue, the forced compassion coerced by government. This may be the author's America, but that is the point. America should not force people to part with their money so that others benefit.) My America sends Doctors Without Borders to many countries, teachers as volunteers in countries to build school systems, engineers who give time and effort to help struggling countries. (Doctors without Borders is a charity, which means that donations are voluntary. Neither government nor the charity forces you to part with your money to support this organization)

Mr. Romney’s church, by his own words, requires tithing (Romney's participation in his church is voluntary. He belongs to the church knowing its policies. If he decides he doesn't like those policies, he is free to opt out, unlike government) — which takes money from some and uses it for the charitable activities this church does for its members and the communities in which they are based. (No, it does not take money. People donate money, by their own choice, in order to benefit causes they agree with. Government, however, offers no choice on the transaction, nor any choice regarding the beneficiaries) Does that make it a foreign institution? People in Bozeman give to Family Promise, the Food Bank, the Community Café — all of this is money from the some to “the others.” (Precisely. People give. It is not taken.) When most of us send money overseas, it isn’t for investment, it’s for charitable and healing purposes. (Again, our choice, no one elses') If we go back to the former economic policies, the “others” will be left out of the America that Romney wants to build.

(You can plainly see the author is confusing two concepts, charitable giving and government redistribution. They are not the same. Americans are generous people, apart from what government does. They do so largely because of Judeo-Christian morality. However, government is inserting itself into the transaction, interrupting and usurping the chain of compassion. Government removes choice, which negates the concept of compassion completely and substitutes coercion.)