Three. Trillion. Dollars.

From the Washington Post:

The expansive agenda President Bush laid out at the Republican National Convention was missing a price tag, but administration figures show the total is likely to be well in excess of $3 trillion over a decade.

....

Bush's pledge to make permanent his tax cuts, which are set to expire at the end of 2010 or before, would reduce government revenue by about $1 trillion over 10 years, according to administration estimates. His proposed changes in Social Security to allow younger workers to invest part of their payroll taxes in stocks and bonds could cost the government $2 trillion over the coming decade, according to the calculations of independent domestic policy experts.

And Bush's agenda has many costs the administration has not publicly estimated. For instance, Bush said in his speech that he would continue to try to stabilize Iraq and wage war on terrorism. The war in Iraq alone costs $4 billion a month, but the president's annual budget does not reflect that cost.

There are not enough symbols on the keypad (or on an IBM Selectric) to cover the curses I'd like to spout here. ($#[email protected]! %^&*! *(:"<>?*Y^!) The spending and entitlement increases proposed by Bush would make a Social Democrat blush -- and that's tough to do. As Professor Peter Z. Grossman, holder of the Efroymson Chair in Economics at Butler University, wrote today in my home-town paper:

To the extent there has been anything that might be called an economic policy under Bush, it can be summed up as follows: cut taxes, raise spending (on practically everything), get re-elected and let future administrations worry about the consequences.

I don't pretend that Kerry is much better. But, at least some (in this case, Fortune Magazine) allege that he's a "deficit hawk," and some analyses suggest that his economic plan will cost about one trillion less in future deficits. Perfect? No. Good? Not by a long shot. Better than Bush for the long-term financial health of the country?

Yes. I think you must conclude, yes. But I'll be reading what the folks at RedState.org have to say about it.

I'm assuming, by the way, that Bush's policies will indeed result in marginally better economic growth than Kerry's policies -- not that there's yet evidence to support the assumption. And, for those who wish to pass the evidence entirely and go straight to a Reagan-era "grow-your-way-outta-it" analogy, consider that Reagan was forced to increase taxes to pay for his spending and GHWB and Clinton were forced to raise taxes again to control the deficit. The bill, in other words, always comes due.

Comments

[Fabius]

Since 1960 Dem administrations have had better economic results in all measures. I don't think Bush's brand of crony capitalism is good for the economy or even good for capitalism. It is good for cronies, however.

[praktike]

Economic growth will be a mere memory unless we solve our health care and energy problems. They will choke us.

Do you believe Bush has a handle on this?

[sidereal]

"But I'll be reading what the folks at RedState.org have to say about it."

Eh, you'll have to go to Kos. RedState coverage of bad behavior on the part of allies (per harboring Cuban terrorists, Bush's budget management, Coburn [friend of RedState]'s sterilization 'controversy') has been rather lacking, at least on the frontpage (and it looks like the diary entries are all via seditious liberals and get no comments). Unfortunate, as I'd hoped to get the reasoned Republican response to these issues there, but the local reasoned Republican resposne is to ignore it.

Much the same at Kos for Democrats, I'm sure. Plenty of blinkers to go around.

[Slartibartfast]

The expansive agenda President Bush laid out at the Republican National Convention was missing a price tag, but administration figures show the total is likely to be well in excess of $3 trillion over a decade.

When's the last time you saw an accurate 10-year budget prediction? How about we discuss just four years?

And...let me get this straight: Kerry not planning to address Social Security during his term is supposed to be a good thing?

[Ken Houghton]

When is the last time a Bush budget was accurate by the end of the year in which it was applied? (Answer is probably 1991 or 1992.)

The Law of Unintended Consequences also applies. Remember, the Clinton administration would have loved to have "Marshall planned" Russia--but the Reagan spending meant the money needed them wasn't available.

So now, we have Mr. Putin on the verge of instituting his own martial plan. And who is going to bail out Bank of America this time?

[Slartibartfast]

And, just in case anyone's interested, I'm more than a bit peeved about the lack of fiscal responsibility on the part of the Bush administration. I'd even consider awarding him a penalty Porker of the Year, just to voice my displeasure. If that were within my ability, that is. Even so, the choice between fiscally horrible and maybe a wee bit more or less horrible isn't going to deciding factor for me.

