Facts Make the Tea Party Veer to the Political Left on Spending?

This isn't new, but I just came across it.

In fact, a sophisticated poll covering 31 budget items as well as revenue sources conducted around the 2010 elections found that, even then, Republican, Democratic and independent voters all agreed on much higher taxes and much deeper defense cuts as the most striking elements of how the budget should be crafted....

...[S]upport for government spending has varied somewhat cyclically since the[ 1964 election], but only within a relatively narrow range, as recorded by the gold standard of public opinion research, the General Social Survey [data archives here].

The GSS asks about more than two dozen specific problems or program areas, asking if the amount we’re spending is “too little,” “too much” or “about right.” Not only do most Americans think we’re spending too little in almost every area — most conservatives also think the same. Indeed — hold onto your hats — even most conservative Republicans feel that way as well....

The researchers also found broad agreement across party lines. Their first report noted, “Among a total of 31 areas, on average Republicans, Democrats and independents agreed on 22 areas — that is, all three groups agreed on whether to cut, increase or maintain funding. In 9 other areas there was dissensus.” That’s not to say there weren’t differences. Republicans cut much less from defense — $55.6 billion for core defense (versus $109.4 billion) — and much less overall — $100.7 billion (versus $146 billion) — than Americans as a whole. But even so, the position of Republican respondents overall was still dramatically to the left of the political conservation in Washington....

[Tea Party members were] more conservative than Republicans overall, but they still come across as wild-eyed socialists compared to their D.C. representatives:

Those who described themselves as “very sympathetic” to the Tea Party (14% of the full sample), as would be expected, raised taxes and revenues less than Republicans in general, and less than Democrats and independents. Even so, on average, Tea Party sympathizers found a quite substantial $188.2 billion in additional revenues to reduce the deficit ($105.2 billion in individual income taxes).

This sort of information makes it more understandable why the Republicans have proved to be such poor fiscal stewards when they hold power. They demagogue about taxation and spending, but prioritize budget increases in areas such as military spending and revenue reduction via tax policy that favors the wealthy and corporations. When it comes to actual budget cuts, they can read the polls as well as anybody else. In specific regard to Medicare and Social Security,

Combining GSS data from 2000 to 2012, and asking about Social Security and spending on “improving and protecting the nation’s health” (GSS’s closest match with Medicare), liberal Democrats thought we were spending “too little” rather than “too much” on one or both by a margin of 87.1 percent to 2.4 percent — a ratio of over 36-to-1. But all other groups of Americans held the same view, even conservative Republicans — just not by the same overwhelming amount. They “only” thought we were spending “too little” rather than “too much” by a margin of 59.2 percent to 13.1 percent — a ratio of 4.5-to-1. With figures like that — all well to the left of Democrats in D.C. — it’s no wonder that conservatives in Congress always talk about “saving” Social Security and Medicare, and forever try to get Democrats to take the lead in proposing actual cuts.

The Republicans are not willing to lose the next election by savaging domestic spending in a manner necessary to even make up for their spending increases and tax cuts, let alone make cuts dramatic enough to put the budget into balance or to create a surplus and spend down the debt. Instead, when they take power, we get Dick Cheney-type comments that "deficits don't matter". Instead, if you want a balanced budget, they offer the worst of both worlds -- tax policies that reduce revenue and spending policies that increase the overall budget, resulting in a significant increase in the nation's debt.

Paul Ryan's Buget Appeal to the April Fools

I see Paul Ryan picked an approropriate day to release his (and by "his" I mean something created by others then handed to him as the pitchman) plan to balance the budget in ten years.

Ryan's budget, called the "Path to Prosperity," has almost no chance of passing the Democratic-controlled Senate but is expected to serve as a campaign manifesto for Republicans in November's congressional elections.

It's a predictably Republican plan. The rich get their path to greater riches, and guess who picks up the tab? April fools!

It proposes to kill President Barack Obama's 2010 healthcare reforms and revives cuts in social programs such as the popular Medicare entitlement for the elderly that Ryan, who chairs the House Budget Committee, has proposed in other recent budgets.

Let me think for a moment... didn't we have a Republican claim that he was going to balance the budget in ten years, roughly fourteen or so years ago? How did that work out for us, again?

Let me remind you why ten year plans to balance the budgets are the refuge of liars and cowards:

1. Congress cannot bind future sessions of Congress. The only budget that matters is the one they pass this year.
   
   If you believe that the Republicans, given the opportunity, won't embrace deficit spending like kids in a candy store, you've missed the entire modern history of the party.

2. Unexpected events happen.
   
   If you have been asleep for the past decade or two, you may have missed a couple of wars, a global economic meltdown, and the like, but believe it or not they affect the budget.

3. Budget projections rely upon assumptions that may be reasonable in the short-term, but are unreliable in the longer term.
   
   A few years ago, for example, healthcare inflation was assumed to remain out-of-control for decades to come, yet suddenly it appears to be in check. (Ryan's response, of course, is to propose eliminating the Obama-era legislation that has played a role in that change).

4. Budget deficits aren't the real issue. The issue is whether government spending is responsible, not whether the budget is balanced every year.
   
   When the economy is in a downward spiral, it makes sense to try to stimulate growth. When the economy is booming, it makes sense not just to balance the budget but to pay down the national debt. The Republican Party takes the opposite approach, with irresponsible tax cuts and over-the-top spending during boom times, then embracing austerity during recessionary periods... if a Democrat is in the White House. The responsible approach is to keep the growth of the nation's debt under control over the long-term while maintaining flexibility for times of recession and crisis.

5. "Ten years" means no one has to be responsible.
   
   This is a typical coward's refuge. Promise to deliver something over such a long time frame that nobody has to take responsibility. If a "ten year plan" were to pass for the coming fiscal year, not only will President Obama be out of office when it comes time to deliver, but his successor will be out of office (or at the very tail end of his term). And I guarantee that his successor would have many excuses for why the plan failed, and how it's somebody else's fault, assuming anybody even remembers it.

And all of that assumes that the budget is put together with honest numbers. When dishonest politicians use distorted figures, the projection is worthless from day one.

If this weren't another childish stunt for the April fools, Ryan would offer a meaningful budget for the coming fiscal year, no hocus pocus, wishful thinking, or outright mendacity about "ten years from now". And he would be honest, "I want to cut social benefits for ordinary, working people right now, so that I can afford to continue the tax levels and spending programs that best serve the special interests that favor my political party. If my budget plan fails, the result will be that ordinary people pay a significant price, but those special interests remain on the Path to Prosperity. I will never vote to restore a penny of social spending cut in the name of this program, even if not one of the projections I'm making prove true, because the entire point of this exercise is to cut those programs."

Fools, Frauds and the Budget Deficit

It's probably not worth paying attention to Robert Samuelson on the budget deficit as he has little to no regard for consistency between his columns, and either has little to no interest in how government spending works or has little to know interest in presenting an honest argument. Nonetheless....

Samuelson is in a tizzy because the 2013 budget deficit is projected to be $642 billion, down from an earlier projection of $845 billion and well below "2012’s deficit of $1.1 trillion". Samuelson imagines that the government has now been overtaken by Dick "deficits don't matter" Cheney-types, and that the government is going to now stop focusing on deficit reduction and budgeting. Samuelson, it would seem, isn't spending much time following events in Washington. He's also continuing his mantra of, "We need to cut 'entitlement spending' so we can afford unlimited war spending", but has little to no regard for whether today's budget policies depress the economy and thus slow economic growth for years and decades to come.

You would think that Samuelson would look at the numbers and think, "We didn't anticipate a 24% drop in the deficit until almost half-way through the year, we're really bad at these projections." Even if you assume he hasn't looked at how projections of healthcare inflation have been incorrect. Or has forgotten his history, such as Alan "the genius" Greenspan fretting that if we didn't cut taxes for the rich, we would pay down the national debt too quickly. Funny, I don't recall the Robert Samuelson of that era criticizing Greenspan, "We can't pay down the nation's debt quickly enough." Did I miss something?) Samuelson then carries on for a while about stimulus spending, conflating any deficit spending with stimulus spending. Seriously?

The funny thing is, I'm prepared to agree with Samuelson. Our nation should have a responsible discussion of deficits and debt, albeit preferably with a significantly stronger factual context than one finds in a typical Samuelson column. We should be discussing priorities and, rather than engaging in demagoguery or attempting to gut Medicare without telling the public what we're doing, attempt to set actual priorities.

It seems to me that people like Samuelson don't like that idea, though, because the nation's priorities may turn out to be different from their own. Let's recall Samuelson's own words when his own priorities for government spending might end up on the chopping block:

But I am certain -- now as then -- that budget consequences should occupy a minor spot in our debates. It's not that the costs are unimportant; it's simply that they're overshadowed by other considerations that are so much more important. We can pay for whatever's necessary.

If a $2 trillion war of choice isn't even worthy of discussion, then the size of any particular budget deficit is even less worthy of discussion. What should matter are future costs and revenues, and the accuracy of our projections. By the same token that Samuelson can shrug,

Nothing of consequence has changed. A few numbers have shifted slightly. That’s all. They moved in a favorable direction. Next time, they might go the other way.

he should be prepared to concede that his emphasis of "We need to cut Social Security and Medicare this second or we'll face catastrophe in a quarter century" is misguided. After all, if being off by roughly 25% within a single year represents an inconsequential shift in the numbers that should be shrugged off, how can you justify setting policy based upon one or two percentage points of projected over twenty-five, fifty, or one hundred years?

Given the reality that our projections tend to be flawed - the future is full of surprises - and the present Congress cannot dictate spending priorities for future sessions of Congress, the proper focus for any given session of Congress is their actual, current, spending. By that measure, the present projections are good news, and the focus needs to be less on "what might happen twenty years from now" and more, "That's a good start, now let's talk about next year". In terms of long-term spending and spending priorities, we should be having the discussion that Samuelson seems intent on avoiding - if we can't afford everything, what do we cut first?

