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Posted at 6:39 AM ET, 02/14/2011

Wonkbook: Budget, budget, budget!

By Ezra Klein

Happy Valentine's Day, Wonkbook readers: I know you said not to get you anything this year, but I saw the president's 2012 budget coming out and, well, I couldn't resist. Head here at 10:30AM EST to download it. You're welcome.

The budget -- which proposes to spend $3.73-trillion in 2012 -- includes $1.1 trillion in deficit reduction over the next 10 years. Two-thirds of that comes from spending cuts, with the largest chunk the administration's proposed five-year freeze of non-security discretionary spending. The final third comes in tax increases. If all goes well, that'll take the deficit down from the 10.9 percent of GDP we're projecting for 2011 to 3% of GDP in 2017 -- a much more manageable level. Entitlements, tax expenditures, and other traditionally toxic parts of the federal budget are not being addressed. The final document bears very little resemblance to the report produced by the president's fiscal commission.

One thing to note: The document assumes that the high-income tax cuts expire in 2012, as they're currently projected to do. The administration isn't counting that in their $1.1 trillion of deficit reduction, but if the prediction is wrong and the Bush cuts do get another extension, they'll wipe out most of this budget's savings in one fell swoop. Conversely, if we decided to get serious about the deficit and let all of the Bush tax cuts expire in 2012 -- yes, including the cuts for the not-so-rich -- the reduction in the deficit would be vastly larger than anything envisioned in this budget. It's an odd turn of events, but for all that this budget, and the various Republican proposals, attempt to actually do for the deficit, the biggest single thing we could do would be to do, well, nothing: Let the Bush tax cuts expire and let the health-reform law and the associated Medicare cuts and excise tax get implemented as planned. Doing by not doing: That's the zen of deficit reduction. Somehow, I doubt Washington will find it very calming.

Top Stories

President Obama's latest budget will be announced today at 10:30AM EST, here: http://bit.ly/aEariq

Obama will propose over $1 trillion in budget cuts, report Shailagh Murray and Lori Montgomery: "President Obama will respond to a Republican push for a drastic reduction in government spending by proposing sharp cuts of his own in a fiscal 2012 budget blueprint that aims to trim record federal deficits by $1.1 trillion over the next decade. Obama would reach his target in part by raising taxes, an idea that Republicans refuse to consider. But two-thirds of the savings would come from spending cuts that are draconian by Democratic standards and take aim at liberal priorities, such as a popular low-income heating assistance program and community development block grants. Obama also targets the Pentagon, traditionally considered untouchable by both parties, by adopting $78 billion in savings proposed by Defense Secretary Robert M. Gates."

Watch OMB director Jack Lew explain how the budget will cut the deficit: http://bit.ly/g7RS88

The budget will avoid cuts in tax expenditures and entitlements, reports Lori Montgomery: "President Obama drew fire Sunday from congressional Republicans and independent budget experts for his reluctance to advance a plan that would tackle the nation's biggest budget problems in the spending blueprint he will submit to Congress on Monday. In the first statement of his budget priorities since Republicans regained control of the House, Obama will avoid politically dangerous recommendations to wipe out cherished tax breaks and to restrain safety-net programs for the elderly, put forward last year by his own bipartisan fiscal commission as a strategy for reining in a soaring national debt. White House budget director Jacob J. Lew has told advocates of reform that the White House thinks any significant plan offered by the president would simply become a target for partisan attack."

Ed O'Keefe highlights a few expected spending cuts and hikes: http://wapo.st/eridbV

House Republicans are already skeptical: http://bit.ly/grIH2D

The budget's contents are predictable and lamentable, writes Jonathan Cohn: "Between the administration's recent statements and a series of calculated leaks, we have a pretty good idea of what Obama is trying to do. He’s going to call for spending more money on education and other public investments, but he’ll also endorse enough cuts to keep overall non-defense discretionary spending at last year’s levels. Elementary and secondary school education, for example, should get a boost. But Pell Grants, for low-income college students, are going to take a hit, albeit a carefully crafted one...Is this a good thing? In absolute terms, clearly, the answer is no. The demand for Pell Grants is unusually high right now; among other things, cash-strapped states are raising tuitions at state schools just as cash-strapped students and families have fewer resources to pay them."

The administration's budget expresses a vision for the role of government, writes E.J. Dionne: http://wapo.st/ema50T

The budget's $1 trillion in cuts will not go far enough, writes Andrew Stiles: "The final recommendations of the president’s own bipartisan deficit commission included some $4 trillion in deficit reduction measures over the next decade by putting everything, including entitlements, on the chopping block. Needless to say, Obama has set a low bar for House Budget Committee Chairman Paul Ryan (R., Wis.) as he crafts the GOP’s budgetary rebuttal. Ryan has scheduled a series of hearings next week to review the president’s budget and hear testimony from OMB Director Jacob Lew and Treasury Secretary Tim Geithner. Expect a thorough grilling, in particular as to why the White House refused to touch entitlements."

Obama is still not committed to cutting the size of government, writes Daniel Mitchell: http://bit.ly/fYxYRz

R&B cover interlude: Bonnie "Prince" Billy plays "The World's Greatest" by R. Kelly.

Got tips, additions, or comments? E-mail me.

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Still to come: The House GOP wants to block the Build America Bonds program; Paul Krugman proposes the slogan "Eat the Future"; the GOP spending request aims to defund health care reform; neither party in Congress has much interest in bailing out state governments; Obama's budget will include support for small nuclear reactors; and DisneyWorld's "Hall of Presidents" gets a few names wrong.


Economy

The House GOP seeks to block the renewal of Build America Bonds, reports Andrew Ackerman: "Key Republicans signaled they would block renewal of the Build America Bonds program as the Obama administration prepared to reinstate the bonds in the 2012 budget plan due Monday. Build America Bonds were originally introduced as part of the $787 stimulus program in 2009 but expired at the end of last year. They allowed states and localities to sell taxable bonds and receive a federal subsidy payment from the Internal Revenue Service equal to 35% of the interest costs on their bonds. But Sen. Orrin Hatch (R., Utah), the ranking Republican on the Senate Finance Committee, said late Friday that BABs were 'simply a disguised state bailout.'...The Obama administration will propose reintroducing BABs, according to three people outside the administration who were briefed on the matter."

Interest payments on government debt are set to triple, report Daniel Kruger and Liz Capo McCormick: "nterest expense will rise to 3.1 percent of gross domestic product by 2016, from 1.3 percent in 2010 with the government forecast to run cumulative deficits of more than $4 trillion through the end of 2015...While some of the lowest borrowing costs on record have helped the economy recover from its worst financial crisis since the Great Depression, bond yields are now rising as growth resumes. Net interest expense will triple to an all-time high of $554 billion in 2015 from $185 billion in 2010, according to the Obama administration’s adjusted 2011 budget." http://bit.ly/hsRzhX

Obama could seek a "grand bargain" with Republicans on spending, writes Elizabeth Drew: "Despite all the confrontational rhetoric between the two parties about budget priorities, the White House and Republican congressional leaders, in private talks, have agreed on the need to try to reach a bipartisan 'grand bargain' over the budget--a sweeping deal that could include entitlements and tax reforms as well as budget reduction. A Senate Republican leadership aide confirmed this, saying, 'In fact, for anything to happen, it will require such a White House/congressional leadership bargain.' The preferred idea is that, just as they did late last year on the tax bill, they would reach an agreement and then unveil it to the public."

Emerging countries are potential partners, not rivals, writes Greg Mankiw: http://nyti.ms/gfUtrk

The GOP budget request is unserious and inhumane, writes Paul Krugman: "The new House majority promised to deliver $100 billion in spending cuts -- and its members face the prospect of Tea Party primary challenges if they fail to deliver big cuts. Yet the public opposes cuts in programs it likes -- and it likes almost everything. What’s a politician to do? The answer, once you think about it, is obvious: sacrifice the future. Focus the cuts on programs whose benefits aren’t immediate...There will be a huge price to pay, eventually -- but for now, you can keep the base happy. If you didn’t understand that logic, you might be puzzled by many items in the House G.O.P. proposal. Why cut a billion dollars from a highly successful program that provides supplemental nutrition to pregnant mothers, infants, and young children?"

