The Budget

Ezra Klein wroe 2012 Budget: Like the Fiscal Commission never happened "What was notable about the Fiscal Commission's final report was the way it opened up the playing field on the budget. It went after tax revenues, tax expenditures, the military, Social Security, Medicare, Medicaid, domestic spending, government reform and more. Most everyone disagreed with some of the specifics in the report, but plenty of folks on both sides of the aisle were happy to see so many cows demoted from sacred status...The president's 2012 budget dodges on almost all of that."

He also wrote The Defense Department won the future, or at least the budget "The military made out quite nicely in the 2012 budget proposal. The administration is cutting $78 billion from the Defense Department's budget -- known as 'security discretionary spending' -- over the next 10 years. That's a bit of a blow, but compare it to the $400 billion they're cutting from domestic discretionary spending -- that's education, income security, food safety, environmental protection, etc. -- over the next 10 years. And keep in mind that the domestic discretionary budget is only half as large as the military's budget. So if there were equal cuts, the military would be losing $800 billion"

But I think my favorite description of the budget is this, The U.S. Government: An insurance conglomerate protected by a large, standing army. "Two of every five dollars goes to Social Security, Medicare or Medicaid, all of which provide some form of insurance. A bit more than a buck goes to the military. Then there’s a $1.50 or so for assorted other programs -- education, infrastructure, environmental protection, farm subsidies, etc. Some of that, like unemployment checks and food stamps, is also best understood insurance spending. And then there’s another 40 cents of debt repayment. Calvin Coolidge once said that the business of America is business. Well, the business of the American government is insurance. Literally. If you look at how the federal government spends our money, it’s an insurance conglomerate protected by a large, standing army."



He goes on to say, "And it’s a bad place to focus cuts. Politicians don’t take the axe to non-defense discretionary spending because they think Teach for America or the food safety infrastructure -- both of which the Republicans are proposing to cut dramatically -- is more wasteful than the Pentagon or the health-care system. They do it because Teach for America and the food safety system is less politically powerful than the Pentagon or Medicare beneficiaries." Seriously read the rest of this post, it's all good.

Here's a detailed analysis of 2012 budget proposal, agency by agency. It's not short.

Robert Reich has a very good post, The Obama Budget: And Why the Coming Debate Over Spending Cuts Has Nothing to Do With Reviving the Economy. "Republicans want America to believe the economy is still lousy because government is too big, and the way to revive the economy is to cut federal spending...Today (Monday) Obama pours gas on the Republican flame by proposing a 2012 federal budget that cuts the federal deficit by $1.1 trillion over 10 years. About $400 billion of this will come from a five-year freeze on non-security discretionary spending – including all sorts of programs for poor and working-class Americans, such as heating assistance to low-income people and community-service block grants. Most of the rest from additional spending cuts, such as grants to states for water treatment plants and other environmental projects and higher interest charges on federal loans to graduate students."

Comparison to Clinton/Gingrich are wrong. "But the 1995 playbook is irrelevant. In 1995 the economy was roaring back to life. The recession of 1991 had been caused (as are most recessions) by the Fed raising interest rates too high to ward off inflation. So reversing course was relatively simple. Alan Greenspan and the Fed cut interest rates...The Republican bromide – cut federal spending – is precisely the wrong response to this ongoing crisis, which is more analogous to the Great Depression than to any recent recession. Herbert Hoover responded the same way between 1929 and 1932. Insufficient spending only deepened the Great Depression."

He goes on to propose tax changes to revive the economy. Put more money in the hands of the poor (expand the Earned Income Tax Credit" and change the tax brackets so the rich pay more and the poor pay less.

Krugman also agrees, Obama's budget is basically a Republican one, though only slightly better than the Republicans actual proposal. He also goes after some conventional wisdom. First, there's been no structural shift in unemployment. Second, we never tried a real stimulous. "Once you take state and local cutbacks into account, there was no surge of government spending. Here’s total (all levels) government spending over the past 10 years:"



Meanwhile, Boener's district will do okay, House Speaker’s State May Get $450 Million Extra.