Ruth Marcus, Susceptible to Self-Satire

Ruth Marcus appears amused that some of her peers can't recognize obvious satire,

The item was too delicious to resist: New York Times columnist Paul Krugman, he of the don’t-worry, be-happy approach to the federal deficit, had been forced to declare personal bankruptcy.

Except it wasn’t true. The tidbit was satire, from a Web site called the Daily Currant. The Currant’s “tell” was obvious to anyone who took introductory economics: Krugman, it said, had attempted, like a good Keynesian, to “spend his way out of debt,” after “racking up $84,000 in a single month . . . in pursuit of rare Portuguese wines and 19th-century English cloth” — a wink-wink reference to the classic examples of comparative advantage in international trade.

The piece would be stronger, of course, if it didn't open with Marcus caricaturing Krugman's views, or even if it were clear that Marcus knew what she was doing. It would have taken even the more credulous of her peers mere seconds, minutes at most, to determine the source of the Krugman satire, or that Krugman had not declared bankruptcy. So what's Marcus's excuse for not knowing the views of an economist who has been anything but a wallflower on these issues?

Here's Krugman on debt:

Now, the fact that federal debt isn’t at all like a mortgage on America’s future doesn’t mean that the debt is harmless. Taxes must be levied to pay the interest, and you don’t have to be a right-wing ideologue to concede that taxes impose some cost on the economy, if nothing else by causing a diversion of resources away from productive activities into tax avoidance and evasion. But these costs are a lot less dramatic than the analogy with an overindebted family might suggest....

So yes, debt matters. But right now, other things matter more. We need more, not less, government spending to get us out of our unemployment trap. And the wrongheaded, ill-informed obsession with debt is standing in the way.

And more recently:

Bear in mind that the budget doesn’t have to be balanced to put us on a fiscally sustainable path; all we need is a deficit small enough that debt grows more slowly than the economy. To take the classic example, America never did pay off the debt from World War II — in fact, our debt doubled in the 30 years that followed the war. But debt as a percentage of G.D.P. fell by three-quarters over the same period....

So we do not, repeat do not, face any kind of deficit crisis either now or for years to come.

There are, of course, longer-term fiscal issues: rising health costs and an aging population will put the budget under growing pressure over the course of the 2020s. But I have yet to see any coherent explanation of why these longer-run concerns should determine budget policy right now. And as I said, given the needs of the economy, the deficit is currently too small.

In simple terms, Krugman is explaining that deficits matter, but that if they're at a sustainable level they're not a threat to the economy, and that the time to worry about balancing the budget is when the economy is booming in part so that you can avoid self-destructive austerity measures and afford sufficient stimulus spending when the economy is faltering. It doesn't seem that hard to understand... unless, as it seems, you're a Beltway pundit or a Republican partisan.

Do you remember who actually took the position that "deficits don't matter"? A guy whose administration used the Clinton surplus as an excuse to slash taxes for the rich, ran up huge deficits during a period of economic recovery, and crashed the economy on its way out of town. Did Marcus ever so much as whisper a word of criticism? If so, I missed it.

But, oh, something seems familiar about Marcus's quip. "Don't-worry, be-happy." Oh, right, the time Marcus humiliated herself by trying to take on Krugman in public. (Do I give her and her peers too much credit by assuming she's been introduced to at least one take-down of that piece? Mark Thoma: "Ruth Marcus Tries to Show Her Beltway Badge of Seriousness"; Brad Delong piles on. Krugman commented primarily to point out that Marcus didn't understand the statement that she had used as the centerpiece of her attack.)

I really think it's time for Marcus to do the tiny bit of work that she recognizes would have saved her colleagues from embarrassment, and take the few seconds to read what Paul Krugman is actually saying about the economy and deficits, even if it's more fun to believe the satire.

"How Are You Going to Pay for This?"

Once the current "debt ceiling" pseudo-crisis has passed, assuming he is not able to achieve a resolution that takes the debt ceiling out of the picture indefinitely, why wouldn't the President be able to ask, in response to any new spending or budget, "How are you going to pay for this?" If the answer is "spending cuts", the President can ask that they be included in the bill. If there is no answer, the President can reply, "Then as part of this bill you need to either find a way to pay for your spending, or you need to increase the debt ceiling to cover the debt that the nation will incur as a result of this spending."

The Republicans could attempt some blackmail or brinksmanship, "We absolutely refuse to fund this bill, that is essential to our national defense", but I'm not seeing how they would be helped by taking such a position. If the President agrees that the matter is so essential that the spending must be approved despite its creating a debt ceiling issue, the President can make a clear statement about what's happening (call it "public shaming") and the Republicans will should pretty foolish if they later refuse to increase the debt ceiling to pay for the spending they deemed essential.

Jennifer Rubin's 'Best' Isn't Good Enough

In what some might see as an attempt to defy a popular definition of insanity, I saw a link to Jennifer Rubin's comment, "How to Win the Debt Ceiling Fight" and decided to see if she actually had something useful to say.

Republicans are struggling to devise a formula that simultaneously holds the president’s feet to the fire and yet escapes the charge that the GOP is playing Russian roulette with the country’s credit rating. As a practical matter I simply don’t think Republicans have the fortitude to hit the debt ceiling. To avoid the inevitable march-up-the-hill-down-the-hill routine there are two strategies (probably more) readily available.

That is to say, without actually explaining what a victory would look like, Rubin perceives two potential "winning strategies" for the Republicans. The first?

First, following the lead of Sen. Pat Toomey (R-Pa.) in 2011, Republicans could pass legislation explicitly prohibiting default on our obligations and spelling out a sequence for paying our bills so that we don’t default on bond holders, stop Social Security checks or stiff the troops. However, this still might require shutting down other parts of the government, which the GOP has shown no stomach to do.

Should somebody point out to Ms. Rubin that if she admits, at the outset, that the Republicans have "no stomach" to implement her first idea, there's no point in pretending it's serious? Note, Rubin's objection is that the Republicans have no follow-through. She ignores the logistical issues: if she knows of a way the House of Representatives can "pass legislation" that becomes law despite being rejected by the Senate and President, I would love to hear about it....

At the heart of Leahy's proposal is, I suspect, a recognition of how much power Congress delegates to the President when it forces a government shut-down. The idea would presumably be to structure the shut-down to damage Democratic interests while protecting Republican interests over a period of months while the government is unable to pay its bills. The problem thus goes well beyond "stomach", and into the territory of naked partisanship. The Republican Party would have to show its hand - to let the public know exactly what the price would be for its brinksmanship, and how much worse things would get over the ensuing weeks and months until default became inevitable. And... then what?

When the blackmail is explicit, the President will be able to point directly at the blackmail - "They say that if I don't agree to budget cuts that they won't identify, they're going to keep me from paying your Social Security retirement benefits>". What would be the Republican response to that? Would they develop the "stomach" to identify the cuts that they want? Rubin doesn't think so. So the President's response can be, "You control the purse strings - pass a bill enumerating the cuts you want in order to get us out of this catastrophe you've created," and the Republicans have to choose between looking like (malicious) fools, identifying the cuts, or folding. Even Rubin can see the folly of that approach.

What's Rubin's other idea?

The other approach, the smartest I have seen so far, comes from Keith Hennessey, who explains that Republican leaders begin by “assuring [the president] that we will not allow the government to default on its obligations. The debt limit will be increased. The questions we must resolve are first, whether we will simultaneously cut government spending and second, who will cast the votes for the debt increase.” The Democrats then have a choice: either agree to significant entitlement reform in conjunction with a debt increase to get Obama through at least 2014 or the House Republicans will ”deliver 50 Republican votes for a three-month clean extension.

Basically, the Republicans will say, "We're up against the debt ceiling and we want you to make cuts." The President will reply, "What cuts would you like to make?" The Republicans will once again come up with nothing (as Rubin says, "no stomach"). The President will reply, "If you don't want to cut the budget, then you are going to need to approve the spending you've already authorized." The Republicans will then pass a debt ceiling increase approving that spending.

That is the smartest Republican strategy Rubin has seen? She provide's Hennessey's rationale,

[T]his strategy would tell the President, “Hey, if you want your terrible policy, you’re going to have to deliver House Democratic votes for it. Good luck with that.” Either the President accepts and Republicans pound on the “Democratic debt limit increase” message every three months, or he agrees to cut spending. Either way, default risk is eliminated. Republicans will look responsible because they will be acting responsibly, and the markets couldn’t care less about which Members take political heat for casting these unpopular votes.

So every three months the Republicans will say, "Cut spending or we'll raise the debt ceiling," the President will reply, "If you're going to raise the debt ceiling anyway... but, okay, I'll humor you, what cuts do you want me to consider?" The Republicans will reply, as usual, with "We got nothing." Then the public will get mad at the Democrats because the debt ceiling goes up? And it's "lather, rinse, repeat every three months for the next four years"?

Wow.

Not content to simply look foolish, Rubin has to embellish Hennessey's proposal with some terrible advice for her party:

I would add that under no circumstances should the negotiations (if the president chooses to entertain real entitlement reform) be in secret and/or between Republican leaders and the president. It’s time for regular business, with all lawmakers forced to cast votes. Shifting the focus away from the White House is hugely important in avoiding a (losing ) PR battle with the president and might actually deliver results.

Except this Republican grandstanding only works when they pretend it's the Republican Congress against an all-powerful President. If you reduce the role of the President, you make it obvious that Congress controls the proverbial purse strings - that the debt ceiling sideshow is irrelevant, and that the fundamental problem is that the Republicans in Congress keep authorizing the spending that necessitates government debt. You allow the President to point to the public, bipartisan negotiations and say, "When they come up with solutions, I'll be happy to review their budget reform bill, but for now they are running up the bills and it's my job to pay them." And then, per Rubin's proposal, the Republicans will raise the debt ceiling without condition. It's as if she wants her party to appear toothless.

