The budget battles

[awm]

I'm not quite as pessimistic as hrothgar seems to be. Our government is usually pretty good at doing nothing. It seems quite possible that in two years when the Bush tax cuts expire, the two sides will be unable to come to a compromise and the whole thing will end up expiring (probably both sides trying to blame each other in the press). If the entire Bush tax cuts expire, we are well on our way to a balanced budget! One of the big issues in late 2010 was that Obama really seemed to want the middle-class part of the tax cuts extended and was willing to compromise in order to get that. However, after 2012 Obama will no longer be up for re-election and the economy will hopefully be in better shape, both of which make the middle-class tax cuts seem less important.

 

It is true that pretty much every other country in the world does a better job of controlling health care costs than the USA. Hopefully when the Affordable Care Act (aka Obamacare) really gets up and running it will help some in this regard. There are several states currently trying to experiment with single payer (notably Vermont and California). This is basically how single payer got started in Canada (one province adopted it, and it spread) so maybe it will catch on in the US too.

 

We need to address our bloated military budget too, and while Winston's 95% cut seems highly unlikely, there is some acceptance from Republicans that cuts to the pentagon should be part of deficit reduction. Obama's new secretary of defense (Leon Panetta) is apparently a big budget-cutter and may find some savings in the military budget.

[cherdano]

We need to address our bloated military budget too, and while Winston's 95% cut seems highly unlikely, there is some acceptance from Republicans that cuts to the pentagon should be part of deficit reduction.

I'll believe it when I see the vote. The last round of budget cuts included an increase in spending for the military.

[kenberg]

It's desirable to have broad support for positions so let me just say a word about my own reactions.

 

If someone says "We have some serious problems with the delivery of medical care. The costs are spiraling upward and everyday people are not able to cope" my reaction is along the lines of "Let's see what we can do and what it will cost". If instead someone says "I have a right to medical care, I will give you my list of what I want and tell you how much money you should send me to support this right that I have" my reaction is not as positive, not by a long shot.

 

Generally I think that phrasing things in terms of rights is a mistake, both philosophically and tactically. To use an analogy Winston might appreciate, it's too much like "It's in the Bible so you have to do it". My health care is fine but I recognize a need both for the country and the less fortunate. I'm up for supporting reasonable solutions. Suggesting that economics is irrelevant because health care is simply a right will get my back up, and I think needlessly so.

[Winstonm]

I'll believe it when I see the vote. The last round of budget cuts included an increase in spending for the military.

 

In the Bizarro World of the Beltway, a decrease in the increase is called saving money.

 

My wife uses this same reasoning with sale items at the grocery story. "I saved $12. They were 2 for 1."

 

"But we don't have a dog."

 

"Oh, yeah. I stopped by the kennel on the way home..."

[kenberg]

Just be thankful that the kennel was not having a 2 for the price of 1 sale. Although I suppose you could call them Bill and Hillary.

[y66]

I don't think there's any hard science on this but I'm pretty sure the anecdotal evidence suggests that people who own dogs have fewer health problems. Not sure about cats. I've got one of each, just in case.

[Winstonm]

I don't think there's any hard science on this but I'm pretty sure the anecdotal evidence suggests that people who own dogs have fewer health problems. Not sure about cats. I've got one of each, just in case.

 

One of each? You mean two anecdotes? What do you feed an anecdote? Me? I've got a dachsund - one of neither.

[helene_t]

I don't think there's any hard science on this but I'm pretty sure the anecdotal evidence suggests that people who own dogs have fewer health problems. Not sure about cats. I've got one of each, just in case.

Plenty of studies in the scientific literature but most are based on too small sample sizes to yield firm conclusions. This one seems ok:

http://www.springerlink.com/content/m8g7286044411447/

[hrothgar]

I don't think there's any hard science on this but I'm pretty sure the anecdotal evidence suggests that people who own dogs have fewer health problems. Not sure about cats. I've got one of each, just in case.

 

Methinks you may have made a costly assumption about casuality...

 

Let's assume that there is some kind of strong causal link between "Health" and "Owns a Dog"

 

One possible interpretation of this result is "The act of buying a dog will improve my health".

However, it would be equally valid to hypothesize: "It takes a lot of time and effort to care for a dog, therefore sickly people are rarely dog owners."

 

And of course, there is always the possibility of some hidden variable (like rats!)

[kenberg]

Dogs expect to be walked.

Walking is good for people.

Therefore....