And, after all, it's Congress that passes (or rejects, or simply amends) the budget. Don't like the excesses? Write your congressman. And while you're at it, pass on my displeasure at his approval on government subsidizing business with our tax dollars.

[Edward]

Kerry not planning to address Social Security during his term is supposed to be a good thing?

Where the hell'd you get that?

Kerry has said that the first step to addressing Social Security is the hard, old-fashioned step of restoring fiscal discipline. His Senate records should convince people that when he says "fiscal discipline" he means "fiscal discipline" as well.

Bush's magic beans stock market solution misses one important notion about Social Security...it's supposed to be SECURE. That means...not at risk just because Enron's officers decide they're gonna screw investors.

See here for more on Kerry's more rational approach.

[JKC]

"And while you're at it, pass on my displeasure at his approval on government subsidizing business with our tax dollars."

If you hadn't been hammered by two hurricanes, Slarti, I'd offer a good-natured tweak about defense contractors, and pots calling kettles black. But in respect to your ongoing clean-up efforts, I won't go there.

As for Bush, if he accomplishes nothing else, he may well destroy whatever reputation the GOP had left for fiscal prudence.

Blaming Congress is a bit too easy. (They deserve the blame, especially the more egregious porkers, but Bush is the one who insisted on tax cuts, rammed through the Medicare prescription drug benefit without any sort of cost controls, and continues to refuse to budget for Iraq.

[Slartibartfast]

Ken, IIRC the Clinton budget projections were wildly inaccurate at the 10-year point. Bush's budget projections could not have ever had any accuracy, unless you suppose you can budget warfare to the penny. And, yes, yes, I'll certainly bow to the point that the projections should have been more...conservative.

Edward:
Kerry's plan to save SS looks like a whole lot of motherhood and apple pie, which is all I'd expect from either candidate during an election year. Again, if he's all that concerned about saving Medicare and SS, he's had twenty years in Congress to have done something about it. Show us, John. Not what have you done for us lately, not what you did for us 35 years ago, but what have you built over the last two decades?

[sidereal]

"And, after all, it's Congress that passes (or rejects, or simply amends) the budget."

You mean the Congress controlled by the Republican party, by which I mean the party that the President is the head of?

Given the direction of my last few comments, I've decided today is Unofficial Carry Water for The Big Dog day, wherein we recognize how stellar a good President looks in comparison to a terrible one.

[Slartibartfast]

But in respect to your ongoing clean-up efforts, I won't go there.

Actually, as far as I personally am concerned, I'm getting exactly zilch. Those in Port Charlotte and Melbourne are the ones truly in need, although my neighbor got a new driveway and a lot of other stuff out of the mix, due in part to some willing contractors and a pliant insurance claim agent. I just can't bring myself to play that game. Sure, I've got to reroof and I'm out a couple of grand in tree surgery and a generator, but I can survive without government assistance. Others are less fortunate.

As for Bush, if he accomplishes nothing else, he may well destroy whatever reputation the GOP had left for fiscal prudence.

I agree with this, unless we see some dramatic turnaround in his second term.

[carsick]

One of those bumper sticker phrases that I actually believe:
Taxes Refunded are Taxes Deferred: Thanks Kids.

As you said von, "The bill, in other words, always comes due."

[Slartibartfast]

You mean the Congress controlled by the Republican party, by which I mean the party that the President is the head of?

Yes, that Congress. I'm beginning to wonder whether we couldn't summarily oust them, replacing them with a party balance of convicted felons, and come out way ahead in the deal.

[Edward]

Kerry's plan to save SS looks like a whole lot of motherhood and apple pie,

Bush's plan to save SS looks a whole lot like grandmothers who aren't wizards of Wall Street wishing they had apple pie, or any food for that matter.

[carsick]

"I'm beginning to wonder whether we couldn't summarily oust them, replacing them with a party balance of convicted felons, and come out way ahead in the deal."

Slarti,
You mean like Putin is in the process of doing and has done?

[sidereal]

My instinctual response is 'term limits, baby'. But term limits leads to greater politicking, and greater politicking probably leads to greater pork.

Very few politicians have the Coburnian balls to turn down federal disaster relief funds on principle, much less reject random highway improvement garbage.

Balanced budget amendment? Maybe if they knew the pork was coming from a finite supply, they'd compete with each other for it, rather than compete to see who can dream up the most.