A final word of advice: The Republicans should turn the president’s favorite class warfare game against him. He is the one defending Warren Buffett’s right to receive Social Security and free ride on Medicare; Republicans want to force rich people to pay more and get less so middle- and lower-income people have their benefits. Republicans may shy away from such arguments but unless the GOP captures the “fairness” argument and becomes the champion of the little guy, it will keep losing support and forever be outfoxed by the White House.

I am not sure that Rubin is going to convince more than a tiny handful of dimwitted people that somebody who pays FICA at the maximum rate for most of his career, and continues to do so well past retirement age, is getting a "free ride". If it needs to be explained, if you pay for insurance you are entitled to receive the coverage that you have paid for, even if you're rich - and Buffett, at age 82, is still paying into the system. Further, despite Rubin's eagerness to engage in what her party decries as "class warfare", even if you disqualify the top 1% from eligibility for Social Security and Medicare you will not materially affect the balance sheet.

Rubin apparently hopes that this form of Republican class warfare will confuse people. "We could cut Medicare spending by 1% if the richest 1% of the population were declared ineligible for Medicare. We, the Republican Party, don't think that's fair and to show that we stand for 'the little guy' we propose cutting everybody's Social Security and Medicare benefits."

Rubin's good at pouring out the snake oil, but if she wants people to actually buy it the trick is to confuse people into thinking they're getting something other than snake oil.

George "Grandpa Simpson" Will Wants a Balanced Budget Amendment

Mind you, he doesn't actually try to make a case for a balanced budget amendment, but he does display a fascinating disconnect between his political views and the facts. First up, an angry rant about how the Democrats did not raise taxes enough:

Liberals could have had a revenue increase of $3.7 trillion over 10 years. Instead, they surrendered nearly $3.1 trillion of that. They cannot have repeated bites at this apple.... And because tax reform is dead for the foreseeable future, so are hopes for a revenue surge produced by vigorous economic growth....

By rescuing almost everyone from the restoration of Clinton-era rates, liberals abandoned any pretense of paying for their program of ever- expanding entitlements. Instead, they made trillion-dollar deficits their program.

Were Will interested in facts, he might note that the Republican Party opposed the tax increases that the Democrats proposed, which is to say that if Will is going to complain that Congress hasn't raised enough taxes on enough people he's directing his temper tantrum at the wrong party. As for the conceit that we might have had some sort of larger discussion of "tax reform" but now we can't, due to a modest tax increase on the wealthy, perhaps he can direct us to where that negotiation was occurring - or where we can find anything approximating a serious Republican "tax reform" proposal - and explain why the odds of progress on these confabulated tax reform negotiations and proposals are less likely to bear fruit today than they were two weeks ago.

Because 82 percent of American earners pay more in payroll taxes than income taxes, no politically conceivable or economically feasible middle-class tax rate can fund the entitlement state.

So... because we fund Social Security retirement, SSDI and Medicare through FICA, the fact that pretty much every working person pays FICA taxes.... Um, non sequitur, much? When programs are funded through dedicated taxes, one might think that the proper approach to addressing funding issues would be to examine the dedicated taxes, not go off on a rant about how other taxes should be higher.

People who choose to live in places vulnerable to flooding believe it would be unfair that the cost of their property insurance fully reflect this risk. So government subsidizes their insurance, and hence their decision to live where there is increased risk of property damage that, when it happens, the government helps pay to rebuild.

Stop me if you've heard this one before: What do you call a wealthy person who carries government subsidized flood insurance on his waterfront mansion, one of several homes he owns, and then after a hurricane sues his insurance company because despite the subsidy he chose not to carry adequate subsidized flood insurance to replace his home and contends that the damage was caused by the wind? No peeking.

Will also carries on about one of his pet fixations, Amtrak, complaining that it loses money on food service. Alrighty....

Absent from Will's rant is any argument that a balanced budget amendment would be good policy for the nation, how it might be structured, or even whether his party would support it. If Will had a bit more perspective, he should realize that his own rant effectively answered that question - When they are in control, Republicans are the party of "Deficits don't matter". They're the party that implemented the temporary tax cuts that Will apparently wishes would have expired in toto, and they are the party that prevented the expiration from reaching a slightly larger number of taxpayers.

David Brooks and the Missing Link

A few days ago, I suggested that when David Brooks fails to link to something that he is referencing and is easily available online, he's probably hiding something. Here we go again:

Spending on domestic programs — for education, science, infrastructure and poverty relief — has already faced the squeeze and will take a huge hit in the years ahead. President Obama excoriated Paul Ryan for offering a budget that would cut spending on domestic programs from its historical norm of 3 or 4 percent of G.D.P. all the way back to 1.8 percent. But the Obama budget is the Ryan budget. According to the Office of Management and Budget, Obama will cut domestic discretionary spending back to 1.8 percent of G.D.P. in six years.

No link to that 1.8 percent figure? You'll find it here, on page 30, with the explanation,

Discretionary spending levels other than overseas contingency operations reflect the budget authority caps under the Budget Control Act of 2011. The split of discretionary spending between security and nonsecurity after 2013 is based on increasing budget authority in each category by the growth rate in the aggregate discretionary cap.

Perhaps Brooks somehow missed it, but right now neither party is keen on implementing the automatic tax cuts that are scheduled to occur under the deficit reduction sequestration provisions of that Act.

Brooks also describes CBO projections,

The current budget calls for a steep but possibly appropriate decline in defense spending, from 4.3 percent of G.D.P. to 3 percent, according to the Congressional Budget Office.

The 3% number apparently comes from here, page 74, for the year 2022:

Most discretionary appropriations for 2013 through 2021 are constrained by the caps and automatic enforcement procedures put in place by the Budget Control Act; for 2022, CBO assumed that such appropriations would equal the 2021 amount grown at the rate of inflation. Given those appropriations, discretionary spending would decline from 8.4 percent of GDP in 2012—which is already below the 2011 level of 9.0 percent—to 5.6 percent in 2022 (see Table 5-1).

In reciting the 3% figure as "possibly appropriate", Brooks is expressing some level of indifference to a cut to that level. His professed fear is that "defense planners are notoriously bad at estimating how fast postwar military cuts actually come", whereas his ability to project future Medicare cost increases verges on perfection (never mind that he appears to be unaware that Medicare spending growth has been lower than projected for the past three years) - and thus at some point in the future the military budget might be cut below the 3% (that results from the sequester, and that both parties appear intent on raising) in the CBO projection. Also, there's an inherent tension between arguing that the 3% figure is "possibly appropriate" and Brooks' overall thesis that the President's purpose in appointing Chuck Hagel is to have him "supervise the beginning of America’s military decline".

First it's the OMB, then the CBO, and then over to the GAO. David Brooks writes,

Keep in mind how brutal the budget pressure is going to be. According to the Government Accountability Office, if we act on entitlements today, we will still have to cut federal spending by 32 percent and raise taxes by 46 percent over the next 75 years to meet current obligations. If we postpone action for another decade, then we have to cut all non-interest federal spending by 37 percent and raise all taxes by 54 percent.

The GAO writes,

One measure of the challenge over the long term is the “fiscal gap.” The fiscal gap represents the difference, or gap, between revenue and noninterest spending over a certain period, such as 75 years, that would need to be closed in order to achieve a specified debt level at the end of the period. From the fiscal gap, one can calculate the size of action needed—in terms of tax increases, spending reductions, or, more likely, some combination of the two—to close the gap.

For example, to keep debt held by the public as a share of GDP in 2086 from exceeding its level at the beginning of 2012 (roughly 68 percent of GDP) in our Alternative simulation, the fiscal gap is 8.3 percent of GDP (see table 1). This means that revenue would have to increase by 46 percent or noninterest spending would have to be reduced by about 32 percent (or some combination of the two) on average over the 75-year period. Even more significant changes would be needed to reduce debt to lower levels.

Brooks says "and", the GAO says "or"... which means Brooks is doubling the size of the problem. Were Brooks to resort to the obscure news source known as the "New York Times", he would find an explanation by Bruce Bartlett of the GAO's projection:

As the table shows, spending is not out of control. Entitlement programs like Social Security and Medicare are rising gently as the baby-boom generation retires. All other spending, including that for the military and domestic discretionary programs, falls – with the notable exception of interest on the debt. Interest rises sharply as the deficit rises, principally because the G.A.O. assumes that revenue will not be permitted to rise above its historical average – as Republicans continually insist....

That leaves interest on the debt as the principal driver of long-term spending and deficits. As the G.A.O. projections show, net interest rises from 1.4 percent of gross domestic product this year to 3 percent in 2020, 4.9 percent in 2030 and continues rising astronomically thereafter as interest accrues on the bonds previously sold to pay interest on the debt.

Interest rises from 6.1 percent of the federal budget in 2012 to 12.9 percent in 2020, 21 percent in 2030 and eventually reaches 59 percent if current projections are maintained through 2082, the last year in the G.A.O. analysis. As a share of the deficit, interest would rise from 19.2 percent this year to 62 percent in 2020. In the long run, virtually all of the deficit is accounted for by interest on the debt.

Bartlett asserts that the way to avoid that enormous increase in the cost of interest is for the present generation of Republicans to stop preventing government from paying for itself. Simply put, the GAO report does not support Brooks' "out of control Medicare" position, but is the result of out-of-control borrowing forced by Republican insistence that government not be adequately funded. If you don't want the national debt to grow and you're not willing to make the cuts to government expenditure necessary to avoid growing the debt, you have to increase revenues.

On the positive side, Brooks seems to have given up on his peer group's historic insistence that the problem is a single program called "medicareandsocialsecurity", and is now focused on Medicare. On the negative side, he's not being honest about what his sources actually say, and he's making what is fundamentally an appeal to fear. The OMB and CBO reports are only relevant if the Republicans refuse to work out a different deal, such that the automatic cuts are not changed. The GAO projection, which is half as dire as Brooks purports, indicates that the growth of Medicare costs remains a significant concern but that the larger concern is that continued, long-term deficit spending will cause the amount the U.S. has to pay to service the debt to snowball. This?