It's make-or-break time for American manufacturing, writes Steven Pearlstein: "Although the threat here may be from China, our model ought to be Germany - another high-wage economy that over the past decade has restored its competitiveness by achieving the lower unit labor cost in Europe. How did they do it? Certainly not by slashing government or pulling back on government investments and incentives or shying away from regulations that stimulate demand for cutting-edge technologies, as tea party Republicans are determined to do. Some will point to modest tax cuts and reforms of labor laws that allowed all firms to lower costs and encouraged investment. But perhaps the more important changes were hammered out firm by firm between workers and the midsize firms that comprise the backbone of Germany's manufacturing sector. Workers agreed to work longer hours for slightly less pay under less-restrictive work rules. And because most of those firms remain family owned, the executives who run them were willing to forego big salaries and short-term profit and invest in their long-term futures."

Public stock markets are failing to serve the public, writes Felix Salmon: "The glory days of publicly traded companies dominating the American business landscape may be over. The number of companies listed on the major domestic exchanges peaked in 1997 at more than 7,000, and it has been falling ever since. It’s now down to about 4,000 companies, and given its steep downward trend will surely continue to shrink. Nor are the remaining stocks an obvious proxy for the health of the American economy. Innovative American companies like Apple and Google may be worth hundreds of billions of dollars, but most of them don’t pay dividends or employ many Americans, and their shares are essentially speculative investments for people making a bet on how we’re going to live in the future...What the market is not doing so well is its core public function: allocating capital efficiently."

Adorable animals slobbering interlude: A bulldog dream-eats.

Health Care

The GOP spending request includes cuts meant to bar implementation of health care reform, reports David Nather: "The House Republican spending bill to fund the government for the rest of the year would bar funding for the director of the White House Office of Health Reform and for enforcement of the 1099 reporting requirement that Congress is already trying to repeal. It also ratchets back funding for preventive services under the new Prevention and Public Health Fund, community health centers, and National Health Service Corps to 2008 levels -- wiping out any increases provided under the health care law. The spending measure cuts $360 million from the Centers for Medicare and Medicaid Services, under a program management account that mainly pays for Medicare operations, and $65 million from the Administration on Aging."

Health care reform lawsuits should lead us to limit judicial review, writes Christopher Jon Sprigman: "Because we're determined to run a post-industrial democracy by reference to a vague, terse, pre-industrial Constitution, we get judicial opinions that read like political arguments. We can't cure this by resorting to 'apolitical' judicial methodologies, like originalism, that are touted as constraining judicial discretion. They don't constrain it; they obscure it. Nor can we cure the problem by appointing only 'apolitical' judges who 'apply the law.' We might as well try to appoint a unicorn, because neither creature exists. Failing a wholesale renovation of our Constitution, the only cure is less judicial review. Judges must be made to understand that there is a difference between a plausible constitutional argument and a compelling one. And unless the constitutional argument against health care reform is compelling, judges should step away and let the political debate unfold."

\\Justices John Roberts and Samuel Alito aren't certain to rule against health care reform, reports Robert Barnes: "Some of those who watch the court most closely say it might actually be a little different this time. They believe the court's four liberals...have little trouble accepting that Congress has the power to mandate that individuals either secure health insurance for themselves or pay a fine. They think there is more play among some of the court's most consistent conservatives, most particularly Chief Justice John G. Roberts Jr. and Justice Samuel A. Alito Jr... The chief justice, in U.S. v. Comstock , agreed that the Necessary and Proper Clause gave the government the right to to detain sexually dangerous federal prisoners even after their sentences were completed, although even the power to imprison is not explicit in the Constitution."

Supreme Court justices have always played politics, writes Noah Feldman: http://nyti.ms/fgRbdT

Idaho's attempt to nullify health care reform could kill its Medicaid program, writes Ian Millhiser: http://bit.ly/e2Ke71

Domestic Policy

Both parties in Congress are wary of state bailouts, reports Alan Fram: "The new Republican-led House is showing no appetite for making federal taxpayers help state and local governments cope with widespread budget problems. Even some Democrats are wary, underscoring the impact of Washington's crushing budget deficits. 'The era of the bailout is over,' Rep. Patrick McHenry, R-N.C., told a House hearing on the debt problems facing scores of states and municipalities around the country. At the same hearing, Rep. Mike Quigley, D-Ill., said states need to erase their deficits and face up to their long-term obligations such as pensions for government workers on their own. He also criticized a proposal from some conservatives that Congress pass a law allowing states to reorganize their debts by declaring bankruptcy, an idea that opponents say would send state borrowing costs soaring."

Arizona's immigration lawsuit is a countersuit against the administration's suit targeting its immigration enforcement law: http://wapo.st/fAp23P

Great moments in history education interlude: DisneyWorld should really check the presidents' names in the Hall of Presidents.

Energy

Obama's budget includes support for small nuclear reactors, reports Matthew Wald: "The Obama administration’s 2012 budget proposal will include a request for money to help develop small 'modular' reactors that would be owned by a utility and would supply electricity to a government lab, people involved in the effort say. The department is hoping for $500 million over five years, half of the estimated cost to complete two designs and secure the Nuclear Regulatory Commission’s approval. The reactors would be built almost entirely in a factory and trucked to a site like modular homes. In promoting the reactor, the administration’s immediate goal is to help the Energy Department meet a federal target for reducing its carbon dioxide emissions by relying more on clean energy and less on gas and coal."

The budget will also cut subsidies to oil companies: http://bit.ly/gtySDA

The Republican budget proposal seeks to defund EPA climate efforts, report Robin Bravender, Patrick Reis, and Dan Berman: "House Republicans threw down the gauntlet at the Obama administration's energy and environmental agenda Friday night, proposing to defund the White House energy adviser's office and block EPA from regulating greenhouse gas emissions. In addition to slashing the Environmental Protection Agency’s budget by $3 billion - nearly twice as much as they originally proposed - GOP lawmakers included language in the continuing resolution to strip the agency of its ability to implement climate change rules. And despite the fact that Obama's energy and climate adviser Carol Browner is leaving the administration, the bill would defund the post of 'Assistant to the President for Energy and Climate Change, or any substantially similar position.'"

High-speed rail investment is just wasteful spending, writes Robert Samuelson: "Despite the subsidies, Amtrak does not provide low-cost transportation. Longtime critic Randal O'Toole of the Cato Institute recently planned a trip from Washington to New York. Noting that fares on Amtrak's high-speed Acela start at $139 one-way, he decided to take a private bus service. The roundtrip fare: $21.50. Nor does Amtrak do much to relieve congestion, cut oil use, reduce pollution or eliminate greenhouse gases. Its traffic volumes are simply too small to matter... High-speed rail would transform Amtrak's small drain into a much larger drain. Once built, high-speed-rail systems would face a dilemma. To recoup initial capital costs - construction and train purchases - ticket prices would have to be set so high that few people would choose rail."

Closing credits: Wonkbook is compiled and produced with help from Dylan Matthews and Michelle Williams.

By Ezra Klein  | February 14, 2011; 6:39 AM ET
Categories:  Wonkbook  
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Next: 2012 budget: Got to admit that things are getting better

Comments

The fact that neither Obama nor the GOP want to end our wars and close our wasteful foreign bases, and cut DoD spending in half, means they are not serious about deficit control.

The fact the GOP is not embracing entitlement "reform", and instead entertains fantasies of significant cuts and/or privatization of SS and medicare and repeal of ACA means they are not serious about deficit control.

The fact the GOP refuses to consider raising high end taxes means they are not serious about deficit control.

The fact the GOP refuses to end oil subsidies and instead embraces only drill baby drill means they are not interested in deficit control or saving us from future oil shocks.

The fact no one wants to control health costs more stringently means no one is serious about deficit control.

Whether you support the current plans by either Obama or the GOP, you support trillion+ deficits for the foreseeable future (decade or so)

The only elected people today who have plans that could actually balance the budget in our lifetimes are people LIKE Dennis Kucinich or Ron Paul. (I pick two to be pithy).