[sidereal]

Hm. . Putin or Congress. . Putin or Congress.

These are dark times, if I have to make that pick.

[sidereal]

Or maybe (as long as I'm shotgunning comments, in honor of assault weapons) the solution is transparency. I'm constantly amazed by how much obscene crap goes on in the halls of Congress, simply because most Americans think it's boring and arcane and don't want to have anything to do with it. They're content to vote for the guys who promise most creatively to 'Clean up Washington', then tune out on the assumption that they'll surely do it, only to do it again 2 years later, never getting around to wondering why it didn't work last time.

[lightning]

The business of Social Security being in some sort of trouble is one of those memes that keep screeching in from the right wing, with no justification whatever. Unless the US economy tanks, it's good till 2020 at least. After that, we may have to (gasp!) raise the FICA income cap.

Basically, the Repubs want to get their hands on the SS funds, so they can divert them to a) making the deficit look smaller and b) fund their own stock market pump- n- dump schemes.

[carsick]

sidereal
As a former term limits supporter I learned from a dear friend (who was term limited out of my city's council and was the only one who actually understood the ins-and-outs of the budget) that institutional knowledge can have great value.

[Slartibartfast]

My instinctual response is 'term limits, baby'.

I actually think it's going to require reformation of government. Maybe by removing budgetary authority from Congress altogether, or at least placing constraints on said authority. Just because shrimp culture studies claim to be an important national interest doesn't mean they actually are.

[carsick]

lightening
Get ready for Sebastian to come after you on that one. We went a few rounds when I suggested the conservatives want to tie medicare/medicaid (not at all healthy) with SS ( more or less healthy enough that tweaking can keep it alive) so they can open SS for the funds ... then kill it.

[Slartibartfast]

with no justification whatever

Of course not. Not with the screeching, and all.

it's good till 2020 at least

Which means that it really doesn't need any attention until 2019, at least.

After that, we may have to (gasp!) raise the FICA income cap.

Seen any studies that say that even complete removal of the cap, this year, will postpone the collapse of SS even a little bit? Neither have I.

So much for nuance. Up until now, it was my impression that SS being in trouble was pretty much recognized by both sides of the aisle.

[Catsy]

And, after all, it's Congress that passes (or rejects, or simply amends) the budget. Don't like the excesses? Write your congressman. And while you're at it, pass on my displeasure at his approval on government subsidizing business with our tax dollars.

It's not that simple, Slart. Aside from what others have pointed out, you need to consider the track records of the candidates, and the effects of divided government.

Will Kerry want to spend any less than Bush? Maybe a little, and probably not enough to be a substantial difference. The substantial differences are two:

First, he's far, far more likely to exercise prudent fiscal discipline in the process of spending. When both candidates are likely to spend a lot of my money, I'll take the one who has, at worst, only his promise of fiscal responsibility, over a man who has a four-year proven track record of having none.

Second, even if you assume that Kerry and Bush will both exercise the /exact same/ levels of spending and discipline, a Kerry administration will be better simply because the Republican-controlled Congress will obstruct and restrain him as much as possible. This is as certain and predictable as the sun rising.

So if fiscal policy is important to you, you pretty much have two choices: elect Bush and a Democratic Congress, which is pretty much a no-go at this point... or leave Congress as is and kick Bush out in November.

[carsick]

For more on the subject of SS reform and its relative current health you can go here to read a Brookings Institute briefing.

[Thorley Winston]

From the WaPo:

The expansive agenda President Bush laid out at the Republican National Convention was missing a price tag, but administration figures show the total is likely to be well in excess of $3 trillion over a decade.

Note that nowhere in this misleading article does it state that Bush is planning an addition $3 Trillion in additional spending (unlike Kerry who wants an addition $2 Trillion in spending increases) but rather they are talking proposals to keep the funding that would otherwise go to the government in the hands of the taxpayer who paid it.

Bush's pledge to make permanent his tax cuts, which are set to expire at the end of 2010 or before, would reduce government revenue by about $1 trillion over 10 years,

Probably less than that when you consider the feedback effect and that the portion of the tax cuts that Bush wants to make permanent (and Kerry does not) is the portion most likely to lead to capital formation and long-term economic growth.

according to administration estimates. His proposed changes in Social Security to allow younger workers to invest part of their payroll taxes in stocks and bonds could cost the government $2 trillion over the coming decade, according to the calculations of independent domestic policy experts.