Chuck Hagel has been nominated to supervise the beginning of this generation-long process of defense cutbacks. If a Democratic president is going to slash defense, he probably wants a Republican at the Pentagon to give him political cover, and he probably wants a decorated war hero to boot.

All the charges about Hagel’s views on Israel or Iran are secondary. The real question is, how will he begin this long cutting process? How will he balance modernizing the military and paying current personnel? How will he recalibrate American defense strategy with, say, 455,000 fewer service members?

Fear-based nonsense. First (granting that he's younger than he looks), if Brooks recalls his history, back in 2000 candidate Al Gore was proposing greater military spending than candidate George W. Bush, and Donald Rumsfeld was predicted to have been chosen to oversee a reinvention of the military into a smaller, more nimble force. How did that turn out, again? Second, even Brooks knows that Hagel will not be overseeing a reduction in the active duty armed forces from 1.4 million down to @1 million. Brooks doesn't explain his number, but I expect he's extrapolating from the financial figures from the CBO - a reduction "from 4.3 percent of G.D.P. to 3 percent" over eight years, or 30% over eight years, with 30% of 1.4 million being 4.2 million... that's in the same ballpark.

Never mind that Hagel is unlikley to be Defense Secretary in eight years, that the scheduled defense cuts underlying that projection are not going to happen, that a 30% cut does not prevent prioritization (it would not be 30% of each line item, across the board), that Congress controls the purse strings, that neither this Congress or the President can bind the hands of their successors, or that Brooks himself has suggested that the net result (of the cuts that won't actually occur) may be an appropriate level of defense spending. "The sky is falling - we're turning into Europe and it's going to happen this month."

A still theoretical 30% cut in military spending is not going to "turn us into Europe."

What's missing from Brooks' column? A solution. Brooks implicitly rules out means testing when he argues that a tax increase on the wealthy is "barely a wiggle on the revenue line and does nothing to change the overall fiscal picture". Does he endorse the Democratic initiative to attempt to identify the most effective treatments for medical conditions, why trying also to identify and eliminate costly treatments that are either no more effective than less costly counterparts or that don't work at all? If so, he should write a column criticizing his own political party for its demagoguery about "rationing" and "death panels". Does he want to arbitrarily cap Medicare expenditures and replace the program with vouchers? If so, he's afraid to say so. Does he simply want to reduce compensation levels for doctors, hospitals, and medical equipment suppliers? What's left?

A Better Approach to Balancing the Budget

The biggest problem we face in trying to balance the budget is that neither political party actually puts a high value on balancing the budget. The Republicans like to talk about deficits until they are in power, at which point the Dick Cheney "deficits don't matter" philosophy takes hold and deficits explode. The Democrats want to preserve "social safety net" programs to a much greater degree than the Republicans, but left to their own devices the Republicans are more apt to expand those programs than to shrink them. When it comes to the major expenditures of the government, neither party is willing to propose cuts that have any chance of balancing the budget.

Our nation's deficits are primarily driven by health care costs. Once the recovery is complete, tax revenues will rise to historic levels and much of the annual deficit will go away "all by itself". If we could reduce our nation's healthcare expenditures to those typical of other nations, the deficit issue would largely vanish. But a Congress that chooses to tie Medicare's hands in negotiating bulk discounts in order to keep drug costs (and profits) high is not likely to address health costs in a meaningful way.

Let's approach the deficit from a different angle. Rather than talking about hypothetical (and sometimes imaginary) spending cuts or loophole closures, lets look solely at revenues. That is, let's have a discussion about what taxes we might create and raise in order to balance the budget with the least possible disruption to the economy. Such tax increases can be postponed until the economy is in a normal state - and perhaps avoided at that time - but if the spending cuts and tax loophole closures aren't there or if Congress isn't willing to implement them, the solution must come from new revenue.

Once the sources of additional revenue have been identified we can have the discussion: Do we in fact want the budget to be in perfect balance and, if not, how much new debt can we reasonably accrue and sustain? Are the new taxes and tax increases the best, most cost-effective, least painful and most efficient means of balancing the budget? If not, what spending cuts or loophole closures might be substituted?

If John Boehner believes a word of his statement,

The American Dream is in peril so long as its namesake is weighed down by this anchor of debt. Break its hold, and we begin to set our economy free. Jobs will come home. Confidence will come back.

We do this not just to boost GDP or reduce unemployment, but to secure for our children a future of freedom and opportunity. Nothing is more important.

He will be willing to live up to those words by putting aside his lesser concerns - including his party's pledges to special interest groups, his enforcement of the Hastert Rule and contempt for passing budget legislation on a bipartisan basis, his lust for special interest money, and the like, and get the job done by any means necessary. Personally, I don't think he believes a word of it, but I would love for him to prove me wrong.

Nothing should make the budget picture more clear to the average American than, "This is what your taxes will look like if we maintain current expenditures while balancing the budget." If the public says, "Then that's what we'll have to live with," then that's the answer. If the public says, "We prefer the cuts you propose as an alternative," then that's the answer. If the public says, "We prefer to run massive deficits," then its up to Congress to determine the extent to which they're willing to balance the budget despite those popular sentiments, and to take responsibility for the decisions it makes.

Bringing Facts Into the Budget Debate

I don't often see push-back against right-wing orthodoxy from the AEI but, in an article entitled Trillion-dollar deficits are sustainable for now, unfortunately, John H. Makin takes on a lot of the Republican Party's debt mythology:

Congress is attempting, unsuccessfully, to reduce “unsustainable” deficits and debt accumulation by engineering “crises” that are meant to force politically challenging action on spending cuts (entitlements) and tax increases (loophole closing, higher tax rates on the “rich”). The mid-2011 debt-ceiling crisis fiasco and the upcoming year-end “fiscal cliff” are striking examples of this dangerous tactic. The debt-ceiling crisis succeeded in getting Standard and Poor’s to downgrade US debt from a AAA to an AA+ rating and in setting up the sequestration portion of the upcoming fiscal cliff that has damaged business and household confidence by raising overall uncertainty.

The tactic of threatening to go over the fiscal cliff will fail to produce prompt, sustainable progress toward reduction of “unsustainable” deficits because deficits have been, and will continue to be for some time, eminently sustainable. The Chicken Little “sky is falling” approach to frightening Congress into significant deficit reduction has failed because the sky has not fallen. Interest rates have not soared as promised and, in fact, interest costs for the federal government have remained steady at a tiny 1.5 percent of gross domestic product (GDP) since 2002, having fallen to that level from a 3 percent average during the decade prior to 1997....

The hyperbolic claim that the United States is becoming Greece because of the absence of dramatic progress on deficit and debt reduction is unfortunately ridiculous. There is not yet a sign that a US fiscal crisis will emerge to force Congress to enact fundamental measures like entitlement reform to reduce the growth of spending, or tax reform to enhance revenues through faster growth.

Makin presents the case for reassessing the manner in which the U.S. government spends money, but is prepared to do so based upon the facts and long-term outlook as opposed to hoary bromides and fear-based arguments. Alas, that's probably why few have heard of him.

It's not necessary to agree on the causes of, or solutions to, the nation's debt and its projected growth in order to have a grown-up discussion of the issues. It's simply necessary that there be some grown-ups who are willing to discuss the actual facts and issues.

As Usual, Michael Gerson Overplays His Hand

It's not that he gets off to a good start - he's eager to jump sharks from the word "go" - but how can the man look himself in the mirror after serving up a whopper like this one:

There is a political problem at the heart of the budget debate. If Democrats get what they want — tax-rate increases on the wealthy — they can crow about it in public. If Republicans get what they want — structural reductions in entitlement spending — they are unable to crow. Their motivation is fiscal and ideological, not political.

Gerson's memory is perhaps too short to recall, but when his former boss, George W. Bush, was elected to office our nation had a budget surplus. A few years later we has massive tax cuts, two unfunded wars, the unfunded Medicare Part D benefit, and a massive budget deficit. And then, for Act 2, we got the collapse of the economy. Their motivation is fiscal? If you believe that the Republican Party cares about balancing the budget, you're a fool.

Remind me again, where was Michael Gerson when the Bush Administration was taking the explicit, public position that deficits don't matter? Oh yeah... he was writing Bush's speeches.

Is Republican opposition to Social Security and Medicare ideological, at least within the party itself? Certainly, but not an ideology born in a vacuum. The ideology that drives the Republican Party to attempt to undermine Social Security and Medicare is very much about politics - it's about pleasing powerful and monied interests that bankroll the party, and is about gaining and holding power over the long term.

If Gerson means to suggest that it's a double-edged sword - that the Republicans accept a certain amount of political risk when they make massive cuts to Medicare and Social Security a central part of their party's ideology, and that they thus misrepresent their motivations and goals so as not to alienate the beneficiaries of those programs - he has a point. But to make that point he has to actually admit that the leaders of his party cannot be trusted to tell the truth. That is to say, opposition may be driven by ideology at the top, but the rank and file Republican voters like Social Security and Medicare. They don't share the ideology of the party's elite, and the Republicans therefore obfuscate lest they find themselves unable to win an election.

The heart of the present conflict is that the Republicans have been lying to the public for years, a lie exemplified by the Romney/Ryan budget proposal. Romney promised that he was going to cut taxes, significantly increase military spending and, although he proposed an idea to transform Medicare into a voucher program starting a decade in the future, that he would maintain Medicare benefits for those 55 and older and would not cut Medicare spending. When he was asked for specifics we got "I'll fire Big Bird".

The truth is, if you want to balance the budget it's going to be painful. If you want to balance the budget without increasing tax revenue, it's going to be extremely painful to the middle class. Gerson had no problem with the Bush-era lie that "deficits don't matter", and he has no problem with the present Republican lie that the budget can be balanced - with trillions freed up for tax cuts and increased military spending - by closing loopholes in a revenue-neutral fashion and eliminating waste. His problem is that the Democrats refuse to take ownership of the Medicare and Social Security cuts his party desires.