So, you take your pick which version of society you want:

1) A society that crashes under its own weight (Obama, or the mainstream GOP).

2) A libertarian society with a balanced budget, no fed, no foreign wars, no gvmt oversight over powerful business interests, and no entitlements, where you are free to be rich or poor based on your own entrepenurial skills (Ron Paul model)

3) A society with a balanced budget, small DoD, robust SS and medicare for all, and stable jobs as free trade is reversed, manufacturing is increased, and corporate personhood is abated (Kucinich model)

I choose option 3.

Posted by: lauren2010 | February 14, 2011 7:55 AM | Report abuse

Forgot to add, option 2 has low or no taxes, option 3 has a robust progressive tax system with highest bracket perhaps over 50%.

Posted by: lauren2010 | February 14, 2011 7:57 AM | Report abuse

That high speed rail piece has a *lot* of assumptions...

Posted by: MosBen | February 14, 2011 8:04 AM | Report abuse

The only way high speed rail makes sense is if we a) institute a hefty carbon tax, and b) don't create a network of charging stations for electric cars.

I prefer a carbon tax coupled with a program to create a national network of charging stations and/or standardized battery pack swapping for electric cars.

Posted by: lauren2010 | February 14, 2011 8:04 AM | Report abuse

"the biggest single thing we could do would be to do, well, nothing"

This is ridiculous. It's like saying if we do, well, nothing, the planet will warm up.

Posted by: DavidinCambridge | February 14, 2011 8:38 AM | Report abuse

I look forward to President Obama's "Raise taxes and slash Medicare" reelection campaign...

Please get serious, Klein.

Posted by: getjiggly2 | February 14, 2011 8:45 AM | Report abuse

I'd like to see charts showing doing nothing is better than either Obama's or the GOP's plans.

Posted by: lauren2010 | February 14, 2011 8:51 AM | Report abuse

If Obama was serious he would start by slashing education and health care spending.

That would require leadership.

Posted by: krazen1211 | February 14, 2011 8:53 AM | Report abuse

If Obama was serious he would start by slashing education and health care spending.

That would require leadership.

Posted by: krazen1211 | February 14, 2011 8:54 AM | Report abuse

Krugman is as usual being dishonest!

"Pew also asked people how they would like to see states close their budget deficits. Do they favor cuts in either education or health care, the main expenses states face? No"


The people might or might not favor cuts in education services. But as Krugman's neighboring town of Trenton CLEARLY proves, there is no particular correlation between education spending and education achievement.

Posted by: krazen1211 | February 14, 2011 8:58 AM | Report abuse

krazen wants Americans to be uneducated and unhealthy. If his thinking is indicative of what our schools are producing, then maybe we should indeed stop trying to educate Americans.

Posted by: lauren2010 | February 14, 2011 9:02 AM | Report abuse

"krazen wants Americans to be uneducated and unhealthy. If his thinking is indicative of what our schools are producing, then maybe we should indeed stop trying to educate Americans"


You're lying again, especially about what I believe.

Large portions of education and health care spending don't actually further the causes of education and healthcare.

Posted by: krazen1211 | February 14, 2011 9:04 AM | Report abuse

"If all goes well, that'll take the deficit down from the 10.9 percent of GDP we're projecting for 2011 to 3% of GDP in 2017 -- a much more manageable level."

And if all doesn't go well - say we have another recession in 2016 after a 7 year economic expansion - what then?

Even with a mild recession, the deficit would then be back up to, say, 5% of GDP. There will probably be Keynesian stimulus too, of at least 1% of GDP.

Posted by: justin84 | February 14, 2011 9:17 AM | Report abuse

krazen

Just ask justin what most of our education money is spent on. Teachers.

That means if we spend less, as you suggest, we must fire teachers.

You don't seem to realize we are a big country with 100s millions of people. And that means we must spend large amounts of money on such things as teacher salaries. WIthout teachers you have to close down schools and make class sizes really huge, and that means education quality will plummet.

And if we reduce spending on health care, that means, less medicare and medicaid, and that means millions more seniors and sick people will be without care.

Any moron knows that spending significantly less on education and healthcare (enough to immediately get serious on eliminating the deficit) will have serious consequences to the state of education and health in America.

Posted by: lauren2010 | February 14, 2011 9:25 AM | Report abuse

"And if all doesn't go well - say we have another recession in 2016 after a 7 year economic expansion - what then?"

Same question applies to GOP plans.

The real question is which plan makes it more likely for a repeat recession. And given that the GOP is the party that sat by and ushered in the current one, as well as the Great Depression, I'd say it's time we stop listening to those proven losers and allow someone else a turn at bat (though I wish it weren't Obama either).

Posted by: lauren2010 | February 14, 2011 9:29 AM | Report abuse

Mr. Klein, yes there's lots of economic and domestic policy, all of it bad for America's future, in Obama's budget proposal. But worse still, as the commentor, Lauren, indicates, no foreign policy. America's needless, winless, and deadly warring consumes about one-half of the federal budget.

Lauren, I agree with you. I would choose your option # 3. Sadly, most Aemericans wouldn't, at least not until they realize that the fourth and controlling branch of government, big business, is mostly responsible for our military budget and for harming the general welfare of the public.

And Lauren, I would add this proposal to your third option, getting rid of the corpocracy, the Devil's marriage between big business and big government, sooner than later, before it is too late and America sinks into oblivion.

GaryBrumback1
www.democracypowernow.com

Posted by: garybrumback1 | February 14, 2011 9:37 AM | Report abuse

"But Pell Grants, for low-income college students, are going to take a hit, albeit a carefully crafted one...Is this a good thing? In absolute terms, clearly, the answer is no."

Yes, it is a good thing.

Many low income college students fail to graduate. Funding the drop outs is more or less a waste of money, at least in my book. Actually, all of the funding is obtained via coercive taxation, and it should stop on that basis alone.

Maybe Cohn can donate his own money to pay tutition for students with a high risk of dropping out. If he believes that would be a good investment, he can invest as much as he likes. He can also put his own money towards repairing windows on unused buildings, if that floats his boat.

Posted by: justin84 | February 14, 2011 9:37 AM | Report abuse

"Just ask justin what most of our education money is spent on. Teachers.

That means if we spend less, as you suggest, we must fire teachers.

You don't seem to realize we are a big country with 100s millions of people. And that means we must spend large amounts of money on such things as teacher salaries. WIthout teachers you have to close down schools and make class sizes really huge, and that means education quality will plummet."


Why do you continue to insist on lying?

In the year 1990, the United States had around 2.5 million teachers. In the year 2010, that number balloned to about 3.7 million teachers. But nobody was closing down schools in bulk in the year 2000 as you are falsely claiming.

In fact, despite your falsehoods, high school graduation rate was the highest in our nation's history in 1969, and it was higher in 1990 than in 2007.

http://www.edweek.org/media/34gradrate-c1.pdf

And of course, in the specific case of New Jersey, you and Krugman are of course telling lies about the real source of our spending problems. We are spending about $3 billion (10% of state spending) on retired teachers who don't actually teach.


"Any moron knows that spending significantly less on education and healthcare (enough to immediately get serious on eliminating the deficit) will have serious consequences to the state of education and health in America."

No, you're just making that up.

Posted by: krazen1211 | February 14, 2011 9:45 AM | Report abuse

"The real question is which plan makes it more likely for a repeat recession."

You can't plan around recessions Lauren. They periodically occur every few years or so. The current expansion will end, and historical experience suggests it will end before the decade is out.

"GOP is the party that sat by and ushered in the current one, as well as the Great Depression"

The GOP isn't blameless, but then neither are Dems such as Barney Frank. If you think the Fed had something to do with the bust, then that quite a bipartisan failure.

Both parties intervene in the economy, and the results are bad for both.

People only know about the Great Depression today because government intervention - including actions that took place prior to FDR's inauguration - kept the disaster rolling for a decade. Very few people today have ever heard of the Depression of 1920-1921, and that's because the government more or less let the economic imbalances work themselves out, and full employment had returned within 2 years of the end of the recession.

