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Posted at 4:22 PM ET, 02/14/2011

Two budget dodges to watch for

By Ezra Klein

Listening to the rhetoric surrounding the various budgets of Republicans and Democrats, a few things stand out: Republicans keep conflating cutting spending with cutting deficits. And it sounds to me like Democrats are banking on the fact that the public is a bit fuzzy on the difference between cutting the deficit and cutting the debt.

Take John Boehner. "We're broke," he said on Sunday's Meet the Press. "When are we going to get serious about cutting spending?" To be "not broke," however, you need the amount of money you're making to match the amount of money you're spending. Republicans want to cut spending, but they want to cut revenues even more: Just today, Mike Pence and Jim DeMint introduced the "Tax Relief Certainty Act," which would make the Bush tax cuts permanent. That would cost trillions of dollars, and they offer no offsets. It'd all just go on the national credit card. If you cut spending by $2 trillion and cut revenues by $4 trillion, not only are you still broke, but you're actually more broken than you where when you started.

Democrats, meanwhile, are talking about cutting annual deficits, but they're not talking about cutting total debt. That distinction occasionally gets lost, I think. When Sherrod Brown says, "the President’s budget proposal will put us on track to cut the deficit in half in his first term," it sounds like he's talking about the debt we've accumulated, not merely the borrowing we're going to do that year. But getting deficits down to three percentage points of GDP in 2017 doesn't mean that's all we've borrowed, or are paying off. It means that's all we're borrowing in 2017. This isn't necessarily a case of intended misdirection -- the language here is a bit imprecise -- but there's a reason you're hearing a lot of deficit numbers and very few debt numbers from the administration.

By Ezra Klein  | February 14, 2011; 4:22 PM ET
Categories:  Budget  
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Next: Is the administration being too optimistic, cont'd


Good point! If one's revenues are (for example) only $8.00, one should spend only $7.99 or less. Even though that calculation ignores the need for rainy-day savings, it's at least enough discipline to avoid a coffer filled only with debt.

That part is easy: spend no more than you have. The fedgov could do that... but it might take a Balanced Budget Amendment to solidify the rule in the Congressional mind.

But, what if one's income is only $8.00, but one is optimistic: is it OK to have actual revenues of $8.00 -- with a hope of revenues of $1,000,000 -- and to spend the entire $1,000,008.00? Shouldn't that sort of foolish optimism be shunned? Isn't it impossible to "invest" the $1,000,000 one doesn't really have? What's actually being leveraged??

Posted by: rmgregory | February 14, 2011 4:55 PM | Report abuse

agreed. Republicans are 100% wrong on this point. The tax cuts shouldn't have been extended at the end of last year and they certainly shouldn't be extended (for anyone) come 2012.

Posted by: visionbrkr | February 14, 2011 5:03 PM | Report abuse

This may sound trite, but someday I hope Democrats become better at semantically countering these Republican actions. Dems should call them "bonuses" for the rich. Associate it with the publicly-disliked financial sector. The memorable "b" in "bonus" works well in alliteration, too, against "break" and "broke."

"They're bonuses for the rich, not tax breaks."
"We're broke, and the Republicans are handing out bonuses to their buddies."

They need to become better at controlling the conversation and the language used in national debates.

Posted by: jefftcarroll | February 14, 2011 5:27 PM | Report abuse

I thought everyone knew reducing taxes to 0% maximized revenues.

Posted by: will12 | February 14, 2011 5:33 PM | Report abuse

This feels like grading on a curve / false equivalence again. The Republicans are blatantly wrong on the math and the Democrats are taking a step in the right direction but not a big enough one and trying to maximize the positives. That's roughly the same. The administration statement is at least factually accurate.

Posted by: tgates573 | February 14, 2011 6:32 PM | Report abuse

But not only politicians and president are 'drunk' here to lie and misled us, what about Media?

Is WaPo going have the headline that Obama failed here (since he did not propose anything for entitlements)? Can you persuade your Reporting Department to read what you write on this blog and put the headline and report correctly?

Media is party to this circus. Look at Reuters's head line, NYT headline; all are wrong and misleading.

What has happened is in full sun light this President has joined the 'fiscal rape' of the country as undertaken by our Congress Members.