In focusing on the specifics of Gerson's mendacity, let's not lose track of the big picture. This Congress cannot bind future sessions of Congress to its spending plan. What Gerson and the Republicans want is not an actual, workable plan to balance the budget over a period of years. They want the President to agree to structural changes to Social Security and Medicare that would be difficult for future sessions of Congress to undo, while offering no assurance that they won't be every bit as profligate and irresponsible as Bush with the "savings" that result.

The President is resisting that "deal", and Gerson's unwilling to articulate the stakes in an honest manner, so instead we get this noisome whinging about how the President is a meany-pants who isn't offering enough concessions to the poor, downtrodden Republicans.

Straight Talk on the Budget....

I generally don't read Jennifer Rubin. I think she's smart enough to write something interesting or informative, but she has no apparent inclination to do so, and she lacks the capacity to spin her talking points into something less overtly partisan in the manner of David Brooks. In fact, she's so ridiculous in her partisanship, much of what she writes could pass for comic relief.

But one of her gazillion headlines (yes, she's prolific) in my news feed caught my eye: "Can anyone offer straight talk about the budget?" That's a fair question. Her opening is actually pretty good,

Republicans are touting a Battleground poll that finds:

Three in four voters want to “cut government spending across the board,” but 59 percent oppose making significant cuts to the defense budget and 46 percent support ending foreign aid. The slightest majority backs reducing Social Security and Medicare benefits for seniors that have higher incomes, but 64 percent oppose raising the retirement age to begin collecting Social Security benefits.

But, wait. The same poll finds “60 percent of respondents support raising taxes on households that earn more than $250,000 a year and 64 percent want to raise taxes on large corporations.” However, “69 percent of respondents oppose raising taxes on small businesses that earn more than $250,000 — a group that the GOP is trying to protect with its push to extend the Bush tax cuts.”

In other words, the American people want cake and ice cream for dinner – and a unicorn. They want contradictory things. They imagine the only taxes that need go up to sustain the entitlement programs as currently constituted are those of mega-millionaires. They don’t perceive the trade-offs between unrestrained entitlement spending and pressure to cut other spending (e.g., education). They apparently don’t understand that many small businesses pay taxes under the personal income tax code, making them “the rich.”

One wonders why Republicans would be touting a poll that, even when they try to spin it in their favor, doesn't do much to advance their agenda. I guess they don't have much else to work with. But where Rubin quite predictably falls on her face is in her failure to understand (or is it to admit) why voters operate under the misconception that we can cut taxes, increase military spending, sustain Medicare and Social Security at present levels, and somehow at the same time balance the budget by "cutting waste" and reducing public assistance directed at the "undeserving poor". Did she somehow miss that the mindset she laments, the one I just described, reflects exactly what Mitt Romney claimed that he could to if elected President?

Or is it that her ideological blinders are up and fully operational?

It is not that politicians are bad communicators, although some are. It is that they do not want, as President Obama keeps instructing, to do the math. If they did, they’d have to concede, for example, that raising taxes on the rich raises a pittance compared to our $16 trillion debt.

This is an echo of a Republican talking point that I have often criticized. The argument is basically, "Taxes on the rich won't raise enough revenue to be worth it, so we shouldn't bother with a tax increase." Letting the Bush-era tax cuts on the wealthy expire would produce roughly $85 billion per year in tax revenue. What sort of "serious" spending cut proposal do we get from the Republican Party? Cutting the @$445 million contributed to the Corporation for Public Broadcasting? John Boehner has proposed changing the manner in which Social Security benefits are indexed to inflation in order to save $20 billion per year - if $85 billion is too little to be worthy of consideration, why is Rubin's party of choice intent on pursuing targets that are comparatively small, even trivial?

In particular — and this is critical in assessing the president’s moral obligation — Obama has not prepared the American people for the fiscal changes that are needed. He’d rather score political points than be honest with voters. He’s got the biggest megaphone and if he doesn’t level with voters, they aren’t going to get it. (So he doesn’t. And they don’t.)

Oh, no doubt, politicians of both parties don't want to "prepare the public" for the consequences of balancing the budget. But again, Rubin's complaint represents the Republican agenda - her party does not actually care about balancing the budget. There is nothing that stops Speaker Boehner from gathering the Republicans in Congress and passing a serious, balanced budget, save for the fact that they don't want to.

Presidents who try to level with voters about the state of the economy and the hard choices that lie ahead... That would be Jimmy Carter and... um... perhaps only Jimmy Carter. It's admirable that Rubin rejects the sunny but false optimism of Reagan and the fiscal incompetence of George W. Bush,² but the problem is twofold. First, the problems the economy faces from debt are exaggerated, and the politicians staging this "high stakes drama" know that. Second, politicians on both sides of the aisle want to be re-elected, so whenever possible they prefer to whisper sweet nothings in our ears over sharing harsh truths.

The net effect? In a few years a Republican will run for the White House, probably on a budget "plan" that sounds very much like Romney's, and Rubin (if she's still around) will be one of his primary cheerleaders. Lather, rinse, repeat.
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1. From NPR, "For High Earners, Expiring Tax Cuts Would Hit Hard".

"Virtually everyone in his income category will see their taxes rise an average of about $14,000," says Roberton Williams, a senior fellow at the nonpartisan Tax Policy Center. "That's about a 5 percent reduction in their after-tax income, and 5 percent is something that's, even at that income level, noticeable."

Yes, I agree. Having your monthly take-home pay drop from @$23,333 to @$22,166 is something that you're likely to notice. But if we are to compare relative hardships in the modern economy, having somebody in that income range complain "I will have to decide what to do for vacation. I may not be able to put as much away for purchasing a replacement car when my car dies" reflects a pretty significant disconnect from the daily experience of most families.

2. I know, I know, but let's pretend she's thought this through.

Hard Reality: The Republicans Don't Want to Balance the Budget

You would think that our national experience would teach us something: The Republicans are very good at cutting taxes and spending money, but have demonstrated next to no actual interest in balancing the budget. Still, the snake oil sells and a huge percentage of Americans believe that we can easily and painlessly balance the budget by cutting "welfare", funding for the arts and "foreign aid".

Diane Rehm interviewed Grover Norquist and a Republican Congressman-elect, and the incoming Congressman, Ted Yoho, insisted upon taking a principled stand: He was not going to sign Norquist's anti-tax pledge.

I made a pledge and a promise to the people that I'd go up to Washington and do the very best I could for our district and our country. And signing a pledge wasn't going to solve the problems our nation faces fiscally. You know, and I made a pledge to, you know, two things: one is to our country, I pledged allegiance. And I made a pledge to my wife to be the best husband I could be.

But as Yoho explained his philosophy toward taxes and the budget, Norquist had to be smiling. Why would he need Yoho to sign the pledge when Yoho has already internalized Norquist's "drown it in the bathtub" philosophy of government?

You know, we don't have a revenue problem in this country. You know, our debt is going to kill us, and the biggest part of our debt is our spending. We have got to get our spending under control. And if you look back where Canada was back in the 1960s when they had a real liberal congress or parliament and they put in all the entitlement programs and, you know, tax and spend more, you know, it killed their economy. And they're at the brink of disaster.

Yoho seems sincere, but "the biggest part of our debt is our spending" is an odd statement. Canada has a pretty good track record for balancing its budget, strong per capita income and growth, and its people have a good standard of living. He thinks Canada is at the brink of disaster because of its Medicare program? What's actually going on in Canada...

The report's outlook for the world is decidedly bleaker than for Canada, pointing out that after five years of crisis the global economy is again weakening and risks proliferate.

"The risk of a new major contraction cannot be ruled out," said Pier Carlo Padoan, the OECD's chief economist, citing the ongoing recession in the euro area, a below-par economy in the U.S. and a slowdown in many emerging markets.

That is, the biggest threats to Canada's economy are external.

In fact, the OECD anticipates the U.S. economy will speed up faster than Canada's next year at two per cent and in 2014, at 2.8 per cent growth.

Because the U.S. is starting from further behind, Canada will still maintain an advantage in the recovery over its southern neighbour, however. For instance, the organization projects Canada's unemployment rate will fall below seven per cent by 2014, while in the U.S., it is expected to remain close to eight per cent.

Yoho's positions on Canada are, to be blunt, divorced from reality. Yoho continues to present the Republican / Tea Party line:

This has been, you know, over the course of the last 15, 20 years, bad policies and people not dealing with it. It's time for us to stop talking about it and putting another Band-Aid on it. These are going to be some tough decisions that are going to be -- have to be made. And this is the year we need to do it because if we don't make these decisions, we're going to be in the same place where Greece or Spain was.

Except here's the thing: The Republican Party is not interested in making those tough decisions. They claim to have a budgetary genius in Paul Ryan who, after years of careful thought and collaboration with presidential nominee Mitt Romney, was able to specify a desire to cut funding for PBS. They have a leader in budget negotiations in the form of John Boehner who, building on last year's negotiations and Ryan's budgetary proposals, tosses out numbers that are neither supported by specific budgetary proposals nor sufficient to balance the budget. That's not leadership - it's a continuing display of cowardice.

And why are these Republican leaders such cowards? Because they know what Yoho will find out if the budget is balanced through cuts - the people who have been buying that snake oil will howl when they find out that the Republican approach to balancing the budget necessarily involves inflicting serious pain upon them. It's not that Boehner couldn't propose specific cuts to government programs, including Social Security and Medicare, it's that he doesn't want to face the political consequences. He hopes to trick the Democrats into proposing the cuts so he can argue, "I only voted for them because I'm fiscally responsible, but the cuts that hurt you came from the Democratic Party. I had no choice."