"Same question applies to GOP plans."

I don't like the GOP plans either.

Posted by: justin84 | February 14, 2011 9:50 AM | Report abuse

In fact, I exaggerated. In the year 1990, there were only 2.4 million public sector teachers, not even 2.5 million.

http://nces.ed.gov/programs/digest/d09/tables/dt09_064.asp


But getting back to the state of education spending in New Jersey, lying hacks should talk about the Democratic School Construction Corporation.

They borrowed $6 billion (forcing taxpayers to pay more than this in bonds over the years) and didn't really manage to actually build much in the way of schools. 5 years later, they were out of money and there was nothing to show for it. It was instead used as a slush fund to give taxpayer money to Democrats.


http://www.njeminentdomain.com/state-of-new-jersey-eminent-domain-new-jersey-school-construction-corporation.html

Posted by: krazen1211 | February 14, 2011 9:56 AM | Report abuse

I say again, most of the $900 bilion we spend annually is on teacher salaries. That's what justin told me. Right justin?

So if we cut that spending, it clearly means we either cut schools AND/OR we cut the number of teachers. That means huge class sizes if we significantly cut spending, and that translates to decreased quality of education.

Your stats are interesting krazen, but irrrelevant to my comments.

Also, I've heard many conservatives (Kristol, Horowitz, Buckley, Stossel to name a few) speak to preferences to dismantle public education and instead rely on private schools. That's much of the purpose for vouchers.

IN FACT, recently elected Rick Scott, current governor of Florida has spoken of desires to cut teachers, cut schools, and even eliminate school busing (without mentioning how students in rural areas would get to school, whether public or private).

Posted by: lauren2010 | February 14, 2011 10:11 AM | Report abuse

"So if we cut that spending, it clearly means we either cut schools AND/OR we cut the number of teachers. That means huge class sizes if we significantly cut spending, and that translates to decreased quality of education.

Your stats are interesting krazen, but irrrelevant to my comments."

They are very relevant, as you are continuing to lie. In fact, I will specifically point out the sentences that are lies, both of which are proven to be lies by the evidence I posted.

"So if we cut that spending, it clearly means we either cut schools AND/OR we cut the number of teachers. "


"That means huge class sizes if we significantly cut spending, and that translates to decreased quality of education"

Posted by: krazen1211 | February 14, 2011 10:20 AM | Report abuse

"You can't plan around recessions Lauren"

Um, that's my entire point. And why I was wondering why you were pretending it was an issue only for Obama'a plan.

It would have been easier had you just said, Yes, Lauren, you are right. Thanks for pointing that out.

And yes, many (not all) the root causes of recession are tied to bipartisan efforts and the fed too.

But the onset, depth and breadth of it are due primarily to BushJr. He somehow had the power to invade the wrong country and double the national debt and institute unpopular wiretaps and suspend habeous corpus and legalize torture, and eagerly accepted and built on the mistakes of prior admins/congresses.

Frank's mistakes are contributory but not in the top 20 reasons for the crisis.

The Iraq war is a huge chunk of the cause of the recession, both in that he and others were not watching the economy (he said it was sound even when the collapse started) and in that it helped drive up energy and construction prices, and therefore, all other prices such as groceries. Without the Iraq War, and the doubling of national debt, I think the recession would not have been a great one and other problems would have been more easily managed had we a president willing to do so.

Posted by: lauren2010 | February 14, 2011 10:21 AM | Report abuse

krazen

If most of our current spending is for current salaries, explain how we could get by without firing teachers and/or closing schools if we made draconian cuts to that spending (cuts large enough to help balance the budget, as you implied).

Do you think teachers would work for free?

Posted by: lauren2010 | February 14, 2011 10:24 AM | Report abuse

I've got to say I LOVE Cory Booker.

http://www.cnbc.com/id/15840232?video=3000005298&play=1


His police dept where 98 cents of every dollar is spent to cover personnel costs and we have a 68% fringe on top of salaries which is just way out of whack.


The problem is that we don't know the gory details of these contracts that are unsustainable. I doubt Ezra will show us these details or at least I haven't seen him point to these.


using scare tactics of "huge class sizes" is the education reform equivalent of death panels. Its just wrong.

Posted by: visionbrkr | February 14, 2011 10:29 AM | Report abuse

"Both parties intervene in the economy, and the results are bad for both."

Only right-wing ideologues believe that gvmt intervention ALWAYS causes the economy to suffer as a result (if that's what you meant to imply).

Yes, the gvmt often does interfere with the economy by unwise interventions.

But it also intervenes in ways that aides the economy.

The way Clinton/Gore raised taxes in 1994 and worked laboriously to cut red tape in the 90s to allow defense technology to facilitate the hi-tech revolution is an example.

An example where gvmt intervened unwisely would be when Clinton signed Nafta (after BushSr and the GOP members of Congress, against the wishes of the majority of Dems, wrote and ratified it) .

Posted by: lauren2010 | February 14, 2011 10:32 AM | Report abuse

"If most of our current spending is for current salaries, explain how we could get by without firing teachers and/or closing schools if we made draconian cuts to that spending (cuts large enough to help balance the budget, as you implied).

Do you think teachers would work for free? "


This is just nonsense, as evidenced by you throwing out the word draconian without evidence.

We could start by cutting the excessive teacher healthcare and pension benefits.

We could continue by ending pension spiking that is abused in New Jersey and causes the NJ government to pay billions of dollars to retired teachers who are not even working.

We could continue by slashing entitites like the New Jersey School Construction Corporation which take $8.4 billion (about 50% of annual education spending here in NJ) and then don't actually build any schools.

We could continue by not building $185 million on Palace schools in New Brunswick and instead building 3 or 4 much more reasonably priced schools.

We could continue by ending the overtime union contracts for school bus drivers and other administrative staff.

And, of course, you simply lie when you claim classroom sizes will be huge, even if we do reduce the excessive teacher workforce. The federal dept of education clearly indicates that classroom sizes are much smaller than their historical norms, back when nobody described 1990 classroom sizes as 'huge'. More importantly, student achievement was quite similar in 1990 to today, so you are lying by claiming that a return to 1990 classroom sizes will lead to a "decreased quality of education", because it historically has not.

Posted by: krazen1211 | February 14, 2011 10:39 AM | Report abuse

"Large portions of education and health care spending don't actually further the causes of education and healthcare."

I would agree.

Singapore spends 3.1% of GDP on healthcare, vs. 17.6% in the United States.

Moreover, Singapore's government only spent 32.6% of total health care spending in 2007, down from 36.2% in 2000.

U.S. 2009
https://www.cms.gov/NationalHealthExpendData/25_NHE_Fact_Sheet.asp

Singapore 2007 http://www.who.int/whosis/whostat/EN_WHS10_Part2.pdf

Singapore has excellent results.

This suggests easily more than $1 trillion, and potentially $2 trillion in excess annual expenditures are more or less wasteful.

Posted by: justin84 | February 14, 2011 10:40 AM | Report abuse

"using scare tactics of "huge class sizes" is the education reform equivalent of death panels. Its just wrong. "

It's a typical tactic by the NJEA and other teachers unions, their supporters, and their blind followers.

Posted by: krazen1211 | February 14, 2011 10:41 AM | Report abuse

"using scare tactics of "huge class sizes" is the education reform equivalent of death panels. Its just wrong."

Well, it must be true if you say so.

How about my comments on Rick Scott's proposals?

How about my comments that numerous conservative luminaries often remark their preference to transition from public to private schools?

How about the comment that most spending is for salaries, yet if we cut that spending in significant ways AS KRAZEN PROPOSED TO REDUCE THE DEFICITS that we would have to close schools or fire teachers? You explain now how that could be done without firing teachers or closing schools.

Christy alone wants to close down pre-k. Rick Scott is talking about stopping school buses and using vouchers that could be used by any old private enterprise posing as an education provider (none of which will be watched or measured as to their quality or effectiveness).

Jeb Bush wanted to repeal local laws that MANDATED reduced class sizes in FL. Yet, since Lauren brings these issue up when fools like Krazen suggest we should slash education and health budgets, I'm playing a fear card.