Whereas Kerry’s do nothing proposal would cost more than that since every worker is promised more on the aggregate than they “contribute” to the federal ponzai scheme. Letting workers opt out (even partially as Bush proposals) puts us money ahead because its cheaper to let a worker invest a portion of his or her FICA taxes in exchange for a reduced benefit than it is to take his or her dollar and promise to pay the worker more than that which s/he “contributed.”

By all means feel free to be upset that Bush has agreed to the current baseline in spending (you know the one that Kerry and Edwards voted for or higher) but Von should not try mislead his readers into thinking that the $3 Trillion figure represents “spending and entitlement increases proposed by Bush.” Kerry’s proposed $2 Trillion plus increase however does does however represent “spending and entitlement increases.”

[von]

Von should not try mislead his readers into thinking that the $3 Trillion figure represents “spending and entitlement increases proposed by Bush.”

Thorley --

1. I provided three full quotes of the WaPo article so the readership would not be mislead as to the make-up of the $3 trillion dollar figure. Really, you'll be much more effective as an antagonist if you cease peppering your remarks with accusations that your opponents are intentially "misleading" or otherwise wronging the readers. The readers can, after all, read.

2. I stand by my claim that Bush is spending (and proposes to continue to spend) like a social democrat. See, for example, the figures for discretionary spending over the last three-and-a-half years; see also the new entitlements and programs proposed by Bush in his speech at the RNC.

3. I'm well aware of the feedback effect of tax cuts, to which, you may note, I alluded in the final paragraph of my post.

4. Finally, putting Kerry's "plan" aside, is there any reason to believe that Bush's tax cuts are, in the main, merely tax deferments? If not, let us speak of these "cuts" as deferments -- and not pretend otherwise. (Just as we attack Kerry's funny numbers and overly hopeful programs.)

[von]

Rephrase #4 to:

4. Finally, putting Kerry's "plan" aside, is there any reason to believe that Bush's tax cuts are not, in the main, merely tax deferments? If not, let us speak of these "cuts" as deferments -- and not pretend otherwise. (Just as we attack Kerry's funny numbers and overly hopeful programs.)

[Edward]

Haven't you noticed yet, von, anyone who disagrees with Thorley is intentionally misleading the readers....oops, I'll bet he'll say I'm doing it with this statement.

[mac]

von,

Welcome to the ranks of the shrill....

[Bernard Yomtov]

the choice between fiscally horrible and maybe a wee bit more or less horrible

I think the gap is bigger than that. For example, Kerry wanted to rescind a part of the Bush tax cuts to pay the famous $87 billion for Iraq reconstruction. Bush wanted to run up the deficit some more.

The fact is we have fiscal problems. On the record, I don't think Bush is going to be willing to deal with them. I think Kerry will.

[Edward]

The fact is we have fiscal problems. On the record, I don't think Bush is going to be willing to deal with them. I think Kerry will.

Oh, I think they'll both deal with them. The question is how.

Bush has indicated he will make serious budget cuts. The richest Americans will just get richer and richer, and the poor will be told "there's just no money, but that's ok, if you were ever able to own something, this would be great for you."

Kerry has demonstrated throughout his career that he believes we're all in this together. That the have's don't need to perpetually fight to be the have more's when they clearly already have more than enough.

Some morality on the issue is sorely lacking in Bush's plan.

[Thorley Winston]

Von wrote:

I provided three full quotes of the WaPo article so the readership would not be mislead as to the make-up of the $3 trillion dollar figure.

That’s true, however Von later tried to characterize the WaPo article with:

The spending and entitlement increases proposed by Bush would make a Social Democrat blush -- and that's tough to do.

Which is a rather curious statement to make in a thread that otherwise has nothing to do with any increases in spending or entitlement programs being proposed by Bush or in the accompanying article. However Von tries to restate (clarify) his earlier claim with:

I stand by my claim that Bush is spending (and proposes to continue to spend) like a social democrat.

More like a restatement of his claim going from critiquing what Bush has proposed to past spending he agreed to (which is rather different than the topic of the article he linked to), but whatever.