Obama has gone too cynical and literally 'anti national interests'. First he was wrong on Egypt. Now, with a budget with no true solution in the proposal he is simply enjoying the way Congress is taking us over the brink with all this 'wrong talk'. He is cynical because he thinks deterioration of America's Fiscal situation can continue for 2 years until he gets elected and meanwhile his political opponents would have to do 'tap dances' which he will enjoy watching.

Shame on Obama. With this budget he is qualifying himself to sit along with George Bush. He is now equally reckless.

Posted by: umesh409 | February 14, 2011 8:46 PM | Report abuse

It seems the talk regarding cuts leaves out the cost per month of two wars and the money we give to prop up foreign governments like Pakistan and a list of others.The recent problem with the Pentagon planes and all the costs to keep outside contractors in business. No has been transparent about what we are spending.
Instead,it is all about cutting education, social programs and this recent list of cuts to come.
Republicans unfortunately, have a new group they must apease. These Tea Party types that are all about running our government because they think it is all about taking over our government.
This taking back America is radical and they will do damage to the Republican party and it's image of conservatives.
I would bet there is no cuts with regards to these wars. This so called war on terriorism has been a total waste and has taken vast sums and increased our national debt. What have we learned? Nothing. Iraq will no doubt just return to it's ways.
Terrorist live amoung us. With all the money spent we could just continue our monitoring of suspects and work internationally.
If we continue with our failed wars we will be in India and beyond, until our forces are spread thin.
I realize there is big money in war and people have forgotten where we got the money to keep these wars going, China.
When I look at the money being spent on the Arizona Border I wonder how they manage to have money for that when Arizona is cutting Health care for the poor, closing schools and too numerous too mention. The AZ border has so many agencies, they never had before and we still can not do what needs to be done.
I believe it is all about money as usual and the Present governor is having no problem spending money she doesn't have.
Arizona, has placed cameras on every intersection to raise money, while paying contractors to place and maintain.
Arizona. More spending money the state does not have. For both Federal and State it is all about priorities.

Posted by: crich520 | February 14, 2011 8:56 PM | Report abuse

All the recent talk about guns has started a debate. Here in Arizona there is a return to the wild west.
More and more people are seen with a belt holding a cell phone and a gun. Bad for Tourism...
I was thinking that if police cannot arrive at a scene in time how will they figure out who the gunman is?
What if a gun owner decides he must shoot to kill, the shooter.
What if more then one person draws his or her guns at a scene.
This could become a real problem.
In the shootout on Jan 8th.
The gunman was taken down without a gun. He was wrestled to the ground.
I think if someone was breaking in someone's house they have a right to defend the home, but these new Arizona laws have created more problems for the police.
Have we become citizens that will take the law into our own hands? Or has our governor and this legislature gone too far, to support gun lobbyist? I would bet there is some big donations for the upcoming elections behind all this.

Posted by: crich520 | February 14, 2011 9:12 PM | Report abuse

Ezra: Keep at this. It is a two party mess and you are starting to focus on the pathetic talking points of both. Good job today.

Posted by: Gooddogs | February 14, 2011 9:27 PM | Report abuse

Budget balancing strategies that focus on large cuts in federal spending translate directly into cutting jobs. Each $ of spending cuts includes someone’s job and benefits. Which jobs will be lost as a result of the Tea Party deficit hawks austerity measures?

Could it be yours? You can bet that the jobs lost will primarily come from the middle and lower-middle class.

People who lose their jobs as a result of budget cuts will be forced to reduce their spending. The resulting overall decrease in spending in our economy spirals down to impact other businesses whose goods and services are no longer affordable for the unemployed, creating more layoffs and more unemployed.

Each newly unemployed worker stops paying taxes to local, state, and the federal government, INCREASING the DEFICIT at all levels. This ultimately requires either state and local tax increases, or layoffs of more workers, or both.

Each newly unemployed worker collects unemployment and other benefits from the federal, state, and local governments, further INCREASING the DEFICIT at all levels that leads to more layoffs to reduce private sector costs. The result is decreased tax and sales revenues and increased costs to government at all levels, not to mention the human costs to the average American families. Cutting the deficit by significant budget cuts in the short run makes the deficit WORSE, not better, and risks the continuation of the recession.

Check the recent results for austerity strategies in UK and Ireland to get direct evidence that austerity measures don’t work during recessions.—save big cuts for when the economy has recovered to full growth and can withstand the shock.

Posted by: CJfromPA | February 15, 2011 2:15 PM | Report abuse

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