Posted by: lauren2010 | February 14, 2011 10:41 AM | Report abuse

justin

What is the typical singapore teacher salary and pension and health care costs?

Is that perhaps the true difference between US and singapore education spending?

Did you not tell me that most if the $900 billion is for teacher salary?

How can we reduce gvmt education spending by a trillion if we only spend $900 billion

What do you do for a living and what is your salary and benefits worth? Now, what would a singapore person be making for the same job? Do you propose we reduce your salary now to match theirs?

Posted by: lauren2010 | February 14, 2011 10:47 AM | Report abuse

lauren,

some schools that are horribly under-performing should be closed. Teachers that are horrible should be fired and not protected with tenure or 'rubber rooms'.

I don't necessarily think we should go all the way that some of those Repbulicans you mention say but as far as Christie goes he gets a bad rap but most of the funding that he took away last year he took away from Republican districts and areas. He's also worked directly with Cory Booker (Newark's mayor) to get education reform done. Did you see the 90 second link i posted? That 98% of Newark's police department is personnel cost? That 68% is fringe benefits? There are definitely things that need to be trimmed significnatly there and if you don't think it should be then you're as bad as when you claim I want the status quo in healthcare (which i don't,btw).


And I didn't say it, Cory Booker (Democratic Mayor of Newark NJ) said it. If you care spend 90 seconds watching the link. If you don't, continue to spew talking points.

Posted by: visionbrkr | February 14, 2011 10:51 AM | Report abuse

China has excellent results too.

Maybe we should be communists and get paid as they do?

Justin, I wonder why you don't quote comparitive health stats from other countries that show the US health care system is losing ground?

I think you cherry pick your stats and then you don't reveal the crucial facts behind them. For example, why did't you tell us the reason singapore education expenses are lower is that they get paid lower?

Posted by: lauren2010 | February 14, 2011 10:52 AM | Report abuse

I have to go now.

Can't hold down the fort by myself forever.

The reason conservatives WIN is because they are passionate and determined.

That's one thing I admire about them and hate about liberals.

Liberals are even too afraid to call themselves liberals.

All you libs out there reading these comments but cowering in your boots should be ashamed you are afraid to comment on these types of blogs and fight back the neocon propaganda.

So if you want change, stop being a pussy and start letting people know what you think, and start pushing back against the crazies on this, and other, blogs. The few of us who do can't be here all the time to fight against a very determined and well funded foe.

Posted by: lauren2010 | February 14, 2011 10:57 AM | Report abuse

"The way Clinton/Gore raised taxes in 1994"

Raising taxes didn't help the economy. While lower deficits reduced interest rates, cutting spending would have accomplished the same.

"and worked laboriously to cut red tape in the 90s to allow defense technology to facilitate the hi-tech revolution is an example. An example where gvmt intervened unwisely would be when Clinton signed Nafta (after BushSr and the GOP members of Congress, against the wishes of the majority of Dems, wrote and ratified it)"

Cutting red tape and eliminating trade barriers are examples of unwinding previous government interventions.

NAFTA was more or less good, though the U.S. should have simply opened its borders to trade, without any formal treaty. At the same time, we should also have gotten rid of subsidies to our producers (e.g. corn subsidies which hurt Mexican corn farmers).

Posted by: justin84 | February 14, 2011 11:00 AM | Report abuse

Teaching staff Pupil/teacher ratio

http://www.childinfo.org/files/IND_Singapore.pdf

Singapore

Primary school, 2005 23.5
Secondary school, 2005 17.2


Singapore has much higher student:teacher ratios than the United States. Further proof that so called 'huge' classrooms are not a deterrent to learning.

Posted by: krazen1211 | February 14, 2011 11:07 AM | Report abuse

vision

no where did I say or imply we did not have education problems, or that we shouldn't fire bad teachers or close down ANY schools, even if they are truly terrible and unfixable.

My comments are entirely directed at extremists like krazen who want to completely eradicate education and health spending of any kind, or at least enough to make inroads at balancing the budget.

You haven't figure out that most of my comments are directed at extremist and impractical stances.

I've stated many times here I want a balanced budget. But anyone who thinks they can do it through a purely ideological means (either left or right) is a fool. We can only do it when ALL OPTIONS are on the table, not just the ones you favor. And krazen clearly favors a purely right-wing, libertarian approach towards the dissolution of gvmt as we know it.

So just answer my common sense questions and stop pretending you can win a debate by claiming I am using talking points.

My rebuttals demand explanations from loonies like krazen who think there aren't consequences to the kinds of purely ideological spending cuts he demands. And when justin tries to defend him by comparing US salaries to singapore salaries, then he is the one using talking points.

Justin himself told me we spend $900 billion annually, and that most of it is for teacher salaries. So again, how do we cut ONE TRILLION if we spend $900 billion and most of it is salary?

I'm all for cuts. But across the board, and including defense, and raising taxes on the wealthy, and for reforming corporate taxes, and for replacing free trade with fair trade.

Are you for across the board cuts and tax raises for the wealthy? If not, then you are part of the problem.

Posted by: lauren2010 | February 14, 2011 11:13 AM | Report abuse

singapore has other factors which mitigate the needs for smaller class sizes.

They have parents who care.

Asian children even do well here in the US in bad schools.

When parents start caring here, then we'd be in a position to reduce numbers of teacher by some amount.

Posted by: lauren2010 | February 14, 2011 11:17 AM | Report abuse

justin

you have your opinions, so do I.

I worked in Internet startups during the 90s.

I can tell you with certainty that most venture capitalist outfits and hi-tech CEOs attributed tax raises with balance budgets and increasing liquidity for venture enterprises. And no, creating new laws to release new tech for economic gain is not reversing old practices.

Posted by: lauren2010 | February 14, 2011 11:20 AM | Report abuse

"China has excellent results too.

Maybe we should be communists and get paid as they do?"

Well no. Communism would be evil even if it worked, but it is helpful that it doesn't. Also China is a developing country and thus not the best comparison. It's per capita income is roughly where the United States was at the end of the Coolidge Administration. Singapore, on the other hand, is a rich country (richer than America), and is the only one in which saving and paying for much of one's own expenditures is a key part of the system.

But let's take a look at the usual statistics trotted out by liberals and see:

China is ranked #103/#120 for infant mortality, vs. #1/#2 for Singapore and #33/#46 for the United States.

http://en.wikipedia.org/wiki/List_of_countries_by_infant_mortality_rate

Life expectancy in China is 73 years, vs. 78.3 in the United States and 80 in Singapore.

http://en.wikipedia.org/wiki/Life_Expectancy_by_Country

Singapore also spends a lower proportion of its GDP on health care than China (3.1% vs. 4.3%).

"I think you cherry pick your stats and then you don't reveal the crucial facts behind them."

Singapore is the best example available of a health care market in action. I pick it because pretty much all of the other developed countries have a at least a semi-socialized model. Even Singapore does, to a degree. But keep in mind that Singapore's government spends a smaller percentage of GDP on health care than Obamacare will by itself when enacted.

Liberals keep asking for an example of laiseez faire in health care. There really isn't any example in the developed world, but Singapore is the closest. Now, I am being accused of cherry picking? Fine, I'll go back to describing what a laiseez faire health care market might look like, but please don't complain that I'm not providing real world examples.

Posted by: justin84 | February 14, 2011 11:21 AM | Report abuse

Are you for across the board cuts and tax raises for the wealthy? If not, then you are part of the problem.

Posted by: lauren2010 | February 14, 2011 11:13 AM | Report abuse

No i'm not for them but then again I'm not for them for everyone else either. 85% of the cost of the Bush tax cuts that were extended were for the "non-wealthy". You can't get far enough to where we need to go by just focusing on the "tax cuts for the wealthy" (again another talking point). IMO no one should have gotten a tax cut in 2011.