 

Yes, we can take a daily walk without owning a dog. We don't. QED

[helene_t]

However, it would be equally valid to hypothesize: "It takes a lot of time and effort to care for a dog, therefore sickly people are rarely dog owners."

Well, serious scientists try to take that into account when doing statistical modelling and developing sampling strategies. Some have made serious efforts to identify causal links.

 

I concede that it is no-where near bullet-proof since you can't make controlled experiments (like randomizing the trial patients into two groups, one of which get real pets while the other gets placebo pets).

 

But I think the biggest problem is simply lack of data. Which is surprising since the data should be easy to get.

[awm]

Placebo pets!

 

Perhaps we should start a company with this name that sells stuffed animals.

 

There is substantial scientific evidence that placebo is essentially a cure-all. In experiment after experiment, patients who are given a placebo (sugar pill) fare better than patients who are given no medication. Apparently this is phenomenon is highly statistically significant, and may apply even if the patients are told they are being given a placebo (although possibly they do not know what that means in any case). Possibly we could improve US health care outcomes by providing placebos to patients, but in that case some company would obtain exclusive rights and jack up the price of placebo to a few hundred dollars a dose.

[kenberg]

I think that my insurance will only cover the cost of generic placebos.

[luke warm]

I think that my insurance will only cover the cost of generic placebos.

 

lol... placebos have no generics, they're a tier 4 fake drug, meaning the copay would be higher

[Winstonm]

Placebo pets!

 

Perhaps we should start a company with this name that sells stuffed animals.

 

There is substantial scientific evidence that placebo is essentially a cure-all. In experiment after experiment, patients who are given a placebo (sugar pill) fare better than patients who are given no medication. Apparently this is phenomenon is highly statistically significant, and may apply even if the patients are told they are being given a placebo (although possibly they do not know what that means in any case). Possibly we could improve US health care outcomes by providing placebos to patients, but in that case some company would obtain exclusive rights and jack up the price of placebo to a few hundred dollars a dose.

 

Although there is common belief (even among professionals) that a placebo effect is real, researchers studying the effect have found no convincing evidence - in fact, what they have found is mostly poorly-designed studies and biased reporting.

http://www.sciencebasedmedicine.org/?p=4304

(emphasis added)

Existing evidence strongly suggests that placebo effects are mostly comprised of bias in reporting and observation and non-specific effects. There is no measurable physiological benefit from placebo interventions for any objective outcome. There is a measured benefit for some subjective outcomes (mostly pain, nausea, asthma, and phobias), but the wide variation in effect size suggests this is due to trial design (and therefore bias) rather than a real effect.

 

At the same time, there is overwhelming evidence of one thing: that we, as humans, have an inordinate amount of enthusiasm for belief in magic and magical solutions.

[y66]

It's funny how effective a calm, reassuring voice from a trusted source can be when you're freaking out semi-needlessly as we are now over the budget.

 

We should have cloned Walter Cronkite.

[y66]

ATB ... from Krugman

 

These days Americans get constant lectures about the need to reduce the budget deficit. That focus in itself represents distorted priorities, since our immediate concern should be job creation. But suppose we restrict ourselves to talking about the deficit, and ask: What happened to the budget surplus the federal government had in 2000?

 

 

The answer is, three main things. First, there were the Bush tax cuts, which added roughly $2 trillion to the national debt over the last decade. Second, there were the wars in Iraq and Afghanistan, which added an additional $1.1 trillion or so. And third was the Great Recession, which led both to a collapse in revenue and to a sharp rise in spending on unemployment insurance and other safety-net programs.

 

So who was responsible for these budget busters?

 

 

President George W. Bush cut taxes in the service of his party’s ideology, not in response to a groundswell of popular demand — and the bulk of the cuts went to a small, affluent minority.

 

Similarly, Mr. Bush chose to invade Iraq because that was something he and his advisers wanted to do, not because Americans were clamoring for war against a regime that had nothing to do with 9/11. In fact, it took a highly deceptive sales campaign to get Americans to support the invasion, and even so, voters were never as solidly behind the war as America’s political and pundit elite.

 

Finally, the Great Recession was brought on by a runaway financial sector, empowered by reckless deregulation. And who was responsible for that deregulation? Powerful people in Washington with close ties to the financial industry, that’s who. Let me give a particular shout-out to Alan Greenspan, who played a crucial role both in financial deregulation and in the passage of the Bush tax cuts — and who is now, of course, among those hectoring us about the deficit.

 

So it was the bad judgment of the elite, not the greediness of the common man, that caused America’s deficit.