See, for example, the figures for discretionary spending over the last three-and-a-half years;

Funny thing about that, prior to the Jeffords’ jump non-defense/homeland security discretionary spending was actually slowing in growth (about 5% IIRC) before we discovered the miracle of “divided government” in the form of a Democratic-controlled Senate (which bumped it up to about 12.3 percent) and since the mid-term elections it’s been steadily slowing as well (9.3 percent to 5.8 percent). If the trend continues (and barring more “divided government” nonsense or another major terrorist attack it should) than non-defense/non-homeland security discretionary spending should continue to slow as well.

see also the new entitlements and programs proposed by Bush in his speech at the RNC.

I’ve already looked at them and the spending increases proposed were pretty much petty ante stuff ($250 million a year for reading/math, $500 million for community colleges and job training, $1 Billion for CHIPs expansion, etc.) and more reminiscent of the “micro-proposals*” that Clinton used to include in his later SOTU addresses. Hardly the stuff of a “social Democrat” at least by anyone who actually understands the meaning of the term. Particularly compared to his opponent who wants to actually create a new entitlement at about $895 Billion under the guise of “health care” reform (more like a bailout of the insurance industry IMO).

The bulk of Bush’s proposals though are actually more conducive to limited to government in the form Social Security reform (the bulk of the supposed $3 Trillion figure), tax cuts, and health care reform through the expansion of health care savings accounts, small business risk pools, and (a personal favorite) allowing people to purchase health insurance across State lines.

Finally, putting Kerry's "plan" aside, is there any reason to believe that Bush's tax cuts are not, in the main, merely tax deferments?

There is no evidence to support the contention that the tax cuts are merely tax deferments.

Bottom line, both candidates agreed to a baseline that is too high (Kerry voted for it or higher and Bush signed it into law) and going forward we have Kerry proposing expanding federal spending by over $2 Trillion, with some tax increases, while Bush has proposed some penny ante stuff spending increases (and some spending cuts) in non-defense/non-homeland security discretionary spending, entitlement reform (which is far more important than discretionary spending particularly before the baby boom generation begins to retire and gets locked in), and tax cuts.

* It goes without saying that I prefer the days when Republicans wanted to eliminate the Departments of Education, Energy, and Commerce. However since that didn't work, I’m willing to accept penny ante stuff like CHIPS and community college spending as the price for larger items like entitlement and market-oriented health care reform.

[von]

Thorley --

That’s true, however Von later tried to characterize the WaPo article with:

Ahh. So I misled the readership by (allegedly) mischaracterizing three paragraphs I had just quoted with a sentence that -- by its own ordinary construction, both independently and in context -- could not be based solely upon the relevant three paragraphs. Well, then: That's only a slightly better fraud than the CBS memos. (Or maybe it's no fraud at all, because no one could possibly be misled. Nahh.....)

This evening I'll respond to the substance -- and there's quite a bit in the latter half of your second post; it may even require an update to the post. (I'm late for a call.)

von

[hilzoy]

Thorley -- I assume you know why the Post makes the claim that Bush's Social security "reform" will cost two trillion dollars. It's because you and I are now paying for the benefits received by the current generation of retirees, and is Social Security is altered to allow us to put money into our personal accounts, then either current retirees will suddenly find their benefits cut off, or the government is going to have to pay for them out of funds other than the payroll taxes that you and I will now be putting in our personal accounts instead of sending to the government. You and I will not have our taxes cut, in the usual sense (the one that involves being able to keep the money and spend it as we wish.) We will instead put it into our accounts. The government, meanwhile, will be out two trillion dollars, which it will have to find somewhere. Higher taxes are the option that leaps to mind, unless we want a fiscal collapse.

[hilzoy]

Also, Thorley, I looked at the link you provided, and they just list themselves as the source for Fig. 1, about levels of Defense + Homeland Security vs. other discretionary spending. I was interested because I wanted to see the methodology used to determine which non-defense spending from before the Dept. of Homeland Security was formed they were counting as 'Homeland Security'. Since, of course, that would affect the figures a lot. -- I mean, prior to Jeffords' defection there were no figures for "Homeland Security", as such, and the formation of a new department which took a lot of chunks out of existing non-defense departments might, in principle, make a difference. Do you know what their figures are based on?

[Bernard Yomtov]

There is no evidence to support the contention that the tax cuts are merely tax deferments.

You mean we don't have to pay back all that borrowed money (or keep paying interest, which comes to the same thing)?

[von]

Thorley --

On the substance of your comments, I'll have a new post tomorrow or Wednesday.