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Matt Miller savages the deficit commission

Matt Miller is about as credentialed a deficit hawk as has ever walked the earth, so when he delivers this hard a blow to the fiscal commission, it's worth paying attention:

I don't want to overreact. I'd hate to prematurely diss President Obama's National Commission on Fiscal Responsibility and Reform, which held its fourth public meeting Wednesday. But the commission's Democratic co-chair, Erskine Bowles, may have already blown it.

In little-noticed remarks a few weeks ago, Bowles suggested that the long-term goal the commission should adopt for federal spending should be 21 percent of gross domestic product. This sounds like a bookkeeping matter. But Bowles' goal would end progressive ambition, ratify America's declining competitiveness and bury the American dream.

Why? For starters, federal spending under Ronald Reagan averaged 22 percent of GDP. Under Bowles's view, therefore, the outer limits of the Democratic Party's 21st-century aspirations would be to run government at a size smaller than did a 20th-century conservative icon.

As a general point, these sorts of number games are silly. America spent about 15 percent of GDP on health care last year. That includes both private and public spending. But let's say we brought spending down to Canadian levels -- 10 percent of GDP, no one uninsured -- by adopting a national health-care system. That might make federal spending as a percentage of GDP go up. But we'd be saving a ton of money, as the private sector would now have about five percent of GDP that it could invest productively rather than sinking into our insanely expensive medical complex.

By By Ezra Klein  |  July 29, 2010; 10:25 AM ET
 
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Comments

Using the Reagan years as a standard is silly. Ronald Reagan achieved the highest level of Federal peacetime spending as a percentage of GDP ever seen before or since. Reagan was a conservative only at the rhetorical level--oh yeah, and that all his policies favored the interests of a very small group of very rich people. Oh, also forgot, he quadrupled the national debt (have to include the Bush I years). Twenty one percent of GDP would be above the post WWII average.
Given the aging population and the increases in entitlements, spending will have to go up, but 21% is above the average historical range.

Posted by: rawebb1 | July 29, 2010 10:45 AM | Report abuse

Medical math wisdom from the journolist.

Every day the WaPo continues to publish this garbage, the credibility of the entire paper decreases.

Posted by: TECWRITE | July 29, 2010 11:17 AM | Report abuse

" America spent about 15 percent of GDP on health care last year.... But let's say we brought spending down to Canadian levels -- 10 percent of GDP, no one uninsured -- by adopting a national health-care system.... we'd be saving a ton of money ..."

You really believe that we could cut health care costs by a third, without massive impacts on quality? Even if it were possible to start from scratch, this proposition would be remarkably dubious, but more to the point - we can't get there from here. Have you never heard of path dependence?

Posted by: ostap666 | July 29, 2010 12:39 PM | Report abuse

"But Bowles' goal would end progressive ambition"

Quite possibly a feature, rather than a bug.

"Ratify America's declining competitiveness and bury the American dream."

How? How does the federal government 'only' spending 21% of GDP bury the American dream or harm competitiveness?

Government spending in Singapore is only 16.7% of GDP, and Singpore is a richer country than the U.S.

http://www.mof.gov.sg/budget_2010/revenue_expenditure/attachment/2%20Fiscal%20Outlook%20For%20Financial%20Year%202010.pdf

http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_per_capita

"Why? For starters, federal spending under Ronald Reagan averaged 22 percent of GDP. Under Bowles's view, therefore, the outer limits of the Democratic Party's 21st-century aspirations would be to run government at a size smaller than did a 20th-century conservative icon."

To be fair, Reagan spent about 6% of GDP on the military, whereas the Democratic party probably prefers something like 3%. So outside of military spending, the comparison is 18% of GDP compared to 16% under Reagan, or 15% ex-military under Clinton. In any case, as rawebb1 noted, federal spending under Reagan was historically high.

Posted by: justin84 | July 29, 2010 1:04 PM | Report abuse

Size of government is a Grover-Norquist canard. This should be about deficits and debt, over the long term, period.

Posted by: neversaylie | July 29, 2010 3:09 PM | Report abuse

Is he saying that Democrats won't put up with a smaller government?

Posted by: staticvars | July 29, 2010 4:35 PM | Report abuse

I'm hoping (hopefully not in vain) that it's a dream that the deficit commission will

-- do what the Prez has not yet done, and identify ineffective programs (or parts of programs) -- including deductions and tax credits -- and recommend the revamping or elimination of these programs.

E.g., end doles (big $s now) to industrial farms, the purchase of military weapons (costly) that are not needed or are unwanted; and ending the bloated high command load in the Pentagon -- more Admirals (each with an expensive staff) than ships in the fleet.
Talk about military welfare.

-- Recommend big cost saving changes like a national health care plan

But also that needed programs, like for education, be reshaped based on research (a scientific evidence base) with implementation faithful to the scientific findings. For example, NIH research (see Hart and Risley, Meaningful Differences) has found that early intervention (8 mos. to 3 years, 20 hrs/ wk home visitng to develop vocabulary -- correlates more than .9 with vverbal IQ)) for disadvantaged children can bring them on average in the educational main stream: at grade 4, IQs of 100 and achievement at grade level. Broadly implemented, this would enable millions to have the capacity to do well for themselves and, in international competition, for our country to do well, too, and also would enable a slashing of later intervention programs that usually produce, at best, modest effects, and these short-lived.
Or: the NIH research that has enabled highly effective interventions for serious violent delinquents (existing interventions, when evaluated, usually have no OR NEGATIVE EFFECTS). These evidence-based programs have large economic benefits to cost ratios for only the delinquency; add the reduced teen parenting, and the economic benefits really soar. Think of the enormous "justice system" savings and in community safety -- and in enabling youth to realize positive potentials from using evidence-based and effective programs.

Posted by: jimb | July 31, 2010 12:38 PM | Report abuse

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