Paul Krugman has reproduced a graph I have at times shared, illustrating that it's Republican policies that have created the present "deficit crisis". Here's the thing: If you and your party are unable to actually identify budget cuts, if you and your party are the ones primarily responsible both for revenue shortfalls and for the unfunded expenditures that drive up the deficit, you owe the voters a moment of honesty. You need to either admit that you don't care about balancing the budget, and that the entire debate is a pretext for your long-standing goals of cutting Medicare and Social Security to the bone, or you need to admit that although you would like to see the deficit reduced you would prefer to have out-of-control deficits and spending growth if the alternative is to raise taxes or risk losing the next election.

Perhaps I underestimate Yoho, but if I do, what are the implications of this:

Rehm: But let me just ask, Congressman Yoho, would you be more willing to raise taxes on upper-income Americans, more willing to do that than to allow us to go over the cliff?

Yoho: No, ma'am.

If you care about balancing the budget, you balance the budget. Once you figure out how to balance revenues and expenditures, you can take a deeper look at the numbers, figure out where you can or should cut, where various taxes and tax rates might be adjusted or tweaked, etc., all without throwing the budget out of balance.

If you protect low tax rates for the wealthiest Americans despite budgetary consequences that you insist threaten the health and future of the nation, can't we be honest about it? You might not mind it if somebody else did the hard work and took the political risks necessary to balance the budget, but you have other priorities.

Politics, Policy and the Fiscal Cliff

Robert Kuttner analyzes the President's proposals on taxes and the budget as we approach the so-called fiscal cliff:

However, despite the president’s elegant move on tax policy, there are two other aspects to deficit and budget politics where his posture is not quite so firm.

One is whether to include Social Security and Medicare reform (by which the right means cuts) in a Grand Bargain.

This was always a dubious idea, and part of the right’s hidden agenda to mix up current budget politics with long-term issues about social insurance. Yesterday, Obama came closer than ever before to saying that he would not sacrifice Social Security.

First, the President expressed during the first debate that Social Security reform was on the table:

You know, I suspect that, on Social Security, we've got a somewhat similar position. Social Security is structurally sound. It's going to have to be tweaked the way it was by Ronald Reagan and Speaker -- Democratic Speaker Tip O'Neill. But it is -- the basic structure is sound.

If the Republicans can put politics aside, they can get a Social Security deal inside of a few hours of negotiation - minor adjustments that improve the program's fifty year projection and make the accountants happy. The President appears to be telegraphing that no further deal will be made.

Second, the Republicans made clear first with their demagoguery about "death panels" and Obama's Medicare spending cuts, and second with their retreat from their own voucher proposals for anybody under fifty-five, that they have no stomach for actually reforming Medicare. They want to do it, but they lack the courage and fortitude.

The President can play the same game that Romney and Ryan attempted during the election - "We'll preserve Medicare for now, but we'll cut spending in the future, when the economy is stable and we've had time to study the issue and identify savings." Frankly, if the goal is to avoid the "fiscal cliff", that's all you can do in the short term. Whatever is agreed it's reasonable to anticipate that three, five years down the line when the cuts are supposed to be put into effect, Congress will blink. Just as they do every single year with the "doc-fix".

Kuttner argues,

Obama has let it be known that he wants the deficit reduction to be “back-loaded”—little if any in the first year or two, and then a gradual phase-in. That’s better than the reverse. But in the end game, the most important thing for Democrats is not to be locked into any multi-year mandatory cuts.

Barring some kind of multi-year super-deal—that Obama should avoid—the rules of Congress prohibit one Congress from binding another.

Right now, arbitrary, mandatory cuts are working pretty well for the President. If a new fiscal cliff is created to compel another round of negotiations a year from now, it's likely to be Congress that is running scared.

Realistically speaking, any deal would be in two parts - tax and spending changes that will be put into effect this year and an agreed framework for future years. I'll grant, if you push cuts too far into the future you are likely to see that although some reform measures are put into immediate effect, key future measures not. Neither side wants to fumble that ball - they both have wish lists they want put into immediate effect, and likely both hope to trade them for promises of what they "will" do in the future.

How to Approach Tax Reform and Balancing the Budget

Mark Thoma quotes Robert Reich on "grand bargain" negotiations, with Reich proposing how President Obama could open negotiations by describing a set of tax increases and loophole closures that would balance the budget, without any need to "raise taxes on America’s beleaguered middle class, cut Social Security or Medicare and Medicaid, reduce spending on education or infrastructure, or cut programs for the poor".

Although Reich presents his argument in apparent earnest, I don't think he expects that the President will follow his advice. Thoma presents a more basic suggestion,

Obama should at least reverse the Republican pre-election mantra and insist: raise taxes first, then we'll talk spending cuts.

I think you can take a bit from all three columns. The President could actually use Reich's model to illustrate "This is how we can balance the budget with tax increases," followed by, "Here are the tax increases and loophole closures I actually propose." He can add, I'm not saying these tax increases and reforms cannot be reduced or eliminated but I am saying this: before I'm willing to revisit that part of my proposal we must identify enough spending cuts to balance the budget, and only if we accomplish that can we start talking about additional spending cuts that might offset the revenue we otherwise need to raise through the tax changes I've identified."

I also think he should stick to his guns on Social Security, even if it makes some people gnash their teeth, with the same sort of tweaks that were made in 1982. Change as little as possible, in a manner that will make the CBO happy over a fifty year projection. It's the position he took in the debates, and it's consistent with the notion that Social Security should be self-funding.

Frankly, I think the conceit of the "grand bargain" can get in the way of good policy formation, just as throwing three competing goals (universal coverage, revenue neutrality, reduction of healthcare costs) into healthcare reform unnecessarily complicated the debate and legislation while arguably producing a weaker bill than might have been achieved through separate legislation. Social Security expenditures are increasing, but are not out of control. The federal deficit is not all that bad when you remove Medicare, Medicaid and Social Security from the mix. The real issue is the present cost and projected growth of healthcare expenditures. Ezra Klein summed up the issues a few days ago with a series of CBO graphs.

What these three charts tell you is simple: It’s all about health care. Spending on Social Security is expected to rise, but not particularly quickly. Spending on everything else is actually falling. It’s health care that contains most all of our future deficit problems. And the situation is even worse than it looks on this graph: Private health spending is racing upwards even faster than public health spending, so the problem the federal government is showing in its budget projections is mirrored on the budgets of every family and business that purchases health insurance....

Page 9 of the report includes this remarkable statistic: If we just continue on the way we’re going , then “spending for Social Security, Medicare, other major health programs, defense, and interest payments” will “nearly equal all of the government’s revenues in 2020 and would exceed them from 2022 onward — leaving no revenues to cover any other federal activities, such as income security programs, retirement benefits for federal civilian and military employees, transportation, research, education, law enforcement, and many other programs.”

The projection does not include reforms not yet in effect, i.e., those of the Patient Protection and Affordable Care Act ("Obamacare"), but it's beyond obvious that healthcare costs are the elephant in the room. The cost control measures of Obamacare are not going to fix the problem, but at least they're a starting point. If the Republicans choose to continue to pretend that this is a problem we can fix by repealing the first serious effort to bend the cost curve, or by cutting funds for PBS, they're (still) not serious about balancing the budget. If you recall, when the Democrats proposed a modest measure to help patients understand end-of-life care, something that could conceivably lead to better care and outcomes for elderly patients, the Republicans demagogued about "death panels".

The only Republican reform ideas we seem to be hearing about on healthcare are to turn all public insurance programs into voucher programs, and to strip preventive care out of health insurance and pretty much make everything but catastrophic care self-funded through a MSA. "Let's not look at what is working here, and certainly not at what is working in the rest of the world." If our nation's per capita healthcare expenses were reduced to the levels typical of other developed nations, most of our immediate budgetary problems would disappear - we would still have a cost curve issue, but we would have a much better starting point. The Republicans won't consider emulating even the most market-based foreign healthcare models - not just because ideology trumps balancing the budget, but because it's easier to argue for cuts if you first contrive a crisis.

If You Want a Balanced Budget....

At a bare minimum, you need to vote for politicians who are serious about balancing the budget. How do you know if balancing the budget is a priority to a politician? Ask him to produce his plan. A weak plan might sound like "We'll cut spending, and raise taxes if we have to." A stronger plan would identify some, most or all of the spending cuts and tax increases necessary to balance the budget. And if you hear something like this,

First, we cut taxes....

You can pretty much take for granted that you're being played for a fool. If the rest of the plan never gets more specific than "tax reform", "cut funding for PBS", and the like, but you choose to believe that the politician at issue is serious about balancing the budget, it's all on you. And if you hear that politician add, "The budget will be balanced in ten years," that is, two years into the next President's term, he's not actually promising to balance the budget.

At The American Conservative, Jordan Bloom expresses desire for a balanced budget amendment - and he's so eager to get it that he proposes what he describes as a "nuclear option", an Article V constitutional convention - to get one. I've commented on balanced budget amendments before - most of them... actually , all the examples I've seen... are weak, politically driven, full of loopholes.... The most sensible comment I've heard on the matter remains that of Warren Buffett - if you want a balanced budget, pass a law that sets a maximum threshold for a deficit and then bar any Member of Congress who votes for spending above that threshold from being reelected. Problem solved.

If you include loopholes in your balanced budget amendment, they will be exploited to the point that the amendment becomes meaningless and can be expected to distort the budgetary process. If you don't include loopholes, you tie the government's hands when deficit spending is necessary, you encourage the sort of budgetary shenanigans you see in state to pretend that a budget is balanced, such as balancing the current budget by shifting the debt into future budgets, and creating a context in which budgetary disputes could end up being litigated - do you seriously want a single federal judge to review and potentially revise the federal budget? Even if it were practically feasible, and could be completed in a timely manner, judicial review would intrude upon what is intended to be a legislative process. You could also inspire the government to expand the money supply - to balance the budget through tools that would trigger inflation.