You are right though that not enough parents care here in the US about their children's education. I recall a story about my own daughter that I mentioned a month or so ago. THe teachers and administrators acted like they didn't return my or my wife's calls because most parents wouldn't care how their kids are doing. That's a problem too. We cared, we forced the issue, got my daughter out of a class with a horrible teacher (who felt it more important to bring her union rep to the meeting with adminsitration than to get my daughter the help she needed. She's now doing great (got a B+ on her most recent test) (partly because we're working more with her and got her a tutor). Now what do students do who's parents can't afford a weekly tutor because they're not learning in school? Sadly they fail and start the whole cycle over again.

Posted by: visionbrkr | February 14, 2011 11:27 AM | Report abuse

"But Sen. Orrin Hatch (R., Utah), the ranking Republican on the Senate Finance Committee, said late Friday that BABs were 'simply a disguised state bailout.'..."

If so it was the worst disguise since Clark Kent's glasses!

Posted by: johnmarshall5446 | February 14, 2011 11:35 AM | Report abuse

"I can tell you with certainty that most venture capitalist outfits and hi-tech CEOs attributed tax raises with balance budgets and increasing liquidity for venture enterprises."

I wouldn't disagree. Lower budget deficits surely helped in bringing down interest rates (as did growing bond market confidence that the Fed would keep inflation contained). My point is that cutting spending would have also led to balanced budgets, and lower taxes would have meant more cash for VCs.

Posted by: justin84 | February 14, 2011 11:42 AM | Report abuse

"Why cut a billion dollars from a highly successful program that provides supplemental nutrition to pregnant mothers, infants, and young children?"

Well, one reason is obviously because you're evil. LOL

BUT the other reason is more complex and less likely to be openly debated. With the rising rate of out-of-wedlock births, governments have effectively become the fathers for many segments of society.

You REALLY didn't think that 66% and rising were receiving child support did you?

Posted by: johnmarshall5446 | February 14, 2011 11:42 AM | Report abuse

"Although the threat here may be from China, our model ought to be Germany - another high-wage economy that over the past decade has restored its competitiveness by achieving the lower unit labor cost in Europe. How did they do it?"

Pearlstein, the poor man's Krugman, strikes again.

They did it by German banks providing the exclusive financing to European nations to make those purchases. Why do you think that the PIGS nations haven't gone under yet, noblesse oblige?

It's because that Germany in particular and France as well, can't say as Cee-Lo Green might sing it "FFFFFFForget You" to these nations without a huge killing in their banking industry. So effectively speaking IMF bailouts are financing the difference in price between German and Chinese goods.

Really, who DOES Pearlstein know to keep his job?

Posted by: johnmarshall5446 | February 14, 2011 11:51 AM | Report abuse

"singapore has other factors which mitigate the needs for smaller class sizes.

They have parents who care.

Asian children even do well here in the US in bad schools."

I would agree that parents are a big part of the problem. However, pouring money into schools when bad parenting is the issue probably won't help much. The statistics seem to bear that out.

There needs to be a way to get parents to care about education and their children's future employment prospects. The welfare state is currently part of the problem, in that it enables poor decision making. Drug prohibtion is also a huge part of the problem, on many dimensions.

Posted by: justin84 | February 14, 2011 11:55 AM | Report abuse

"High-speed rail investment is just wasteful spending, writes Robert Samuelson"

Samuelson is a terrific writer, and one of the few who can make complex subjects readable. Allan Sloan is another.

He didn't even bring up the most obvious argument. All of the components of HSR are made overseas, not in the US. so the only money that actually "invests" in America will be building the roadbed and buying the right of way!

Posted by: johnmarshall5446 | February 14, 2011 11:57 AM | Report abuse

"Singapore has much higher student:teacher ratios than the United States. Further proof that so called 'huge' classrooms are not a deterrent to learning."

This is a very interesting argument. Believe it or not, I was one of 72 boys (all boys!)in my first grade class, but it was a private school, and the discipline was iron!

(Sister Jean Marion, in the first grade, once told us to raise our hand as soon as we finished a problem because the first one would get a prize. I raised mine and said "Sister, I'm done" She looked up at me and said "Are you a chicken?" Puzzled, I said "No" She said "Then you're not done". She wanted me to say "finished" but it took me months to figure that one out! LOL God Bless You Sister, wherever you are!)

Yet as we moved through school years, the "dumb kids" were always the dumb ones and the "smart kids" were always the smart ones. You could have predicted who was going to graduate college from the end of year first grade results.

Still, the ones who didn't do well in school, for the most part became productive members of society in some area, probably because almost all came from working class families who raised them to live that way.

So my conclusion over the years has become that more important than teachers and class-size is the parental background, or lack of the same of the students.

Posted by: johnmarshall5446 | February 14, 2011 12:14 PM | Report abuse

"When parents start caring here, then we'd be in a position to reduce numbers of teacher by some amount."

Exhibit A of a position built completely on lies and fiction rather than facts and evidence.

Even the United States did better in 1990 with LESS teachers.

Posted by: krazen1211 | February 14, 2011 12:32 PM | Report abuse

"My comments are entirely directed at extremists like krazen who want to completely eradicate education and health spending of any kind, or at least enough to make inroads at balancing the budget.
"

It's one thing to lie about the issues. Please do not lie about me.

Nowhere have I advocated for the complete eradication of anything of any kind

Posted by: krazen1211 | February 14, 2011 12:34 PM | Report abuse

The budget strategies of each party to reduce Pell Grants are alarming.

We live in an era in which states are drastically slashing the public contribution toward tuition at public universities, and as a result the costs to students and families for college tuition is skyrocketing. After financial need is calculated on the FAFSA, the Pell Grant is the first financial aid tool that comes into play. The grants help make a college degree possible not only for students from a low income background, a large proportion of middle class families now must rely on the grants.

Rather than reducing this lifeline for higher education, we should be finding ways to enlarge the grants to keep pace with tuition hikes. If are serious about providing equal opportunity, and if we are serious about cultivating our very best talent for a more robust and innovative economy, we would ensure that the doors to higher education remain open to every academically qualified student.

Posted by: Patrick_M | February 14, 2011 12:37 PM | Report abuse

"Rather than reducing this lifeline for higher education, we should be finding ways to enlarge the grants to keep pace with tuition hikes"

Or....wait for it......we could stop fueling the college arms race so tuition would stop hiking itself.

Posted by: krazen1211 | February 14, 2011 12:39 PM | Report abuse

"ou are right though that not enough parents care here in the US about their children's education. I recall a story about my own daughter that I mentioned a month or so ago. THe teachers and administrators acted like they didn't return my or my wife's calls because most parents wouldn't care how their kids are doing. "


For the most part, parents don't care because they don't have to. As guys like Paul Krugman know, dropout factories like Trenton where lives fail, continue to fail, and collect an even larger proportion of NJ state tax dollars. They waste that money, fail some more, and get even more tax dollars.

When failure is rewarded, it perpetuates.

Posted by: krazen1211 | February 14, 2011 12:43 PM | Report abuse

@Patrick,

welcome back btw. And at the same time we should be addressing WHY higher education costs are spiraling up as well. I'm sure healthcare costs are in there as well hidden as always.


@krazen,

and in that example of mine that teacher should be on suspension or at least some sort of warning but she wasn't. Before we got my daughter moved out of her class we found out that about half the class (as per my daughter) was failing and this is in a fairly highly regarded district. Sadly this failing teacher will probably stick around for years failing student after student because the union's protecting her and the end result is not one child's struggle but hundreds or thousands.

Don't get me wrong most teachers are very good and have the best interest of their students at heart but just as in any profession there are bad ones and need to be addressed in a fair way but also in a way that doesn't perpetuate the problem.

Posted by: visionbrkr | February 14, 2011 12:52 PM | Report abuse

"However, pouring money into schools when bad parenting is the issue probably won't help much. The statistics seem to bear that out."

Slashing money when parents don't care is worse.

If someone proposed ideas to get parents involved and then to align class sizes based on a sound philosophy (other than the GOP mantra to cut regardless of what happens) then we are talking common ground.

But again, my conversation with krazen was not about pouring money into ecucation. It was about his crazy idea to take the budget chainsaw on education and health care while really not proposing any ideas to fix education or healthcare. Also, he proposing slashes in just those areas while preserving the DoD budget and hig-end tax cuts just means you aren't solving anything. Any money saved by such slashes will just end up in some corporate bank accounts by other means (until you fix everything).