 

Does any of this matter? Why should we be concerned about the effort to shift the blame for bad policies onto the general public?

 

 

One answer is simple accountability. People who advocated budget-busting policies during the Bush years shouldn’t be allowed to pass themselves off as deficit hawks; people who praised Ireland as a role model shouldn’t be giving lectures on responsible government.

 

But the larger answer, I’d argue, is that by making up stories about our current predicament that absolve the people who put us here there, we cut off any chance to learn from the crisis. We need to place the blame where it belongs, to chasten our policy elites. Otherwise, they’ll do even more damage in the years ahead.

 

[PassedOut]

ATB ... from Krugman

Yes, that's what happened, and it's been disastrous.

 

But neither the general public nor the democrats are off the hook. The US reelected Bush in 2004 even though everyone with common sense then understood that both the tax cuts and the Iraq war were monumental blunders. And many democrats in congress had voted for those very blunders.

 

Now Obama pushes to let those irresponsible tax cuts expire -- but only for those in the higher brackets.

[blackshoe]

Tax cuts don't add to debt. Deficit spending adds to debt.

 

As for the rest, this Krugman is clearly not an unbiased observer. He's not entirely wrong, but he's not exactly right, either.

[kenberg]

Krugman's second paragraph:

Well, what I’ve been hearing with growing frequency from members of the policy elite — self-appointed wise men, officials, and pundits in good standing — is the claim that it’s mostly the public’s fault. The idea is that we got into this mess because voters wanted something for nothing, and weak-minded politicians catered to the electorate’s foolishness.

[/Quote]

 

This can be an all-purpose explanation for many issues, used by conservative and by liberals It's quite wrong, I think. People who set policy should be expected to understand the likely consequences of the policy. Watching a plan crash and then announcing that the policy was fine, it's just that the people didn't behave properly, is really to announce that you haven't a clue about what you are doing. The liberal side of our republic is repeatedly stunned to find that parents are not willing to let their kids get bussed to crummy schools where they are unwelcome. People are just so unpredictable. The conservatives are amazed that if there is lax regulation then savvy folks make a fortune and leave the mess for the rest of us to clean up. Who wouldda thought?

 

A little realism from all quarters would be very welcome. As I see the current economic scene, a Democrat is someone who wants to raise someone else's taxes, not his own, and a Republican is someone who wants to cur someone else's benefits or subsidy, not his own.

[y66]

Which of Krugman's 3 arguments for assigning the blame to zombie elites is not right?

[PassedOut]

Tax cuts don't add to debt. Deficit spending adds to debt.

Tax cuts add to debt whenever they are not matched by spending cuts. US citizens who oppose letting those irresponsible tax cuts expire now are themselves irresponsible free lunchers.

 

When and if the spending cuts occur (I'm not holding my breath), the taxes can come down accordingly. Those who argue the contrary advocate stealing from future generations to avoid taking personal responsibility now. They disgust me.

[blackshoe]

Perhaps the idea behind the tax cuts was to induce the spendthrifts to stop spending. Granted it didn't work, that doesn't mean it isn't the spending that's the problem.

 

You will no doubt argue that spending cuts should come first. I don't think it matters which comes first. What matters is that they both happen — and they haven't because there are too many spendthrifts in the halls of power.

[hrothgar]

Perhaps the idea behind the tax cuts was to induce the spendthrifts to stop spending. Granted it didn't work, that doesn't mean it isn't the spending that's the problem.

 

According to Stockman - who should know - the purpose of the Reagan tax cuts was to drive the country into insolvency to help dismantle the New Deal...

 

It's VERY clear that budget deficits are a deliberate design goal for the right...

(Regardless of what gets spun to the great unwashed)

[kenberg]

Perhaps the idea behind the tax cuts was to induce the spendthrifts to stop spending. Granted it didn't work, that doesn't mean it isn't the spending that's the problem.

[/Quote]

 

Only if the proponent of this idea is totally divorced from reality. I doubt that it was the idea, but if it was then of course it didn't work. They were thinking that a farmer would say "Since the government has cut taxes I'll call my lobbyist and tell him I no longer want subsidies"? Or that the Congressman would tell the lobbyist "I no longer can accept your campaign contribution since I have to vote to stop subsidizing your client?" This was the plan? Someone might like to pretend that this was the plan, but it wasn't. Or if it was, we are governed by thoroughly naive people.

 

I understand why rich people want to have low taxes for the rich. I don't approve, but I understand. I have more trouble understanding how they get people with more modest incomes to support this idea.