Proponents of a balanced budget amendment often embrace the notion that the federal government's budget is analogous to a household budget, and that you should not spend more than you "earn". Lots of problems with that... not the least of which are that taxes are not analogous to income, there are times at which running a deficit can be necessary and others when it's good policy (ideally the two will mostly overlap), and the big picture is clouded by the deficit nobody likes to talk about - the trade deficit.

In the biggest picture sense, the concept that you cannot deficit spend forever - that you cannot indefinitely expand the debt burden at a rate that exceeds inflation, has merit. Yes, it would make sense for the government to work on the long-term fiscal health of the nation when the economy is robust, not to spend irresponsibly - or cut taxes irresponsibly - when they have the opportunity to move the budget toward balance or keep it there.

There are two main objections to the plan. The first is that one can never be quite sure what’s going to come out of a constitutional convention. The second is that a balanced budget amendment would probably mean in the near-term rapid austerity and arbitrary spending cuts. You know, like the fiscal cliff–a net deficit ameliorant–but bigger.

On the first front, not only could you end up with a constitution that's unrecognizable by historic measures, it might not even include a balanced budget amendment. On the second front, Bloom basically concedes the policy argument - a balanced budget amendment could put us into a cycle of a worsening recession followed by tax cuts necessary to counterbalance reduced government revenues and the right-wing horror story becomes reality - we become Greece.

It’s worth pointing out that had Romney won last night, this option would likely be closed – conservatives would be expected to believe that he would work to restore fiscal discipline (while increasing spending on wars and “preserving” Medicare).

Romney talked about balancing the budget, his actual promises did not encompass much more than cutting taxes (and PBS). If you believe his confused comments at the debates, the tax cuts were going to somehow be revenue-neutral, but he was unwilling to offer specifics. I do believe that he would have delivered his tax cuts, just as G.W. delivered the cuts he promised, as that's what his financial backers wanted him to do. The rest? Snake oil.

The Conservative Vote for Romney - Reluctant at Best?

One of the aspects of the Republican Party that I find interesting is that it is deemed the "conservative" party. That, I suppose, is because it is devoted to cutting taxes for the wealthy and gives sufficient lip service to various lines of conservative thought to keep the votes rolling in. But other than the tax cuts, it's history of governance isn't what I would call "conservative".

At the Volokh Conpsiracy, (libertarian) David Post summarized his views on the candidates, and was in some senses easier on both of them than I would have been. He gives "Obama maybe a B or B+", noting that Obama inherited a "global economic meltdown" from which we're recovering, adding, "For some reason I cannot even fathom, many otherwise reasonable people seem to regard this as a terrible failure on Obama’s part."

Mitt Romney? "The guy’s as light a lightweight as I can imagine – he makes Bush look like Schopenhauer. "The guy’s as light a lightweight as I can imagine – he makes Bush look like Schopenhauer." Post is concerned that he has no sense of how Mitt Romney would respond in a crisis situation, but his impression is that "reacts the way Bush reacted when something he couldn’t imagine happening actually happened... and it’s not a comforting thought".

My personal thought is that if the Republican Party were able to nominate a centrist, pragmatic, fact- and issue-driven businessperson, this election wouldn't be much of a contest. That type of candidate, I think, could pull in 60% of the vote. But thanks to the nomination process, the need to pander to certain elements of the base to get a shot at the White House, that's not going to happen. It's difficult to get somebody better than a G.W. Bush, and frankly now that the Tea Party Movement has recognized the power of the primary it may be difficult to do better than a Romney - somebody who seems to hold no core values or beliefs, and will say and do anything to advance his own self-interest.

Had Romney articulated the positions associated with his latest self-reinvention, the centrism he outlined during the debates (more or less "I'll do exactly what Obama's doing, but better - and I'll cut taxes") it's unlikley that he would have been any more successful than Huntsman - a guy who made the mistake of taking actual positions early in the primary process, and thus ended up being one of the first guys shoved out of the clown car. When you consider that the last three men standing were Romney, Santorum and Gingrich... wow. But Romney can attest that if you survive the nomination process, even if you willingly surrender your soul to achieve that goal, it's enough for most of the base to simply not be the other guy.

There's an interesting assortment of takes on "how I'm going to vote" from various flavors of libertarian and conservative at The American Conservative. Some of the comments are insightful, some are odd or shallow, some are witty, others serious, and some mix and match, offering an insight in one sentence and a head scratcher in the next. Sometimes you get to the end of the comment, read the author's claim to fame, and... "now it makes sense" - not necessarily the reasoning, but why the author is taking that particular view. For example, "Within 30 years, the U.S. will be majority non-white and will cease to exist as we’ve known it," came from a VDARE.com editor, and the snark, "on the economy, unemployment is too high, growth is too slow, and Barack Obama is too 'green'" came from a Fox News contributor. There's a lot of hand-wringing about, of all things, feminism and yes, the absolute horror that churches be required to offer birth control to employees of their secular operations. Okay, I can't resist taking a shot at this one:

For me, there’s never even been a possibility of voting for Obama. The Democratic Party history is one immersed in slaughter: removal and abuse of the American Indians, the desire for a national police force to return escaped slaves, and the concentration of loyal Americans of Japanese descent into camps.

Obama has embraced this wretched tradition. Indeed, no president has overseen a loss of civil liberties more dramatically than the current one since Franklin Roosevelt disgraced the once august executive office. Not only did Obama fail to close Gitmo and reverse Bush’s policies promoting “national security,” he’s not-so-slowly Gitmoizing the entire United States. As the great Robert Higgs has argued, if you don’t believe we are living in a police state, you must be blind.

Yes, it's all one unbroken history, with Obama being the worst president since FDR due to his failure to overturn the atrocious policies put into place by... George W. Bush... and due to his adherence to the Constitution when Congress - with overwhelming Republican opposition to Obama's plan - refused to fund the closure of the Guantanamo Bay detention center. Let's all sing along, "Don't know much about history...."

What's interesting is how many are unwilling to vote for Romney, declaring that they'll either abstain from voting or support a third party candidate. More than a few prefer Obama.

It's easy to get discouraged with our system and its two parties - it's difficult not to feel taken for granted, to not feel like you're choosing the lesser of two evils. I don't know what a Romney victory would mean for the Republican Party, although it's difficult to imagine that it would lead to the party being more conservative. Many of the authors on the American Conservative website are concerned that Romney is ignorant of foreign policy and that his advisers will push him to involve the nation in new, large-scale military conflicts. If anything weighs against that possibility, it would be that Romney appears to be exceptionally risk-averse. It's difficult for me to imagine that he would push the country toward war, unless the polls were telling him that the nation was eager to go there. On the other hand, given how spineless he has proved to be on economic issues, it's easy for me to imagine his pushing through his proposed tax cuts with an associated explosion of debt (but recall: he's not going to balance the budget for a decade, so he takes no responsibility for either the starting or ending points of his economic "reforms").

What bothers me most about Romney it not his foreign policy ignorance. It's how freely and easily he lies. How it doesn't even seem to bother him to dramatically change his message, his supposed core values, from day to day, from audience to audience. To the extent that his quest for self-advancement is likely to lead him down a path he believes will get him reelected, it's still difficult to take comfort in the notion that his cautiousness and focus on his own popularity might moderate his agenda. From an economic standpoint the path of least resistance is apt to look like Bush's first term. I agree with those who see the most likely lesson of a Romney victory as being "You can brazenly lie your way all the way into the White House," and I would prefer that the lesson be, "You can fudge the truth, as politicians do, you can spin, you can demagogue, but there's a point at which your deceit disqualifies you from elected office."

Highly Informed, Highly Engaged Voters Won't Be Fooled by Douthat

It's reasonable to infer that when a partisan Republican columnist laments that he has "sympathy for the undecided", his column is going to attempt to explain why undecided voters should break in favor of his candidate of choice. Alas, Ross Douthat has not polished his skill at making this form of argument to the extent of his colleague, David Brooks, but he gives it his best shot.

Douthat's first tactic, flatter his audience. People make fun of undecided voters, Douthat laments, but you, his undecided reader are part of a "rarer species" than the undecideds who are subject to ridicule - you are "the highly informed, highly engaged, yet still conflicted voter."

Whatever partisans on both sides may insist, there are good reasons that a high-information voter with views somewhere near the American median might still regard this November’s decision as a harder-than-average call.

Rarer than rarer than rare, you're not only a highly informed undecided voter, you're one whose views coincide with the latest opinion polls. I guess Douthat credits you with enough intelligence to recognize that Romney's latest positions are poll-driven, and that you cannot trust that he has departed from the similarly poll-driven positions he took in his past campaigns because the only thing you can trust about the man's political positions is that he'll say what he thinks it takes to get himself elected. No, who am I kidding, Douthat's not crediting you with that much intelligence - if he were, he would write a different column.

So what, to Douthat, is "one of the biggest issues the campaigns are arguing about", the only one he writes about so presumably the one he believes will most influence the vanishingly small group of highly informed independent voters whose views align with the latest opinion polls? The standard Beltway obsession, "the question of how to bring our spending in line with our revenues". Douthat presents a statement he knows to be false, but who cares about facts when you can fall back on platitudes?

Conservatives think we tax too much and liberals think we spend too little, but the present combination of relatively low middle-class taxes and relatively generous entitlement spending is one that most Americans would happily maintain in perpetuity.

Let's see... on the one hand, we have a party that is promising a small tax increase on the wealthiest Americans, and the hope that through economic growth and spending cuts we can sustain the present system. On the other hand we have a party that is promising a $4-$5 trillion tax cut to be paid for by spending cuts and the closing of tax loopholes, but refuses to get more specific about how that will be achieved than "We'll defund PBS", and is simultaneously proposing a $2 trillion increase in the military budget. As for spending less? The only specifics, turning Medicare into a voucher program, are pushed off a decade into the future - everything stays the same for now.