Also, krazen has opined many times on this blog to just cut all health care programs and not to replace them with anything and instead allow a predatory business model to help us.

So, again, we are not talking about pouring money into education. The money krazen wants to slash is what pays for teachers in the system we have now where parents don't care. The teachers are defactor parents and the best influence on kids today in school. To also slash teacher positions and schools for ideological purposes and without a carefully thought out paradigm shift is krazen.

Posted by: lauren2010 | February 14, 2011 12:53 PM | Report abuse

krazen to lauren: "It's one thing to lie about the issues. Please do not lie about me. Nowhere have I advocated for the complete eradication of anything of any kind"

http://voices.washingtonpost.com/ezra-klein/2010/09/how_to_balance_the_budget_thro.html

krazen: "END MEDICAID"

I think that qualifies as "anything of any kind".

Krazen has uttered similar things about medicare and the full repeal of ACA without replacing it without anything of any kind, but I assume one instance of proof (above) is sufficient to show that the one claiming I am lying is in fact the liar.

Posted by: lauren2010 | February 14, 2011 1:04 PM | Report abuse

Patrick wrote:

"Rather than reducing this lifeline for higher education, we should be finding ways to enlarge the grants to keep pace with tuition hikes"

Ummm no actually, that's the biggest reason WHY tuition keeps going up. It's the most obvious and most classical case of Econ 101 theory as it relates to inflation that has ever existed.

Consider that even in the worst days of 2007 to 2009 when the cost of alomst everything was going down, tuition was still RISING because the loan money to fuel it was still avaiable, and in many cases even cheaper than it was before!

Posted by: johnmarshall5446 | February 14, 2011 1:04 PM | Report abuse

I suspect HSR is a bargaining chip by Obama.

Something he is willing to give up for say, higher tax rates for billionaires.

Posted by: lauren2010 | February 14, 2011 1:07 PM | Report abuse

"My point is that cutting spending would have also led to balanced budgets, and lower taxes would have meant more cash for VCs."

I disagree. Higher tax rates provided significant incentives for companies to avoid exec payouts/bonuses and to instead invest internally.

Ever since Reagan decimated high-end tax rates, we have seen less business R&D and more exec pay/bonuses.

I don't share your faith that billionaires will become angel investors and solve all societal problems "if we only let them keep their money".

I think the Clinton era tax rates were low enough to say we let them keep their money.

People are capable of murder, and businesses are demonstrably capable of predatory business behavior. You seem to have faith that businesses are incapable of predation and can cause great harm to a society.

I say we need balance. And right now we are out of balance and need fixes in both business and in gvmt.

Posted by: lauren2010 | February 14, 2011 1:17 PM | Report abuse

Why are tuitions a problem?

Because we no longer have the manufacturing jobs to pay for salaries so kids can pay off their loans.

We are in a period of sliding incomes and decreasing jobs. Until we fix this, there is no way to fix much of anything else because it is all interrelated.

And yes, if we had millions more manufacturing jobs, we would have more hi paying jobs for graduates and not just blue collar jobs.

Posted by: lauren2010 | February 14, 2011 1:22 PM | Report abuse

Lauren wrote:

"Because we no longer have the manufacturing jobs to pay for salaries so kids can pay off their loans"

If you're going in to a manufacturing job as anything but an engineeer, you certainly don't need college to do it. Engineers are a dime a dozen, these days. We certainly don't need to graudate any more of them!

Posted by: johnmarshall5446 | February 14, 2011 1:31 PM | Report abuse

Um, no John

Millions of new mfg jobs has ripple effects and creates millions of college jibs too

You didn't read the last sentence in my previous comment

That's why the Chinese are busily building dozens of new MIT quality colleges, to support their mfg empire.

Posted by: lauren2010 | February 14, 2011 1:39 PM | Report abuse

lauren:

I disagree that there is any chance of millions of new manufacturing jobs . . . outside of China. Read my comment above about Pearlstein's ridiculous column.

Posted by: johnmarshall5446 | February 14, 2011 1:53 PM | Report abuse

Ummm no actually, that's the biggest reason WHY tuition keeps going up. It's the most obvious and most classical case of Econ 101 theory as it relates to inflation that has ever existed.

Consider that even in the worst days of 2007 to 2009 when the cost of alomst everything was going down, tuition was still RISING because the loan money to fuel it was still avaiable, and in many cases even cheaper than it was before!

Posted by: johnmarshall5446 | February 14, 2011 1:04 PM | Report abuse


john,

the same thing can be said of PPACA. The subsidies will inherently inflate the cost of healthcare if price controls aren't in place. Again if people don't feel it or have any or not enough skin in the game then the resulting prices will reflect that and prove CBO's figures woefully inadequate.

Posted by: visionbrkr | February 14, 2011 2:28 PM | Report abuse

"And yes, if we had millions more manufacturing jobs, we would have more hi paying jobs for graduates and not just blue collar jobs."

But there won't be millions of new manufacturing jobs. Ever.

The recession was particularly hard on manufacturing, so I wouldn't be surprised if we perhaps saw a gain of 500,000 - 1,000,000 from 2009-2012 or so, but that will be it.

Manufacturing in 2011 is like Agriculture in 1931. More and more manufacturing will continued to be automated.

From 1991-2008, manufacturing jobs in America fell by 22.72%. Over the same time period, manufacturing jobs in Italy, France, Australia, Germany, Japan, Sweden, Netherlands, UK and Canada fell by 22.57%. There are no 2009 data for France yet, and Germany's stats were obviously distorted by reunification, hence the 1991-2008 time frame.

http://www.bls.gov/fls/flscomparelf/employment.htm#table2_4

Furthermore, the U.S. continues to lead the world in manufacturing output, producing $2.156 trillion in 2009 (2005 dollars), compared with $1.481 trillion in China, $1.104 trillion in Japan, and $557 billion in Germany.

US manufacturing output is up 44% since 1993 (NAFTA), and up 12.8% since the 2001 recession.

See GDP breakdown at constant 2005 prices in US Dollars, manufacturing, mining and utilities.

http://unstats.un.org/unsd/snaama/dnllist.asp

Posted by: justin84 | February 14, 2011 3:18 PM | Report abuse

justin:

Agreed that the loss of manufacturing jobs is systemic, not episodic.

vision:

I can't get my arms around healthcare. You have to know your own limitations, so I leave that battlefield to others for the most part

Posted by: johnmarshall5446 | February 14, 2011 4:04 PM | Report abuse

Regarding the chuckleheaded Pearlstein, here's a longer better explanation of how he has absolutely no idea what happened in Germany

"The movie he should have been watching was "The Godfather" because he gets the German story about 100% wrong.

"Although the threat here may be from China, our model ought to be Germany - another high-wage economy that over the past decade has restored its competitiveness by achieving the lower unit labor cost in Europe. How did they do it?"

They did it through what would be called racketeering, loan sharking, and money laundering (with a twist)if organized crime did it.

You see it starts with the German banks looking for situations where business was relatively good but the credit history was bad, the PIGS and Eastern Europe.

So they offer to loan you money, just like the mob, but one small condition, you have to use XYZ to pick up your garbage.

Now XYZ is of course a mob company, just like the Germans only loaned money on the condition that German goods were bought.

So business is ok and you need more money, and here come the mob, er the Germans to lend you even more money, but the terms are steeper and this time not only XYZ is involved but ABC company too, also German. You no longer have a creditor. You have a business partner.

So hard times come inevitably and the ability to pay falls short of expectations. But the mob, er the Germans have not been idle, and they do NOT lose money.

They've lent money to keep strategic businesses (nations) throughout the neighborhood, so now if those go down, everybody in the neighborhood goes down, and payments become a collective.

Now you musn't think that the German threw the dice on this by themselves. Because they're good bookies, er bankers, they've laid off some of the action to the most influential American banks.

So when the German banks are facing a loss, they point that out to their American partners.

