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A progressive budget calculator

Not to be outdone by the Committee for a Responsible Federal Deficit, the Center for Economic Policy Research has a new budget calculator out that lets you put more liberal policies into play and see what happens to the debt level in 2020. I got us below 60 percent (the magic number, at least according to some budget hawks) by ending the wars in Iraq and Afghanistan, creating a Medicare-like public option, adding a modest carbon tax, adding a financial transactions tax, allowing Medicare to negotiate drug prices, increasing the cap on taxable earnings for Social Security, converting the mortgage-interest deduction to a 15 percent credit, and letting the estate tax return on schedule.

Oh, and I did all this while adding $2.1 trillion in infrastructure, R&D, and education spending, and increasing the generosity of Social Security benefits. I am a budget genius!

By Ezra Klein  |  June 29, 2010; 1:23 PM ET
Categories:  Budget  
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Comments

Just send it to your Congressman. It should get passed in a week.

Posted by: DDAWD | June 29, 2010 1:48 PM | Report abuse

"I am a budget genius!"

So is Hugo Chavez. And Cuba. You should check them out. Utopias. Seriously.

And what if in creating the Medicare-like public option, you had to make a deal that slashed taxes for people making less than $250k per year? Or abolished the inheritance tax? What if in coming up with the carbon tax, a few hundred billion in energy revenues were moved offshore, and 50 billion worth of low margin businesses were put out of business by the higher energy costs?

Not saying any of that would or wouldn't happen, but any budget calculator can't really score the economic dynamics of certain policies. Tax cuts and hikes effect what people do with their money, and the overall growth of the economy, and you have to make assumptions about those things. Or pretend everything is static, and then it's easy to balance the budget.

I got us down to 41%, while keeping all the Bush tax cuts. Booyah!

Posted by: Kevin_Willis | June 29, 2010 1:51 PM | Report abuse

"...by ending the wars in Iraq and Afghanistan..."

I am all for seeing both wars come to an end, but I wonder how you did the calculation.

Obviously even if we decide to completely withdraw from both countries, there will still be signicant spending for some time associated with the inherent costs of removing and repositioning troops and equipment from two very distant countries.

Although cheaper than keeping up the fight, that still must be an expensive exercise in each case.

Posted by: Patrick_M | June 29, 2010 2:02 PM | Report abuse

Bravo! Ezra for President, Senate Majority Leader, and Speaker of the House!

Oh wait! You're too d_mn young to qualify, right!

Posted by: exgovgirl | June 29, 2010 2:23 PM | Report abuse

Not to demote you from genius status, but balancing the budget is easy. I did it 4 different ways with the web site.

Balancing the budget: simple task.
Getting 60 senators to balance the budget: Impossible task

Posted by: pundit115 | June 29, 2010 3:00 PM | Report abuse

I clicked on every option and got the debt to GDP ratio down to 15% by 2020. Boo-yah!

Posted by: justin84 | June 29, 2010 3:47 PM | Report abuse

Again the choices are far too limited. No possibility for a revenue tariff, no financial transaction tax, no return to a strongly progressive high upper tax rate.

At least put in a Tariff of 10% across the board and see what it gives. and add back the old 95% tax schema.

Posted by: ceflynline | June 29, 2010 4:42 PM | Report abuse

pundit115, one of Ezra recurring themes is that it's not that we don't have a variety of possible answers for most of the major problems facing the country today. The problem is that we've got a system of government and Senate rules which encourage a minority party to obstruct the majority party's agenda, even if that means that we don't ever address the major problems we're facing. We've also got procedural rules that let the minority party do just that.

Posted by: MosBen | June 29, 2010 5:16 PM | Report abuse

Ezra,
In all seriousness, I think this is the germ of your next big journalism campaign, now that the 2010 legislative calendar is winding down and the elections are starting up.

The 10 budget points that you cite, plus the abolition of holds and filibusters, makes for an easy-to-memorize checklist that I would like to see every candidate for Congress and Senate respond to.

Posted by: tomveiltomveil | June 29, 2010 5:19 PM | Report abuse

"converting the mortgage-interest deduction to a 15 percent credit"

There should be a choice to get rid of it entirely. There is no reason for taxpayers to subsidize someone who can afford a $1 million mortgage at all. If we think home ownership is a good thing, there are far more narrow ways to achieve that policy result.

Sure, I know it's pie in the sky. But so is the calculator's 50 cent gas tax increase. It makes tons of policy sense (there's even support among principled conservatives for this one), but the probability of enactment is slim to none, and slim just left town.

I like the other budget simulator more since it offers a greater variety of options. http://crfb.org/stabilizethedebt/ But it would be nice if either of them had the opportunity to play with more numbers, such as the size of a gas tax or the degree of the mortgage interest deduction.

Posted by: dasimon | June 29, 2010 5:26 PM | Report abuse

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