It is perhaps not an unfair simplification of those different visions of our future budget as "Conservatives think we tax too much and liberals think we should balance the budget before we talk about tax cuts," but it is absurd to pretend that Romney's budget-busting military spending and refusal to commit to even a single meaningful spending cut constitutes anything but thinking we spend too little. And if you look at the history of Douthat's party, going back to Reagan, the whine going into the election has been "liberals tax and spend too much" and the policy coming after the election has been to go on budget-exploding spending sprees - the problem is with taxation that brings the budget closer to balance, not with the spending.

You can argue that trying to cover government spending through tax revenues is a horrible thing, and certain Republicans love to defy math, logic and history by purporting that tax cuts can be presumed to "pay for themselves" by producing economic growth... never mind how G.W.'s tax cuts were followed by sluggish growth - much less impressive than growth under Clinton - propelled in significant part by a housing bubble, and culminating in economic catastrophe. (Yes, Clinton's economic boom was driven in part by a different bubble, the Internet bubble, but at least he didn't squander the tax revenues.) A highly informed undecided might say, "I'm undecided because I want to vote for a guy who prioritizes long-term fiscal responsibility, someone whose budget priorities are first to balance the budget and only then to discuss what we might do with an assumed future surplus," but they're not going to fall for Douthat's oversimplification.

If we are to actually assume that Douthat's undecided voter is in fact highly informed, that voter knows this: Democrats are more likely to balance the budget when economic times are good, but are less likely to call for cuts in social spending when the economy is faltering or in recession. Republicans are going to call for tax cuts, inuring principally to the benefit of the wealthy, no matter what the economic conditions are, when in power are likely to adopt the Dick Cheney philosophy of "deficits don't matter", would prefer to cut and privatize Social Security and Medicare, but have balked at serious reform because they don't want to alienate the important voting bloc of seniors who receive, or are about to start receiving, those benefits.

The highly informed undecided voter is aware that Romeny is trying to "split the baby" by promising that nothing will change for anybody over 55, but that the promise likely translates into "nothing getting done" because ten years from now somebody else will be in the White House, that President will be as terrified as Romney at standing up to seniors, and that any budget proposal that doesn't go into effect for a decade whil have no impact on the budget, debt or deficit during the next eight to ten years.

At this point, Douthat's highly informed, undecided voter is no doubt wondering, "Why do I bother reading this guy's columns," as they understand that on the issue Douthat deems of highest importance, Romney offers nothing but snake oil and Douthat's nonetheless attempting to argue that it could in fact be a cure-all.

Back to "Beltway wisdom":

Unfortunately, the status quo can’t actually continue: the combination of the baby boomers’ retirement and rising health care costs means something has to give.

Social Security is a big expenditure, certainly, but as Douthat knows, it is not in imminent fiscal peril and can be rendered solvent for many decades to come through some relatively minor adjustments. Granted, the wealthy balk at increasing the FICA cap, and both older Americans and the political left oppose raising the retirement age or cutting benefits, but it has been done before and can be done again. Douthat knows that the only President to present a serious proposal on this issue, to make the same type of adjustments that were put into effect under Ronald Reagan is President Obama. And, one must assume, so does his highly informed yet undecided voter.

Medicare is a more pressing issue, not so much because of its present size but because of its projected growth.

The White House is arguing that we can limit health care spending largely by bureaucratic fiat, by empowering experts to change the way doctors and hospitals spend and treat and charge. But we’ve tried variations on centralized cost control for years — “Medicare Whac-A-Mole,” Reason magazine’s Peter Suderman has called it — without reaping anything like the promised benefits.

Douthat's highly informed voter can see through Douthat's charade. This voter knows that there is nothing unique in the government's effort to try to steer patients toward the most cost-effective care and to reduce waste - that private insurers do that as well, sometimes with a very heavy hand.

The highly informed voter is probably also thinking, "The best Douthat can come up with to back up his rhetoric is a columnist for Reason magazine? Isn't that a bit like inbreeding - one columnist who knows little to nothing about the subject matter attempting to support his political case by referring to another guy who who knows little to nothing about the subject matter but has a similar political philosophy?" They might click through to the article and see that it opens,

House Republicans, you may have heard, are trying to “end Medicare as we know it.” And well they should—Medicare as we know it is the nation’s biggest fiscal disaster.

And recognize that it's not going to attempt balance. They might wonder, "Does Douthat think that marrying Megan McCardle gave Sunderman a bachelor's degree level understanding of economics by proxy?" Or, "Why is Douthat citing as an expert a guy who is part of a political debate about Medicare, but is not part of the actual discussion amongst experts on Medicare reform - the year-old column of a non-expert is the best Douthat can come up with?" They might pause for a moment and wonder, "Has Douthat ever challenged Romney's pretense that a couple of off-the-cuff blog posts constitute 'studies' that prove his mystery budget can work?" and again wonder, "Why am I still reading this guy?"

Seriously, resorting to Sunderman is fine if you oppose Medicare, don't believe that the nation should provide comprehensive health insurance to the elderly as a matter of policy, and don't mind a somewhat inconsistent narrative explaining how the program is an affront to libertarianism. But if you're the highly informed centrist that Douthat proposes, one who wants to continue Medicare as a meaningful program, you're apt to find Sunderman's article to be long but ultimately unconvincing. You already know cost control is difficult and that past efforts have resulted in uneven benefits, and Douthat presupposes that you nonetheless want to keep trying to find solutions that will allow Medicare to continue more or less in its present, highly popular form.

Douthat, as usual, goes from there to worse:

The Republicans are arguing for a more competition-driven approach, which would allow private insurers to compete for Medicare dollars, and hopefully bid down the cost of coverage. There are studies and pilot programs that suggest this kind of structural change might lower costs.

The highly informed voter sees right through Douthat's word salad: "The Republicans want to turn Medicare into a voucher program, have the benefit shrink in value over time relative to medical inflation, and put much more responsibility for health care costs onto seniors while simultaneously providing a massive transfer of wealth to participating private insurance companies." They also can see for themselves that Douthat's pretense that "studies and pilot programs" support the viability of vouchers is false - they know that Medicare came into existence because private insurers did not want to insure the elderly at an affordable price, and know that Medicare Advantage participants needed a subsidy in order to compete with Medicare - and are probably thinking, "Douthat at least linked to a libertarian screed to support his last argument - why no link for these purported 'studies and pilot programs'?"

Douthat continues,

But there isn’t a large-scale example that conservatives can point to as the template for the United States to follow.

At least, nothing that has worked. If you look for "large-scale examples" of approaches to health insurance that reduce cost and control inflation while preserving choice of doctor, quality of care and quality of outcome, you can look around the world and find many - all of which would be decried by the Republican Party and people like Sunderman as "socialized medicine". You will find that those programs were implemented largely as a response to the faltering or failure of market-based alternatives. You will find that "single payer" is not prerequisite to success, and that it is possible to rely upon private insurance companies to provide coverage under a national health insurance program.

What you will find when you look for "a large-scale [or small-scale] example" is that the most market-based country in the world, the United States, has not only repeatedly failed to demonstrate the superiority of "a more competition-driven approach", its approach has made health care exceptionally costly without an associated improvement in outcomes. If you want to take it on faith that one more experiment will disprove decades of failure, there's nothing wrong with adhering to your philosophical principles, but if you are a highly informed voter attempting to perpetuate Medicare while realizing significant cost savings you know up front that voucher proposals are just another round of snake oil.

On to the hollow man:

That same skeptic’s eye would also tell our hypothetical undecided that neither side is being entirely honest about the costs of its approach. The Democrats are pretending that taxing the rich can pay for almost everything. The Republicans are pretending that neither today’s taxpayers nor today’s seniors need bear any of the burden. The high-information swing voters are basically left to decide which dishonesty is worse, and which unacknowledged cuts or tax hikes they’d rather risk having to bear.

The fact is, "The Democrats" are not claiming that a modest tax increase on the rich will balance the budget, certainly not that it will "pay for almost everything". Douthat probably knows that his claim is untrue - after all, he can read - and no doubt any highly informed voter who has not yet given up on his column knows the claim to be untrue.

But what of the criticism of the Republican Party? It's a point that even Douthat found it hard to gloss over, the aforementioned fact that the Romney/Ryan Republican approach is, "We'll kick the can down the road a decade, at which time Medicare will be a voucher program." Douthat apparently would like to see Medicare immediately tranformed into a voucher program - his criticism is not of its substance but of its timing. I'll give him the benefit of the doubt, that his mention of the fact that the Republicans have promised to spare "today's seniors" of any pain is an actual criticism, not a reminder to seniors who might be reading his column that they don't have to worry about voting for Romney.

But Douthat's highly informed voter, seeing the hollow man on one side of the scale - a position no Democrat has actually taken - weighed against the postponement of any action on the other side of the scale, might be wondering, "Why did Douthat present that hollow man argument in the first place, rather than presenting a simple, honest criticism of his own party. He knows I'm an informed and intelligent person - does he seriously think I'm going to fall for that?" I jest - I expect that by now the "high-information swing voters" to whom Douthat is supposedly speaking have long given up on the column.

Douthat next picks up his fiddle and starts singing about Rome:

If you want to think well of swing voters, and imagine them as wise Athenians rather than a Colosseum-going mob, you could see the improving odds for what once seemed like an unlikely 2012 outcome — a Romney victory in which Democrats hold the Senate — as a nod to the necessity for bipartisanship, and an attempt to make a significant change in Washington while also forcing both parties back to the negotiating table.

The highly informed swing voter, though, knows that the Republican problems with their Senate races emerge in no small part from the radicalism of some of their Senate candidates, and how their dream boys (like Scott Brown) haven't held up as well as they anticipated when running against competent, well-funded opponents. They know it has nothing to do with a fantasy that "bipartisanship" will magically start working just because one party controls the White House and the other controls the Senate.

Douthat's back to his historic practice, pretending to be a wise man, perched upon a fence, but unwilling to come down clearly on one side or the other. His highly informed voter long ago figured out the side upon which Douthat falls - why is he afraid of admitting it?