Here's where it pays to be a nation and not a small business being bled by the mob. These nations PIGS etc., go to the IMF and various other international agencies and say we need money to pay the German banks.

For the uninformed, we control the budgets of most of these agencies, by being the biggest contributors.

Well the US, which has put up estimates vary 25-33% of the total money going to bail out the PIGS, can't be seen as giving the money directly to these nations to bail out German banks and German manufacturing. So they launder the money through the IMF, etc. and the American people never get outraged that they have bailed out German manufacturers, while closing American ones.

This the way the world REALLY works. You didn't think that Robert Rubin was Treasury Secretary when Gramm Leach was being pushed (pure coincidence that he stepped down about 4 months before the final vote, when passage was alredy assured), and Hank Paulson was there when the housing crisis went bust, strictly by hapstance, did you?

Posted by: johnmarshall5446 | February 14, 2011 4:50 PM | Report abuse

justin

We have lots of mfg now, as you suggest.

We also have lots of teachers who need to be paid.

Why, when speaking of mfg, is it sufficient to cite large mfg outputs as if that settles things because large numbers are proof all is well, but when speaking of large numbers of teachers and large expenditures for salaries, it suddenly seems large numbers are proof all is not well? Large numbers can't prove anything by themselves. You have to have context.

Anyway, we don't have enough mfg to keep everyone employed and to match our levels of consumption.

Do we?

I mean, do you think the current unemployment rate is OK?

What's all this talk of illegal aliens taking what few jobs we have if mfg is OK?

US mfg is about 10% higher than 2000.

WOW. We are really doing well. Mfg is increasing and we still have more output than anyone on the planet. Go USA! Go USA! Ha ha, you China buggers, we beat you everytime. ha ha

Um, calm down everyone.

However, our economy is over 30% higher than in 2009. Unemployment is up and will remain that way for a long period.

In other words, our level of mfg is diminishing even as our consumption remains high. If that stands, then trade deficits will continue to ballon. Math warning: HC-LM=LTD (high consumption - lowering mfg output as related to GDP/population/etc = larger trade deficits and higher unemployment)

It means NOTHING to say we have the highest level of mfg if in fact it is diminishing and is trending negatively as related to overall GDP or increasing unemployment.

Again, you are cherry picking data and not telling the whole story

Look around your house and tell us what percent of items are made in the USA? I'll wager a significant number of them THAT USED TO BE MADE HERE are made overseas now.

Posted by: lauren2010 | February 14, 2011 5:26 PM | Report abuse

"But there won't be millions of new manufacturing jobs. Ever."

That may be true. But not because it HAS to be that way.

You can blame that on free trade and US's unilateral disarmament on trade protections even as our trading partners hastily and often strengthen theirs.

Don't know how in the same thread you can claim nafta is good for the USA and then utter the words I just quoted above.

Posted by: lauren2010 | February 14, 2011 5:31 PM | Report abuse

"I can't get my arms around healthcare. You have to know your own limitations, so I leave that battlefield to others for the most part"

Then use your heart or your brain instead.

hearts will tell you we need drastic reform, and the only two pragmatic choices in an age of debt mania is to build on ACA or repeal it and never replace it; therefore you have no choice but to support ACA because it is the only way forward now.

brain will tell you to repeal ACA and save money on your taxes, though a tiny voice inside (heart again) will nag that if you get seriously ill your math will be way off.

Posted by: lauren2010 | February 14, 2011 5:37 PM | Report abuse

"So, again, we are not talking about pouring money into education. The money krazen wants to slash is what pays for teachers in the system we have now where parents don't care. The teachers are defactor parents and the best influence on kids today in school. To also slash teacher positions and schools for ideological purposes and without a carefully thought out paradigm shift is krazen"


You're continuing to lie!


1. I suggested the complete repeal of the Medicaid and Medicare programs. Nowhere have I suggested the repeal of the VA or other organizations that provide worthy people healthcare.


"So, again, we are not talking about pouring money into education. The money krazen wants to slash is what pays for teachers in the system we have now where parents don't care. The teachers are defactor parents and the best influence on kids today in school. To also slash teacher positions and schools for ideological purposes and without a carefully thought out paradigm shift is krazen"

2. Not at all. It's ideologues like you who paid off the teachers union by hiring the massive glut of teachers in the first place. You never carefully thought out anything before carrying water for the teachers unions.

Posted by: krazen1211 | February 14, 2011 6:20 PM | Report abuse

"Any money saved by such slashes will just end up in some corporate bank accounts by other means "


Assertion without facts or proof. Par for the course?

Posted by: krazen1211 | February 14, 2011 6:22 PM | Report abuse

Lauren:

"You can blame that on free trade and US's unilateral disarmament on trade protections even as our trading partners hastily and often strengthen theirs.

Don't know how in the same thread you can claim nafta is good for the USA and then utter the words I just quoted above."

It's all about currency and capital. The more I learn, the more I see that. I've been reading Felix Rohatyn's book about his time at Lazard Freres. Very interesting stuff (not as interesting as the Enquirer of course, but I digress)

The Chinese are in a very interesting race with their currency. Can they curb the inlfation without snuffing out the economy. The manufacturing problem may wind up elsewhere if they can't. It won't be coming to the US in any case however. Look for possibly Africa as the new manufacturing center, but not for another 15-20 years of course.

Posted by: johnmarshall5446 | February 14, 2011 6:31 PM | Report abuse

krazen to lauren: "It's one thing to lie about the issues. Please do not lie about me. Nowhere have I advocated for the complete eradication of anything of any kind"

http://voices.washingtonpost.com/ezra-klein/2010/09/how_to_balance_the_budget_thro.html

krazen: "END MEDICAID"

I think that qualifies as "anything of any kind".

Krazen has uttered similar things about medicare and the full repeal of ACA without replacing it without anything of any kind, but I assume one instance of proof (above) is sufficient to show that the one claiming I am lying is in fact the liar.

Posted by: lauren2010 | February 14, 2011 7:20 PM | Report abuse

John

China may become a victim of their own success, and indeed, corps may shift their operations to even cheaper areas as you suggest.

But that's because the USA and other consumer countries are tearing down trade protection and nothing prevents them from maintaining jobs here at home. It doesn't have to be this way, but I doubt American people will wisen up and demand an end of free trade and replace it with fair trade.

Posted by: lauren2010 | February 14, 2011 7:29 PM | Report abuse

"I think that qualifies as "anything of any kind".

Krazen has uttered similar things about medicare and the full repeal of ACA without replacing it without anything of any kind, but I assume one instance of proof (above) is sufficient to show that the one claiming I am lying is in fact the liar."

You'd be incorrect or dishonest.


I have never suggested the repeal of the Veterans Affairs program to cover healthcare for our armed forces.

Posted by: krazen1211 | February 14, 2011 8:05 PM | Report abuse

krazen to lauren: "It's one thing to lie about the issues. Please do not lie about me. Nowhere have I advocated for the complete eradication of anything of any kind"

http://voices.washingtonpost.com/ezra-klein/2010/09/how_to_balance_the_budget_thro.html

krazen: "END MEDICAID"

I think that qualifies as "anything of any kind".

Krazen has uttered similar things about medicare and the full repeal of ACA without replacing it without anything of any kind, but I assume one instance of proof (above) is sufficient to show that the one claiming I am lying is in fact the liar.

Posted by: lauren2010 | February 14, 2011 8:41 PM | Report abuse

This, friends, is where lauren does not understand the definitions of the words she is using. quite sad.

Posted by: krazen1211 | February 14, 2011 9:02 PM | Report abuse

krazen to lauren: "It's one thing to lie about the issues. Please do not lie about me. Nowhere have I advocated for the complete eradication of anything of any kind"

http://voices.washingtonpost.com/ezra-klein/2010/09/how_to_balance_the_budget_thro.html

krazen: "END MEDICAID"

I think that qualifies as "anything of any kind".

Krazen has uttered similar things about medicare and the full repeal of ACA without replacing it without anything of any kind, but I assume one instance of proof (above) is sufficient to show that the one claiming I am lying is in fact the liar.

Posted by: lauren2010 | February 15, 2011 5:40 AM | Report abuse

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