The Tea Party and Fiscal Fauxhawks

I've heard defenders of the "Tea Party" movement argue that a handful of racist or homophobic comments shouldn't tar the entire group. There are people with legitimate concerns that go to those rallies who are outraged at government spending, regardless of who is in power.

And I don't doubt that. I'm sure there are plenty of folks out there who thought Medicare Part D was just as wasteful as the American Recovery and Reinvestment Act. The main issue is that those people are very easily drowned out by louder voices.

Ta-Nehisi Coates wrote an excellent piece on this topic last week:

I hear GOP folks and Tea Partiers bemoaning the fact that media and Democrats are using the extremes of their movement for ratings and to score points. This is like Drew Brees complaining that Dwight Freeney keeps trying to sack him. If that were Martin Luther King's response to media coverage, the South might still be segregated. I exaggerate, but my point is that the whining reflects a basic misunderstanding of the rules of protest. When you lead a protest you lead it, you own it, and your opponents, and the media, will hold you responsible for whatever happens in the course of that protest. This isn't left-wing bias, it's the nature of the threat.

The main issue I have with people complaining about people complaining about the Tea Party Protests (whew!) is that the "Tea Party" has no set beliefs. It has no platform. It has no founding document. It's a collection of people who range from small-government libertarians to borrow-and-spend Republicans. You have people at the protests demanding that the government be cut in half, and people demanding that there be no cuts to Medicare. You have policy folks and you have people screaming "Where's the birth certificate?!" People who loved Bush's unfunded programs, but hate Obama's deficit neutral proposals...and people who hate both.

The fact that these protests didn't exist (or, if they did, they were much, much smaller) when Bush and the Republicans in Congress were spending untold billions on Iraq, tax cuts, and Medicare Part D puts the entire Tea Party movement in a deep credibility hole from the start.

Heck, I'm not even arguing that the government necessarily should move to a balanced budget; I think it's a worthy target, and getting health care costs under control is a very important first step, but it shouldn't be the country's number one priority right now. But it is economically doable--politically difficult, but entirely possible.

Nor am I ragging on the Republicans for spending money on medicine for seniors. While I can think of a dozen better uses for most of the money Bush squandered, and there are some improvements that could have been made to the policy, I understand the importance of Bush addressing one of the top issues from the 2000 campaign. I just can't take people seriously when they flip-flop on their political beliefs depending on who is in power. These Fiscal Fauxhawks who loved Bush's tax cuts, war, and social spending but rag on Obama have no credibility. And unfortunately, these people are by-and-large the leaders of the Republican party and the faces of the Tea Party movement.

I'm sure there are some credible Tea Party folks--the kind who go on Larry King and stun him when they earnestly say that they want to eliminate Social Security--but they just don't get the most screen time.

TNC is right that the crazies tend to attract attention. I remember anti-war rallies where tens of thousands of people would show up, but the 20 year old anarchists would get the media attention. Or the folks with giant puppets. Nothing kills a message faster than a few outlandish people unintentionally subverting the message.

Perhaps the fact that the Tea Party folks are not emulating the more successful protests from history (Gandhi and MLK for starters) shows us that they, too, are not very serious about succeeding. But I doubt the "movement" could even agree on what "success" looks like.

The Tea Party and Fiscal Fauxhawks

The Budget is Going to be Okay

Paul Krugman of the New York Times writes:

I get a lot of worried mail along the lines of “how on earth will we ever be able to pay off our debt”? Look, there are real worries — but the math per se isn’t very hard.

The Obama administration’s budget (pdf) predicts that by 2020 we’ll have net federal debt of around 70% of GDP and a budget deficit of around 4 percent of GDP. Now, you don’t have to go to a zero budget deficit to make headway on the debt — a budget deficit of 2-3 percent of GDP would imply a steadily declining debt/GDP ratio. So if you believe the administration’s budget estimates, we’ll need to find another 1-2 percent of GDP in revenue or cost savings.

...

That’s not, in economic terms, a huge number. We could raise taxes that much and still be one of the lowest-tax nations in the advanced world. Or we could save a significant share of that total by not being totally prepared for the day when Soviet tanks sweep across the North German plain.

The only reason to doubt our ability to get things under control a decade from now is politics: if we’re still deadlocked, if sane Republicans are cowed by the Tea Party, then sure, we can have a fiscal crisis. And longer term, we’ll be in a mess unless we get health care costs under control — which is exactly what we’re trying to do, in the face of cries about death panels.

Politics complicates the budgeting process because so many people simply don't know how much the country spends on its many priorities. People often over-estimate how much is spent on foreign aid and domestic programs (education, transportation, housing, etc), while they underestimate how much is spent on entitlement programs (Social Security, Medicaid, Medicare, etc). Numbers are changed around the margins, but roughly speaking, how much as a percentage we spend on each item has largely remained the same.

Getting the public to understand the budget is also complicated by lying politicians. One of my biggest pet-peeves is politicians who misrepresent our spending priorities to sell the story that hundreds of billions of dollars are spent every year on waste, fraud, and abuse. We hear stories from ignorant pols who rail against "millions" spent on frivolous things like a middle-of-nowhere museum in Montana or a study on bear mating patterns. (Never mind that $2 million spent on a scientific study breaks down to less than a penny per person.)

Here is Obama's $3.7 trillion proposed FY 2011 budget:

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And here is the breakdown for the $481 billion in discretionary domestic spending:

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If this budget proposal were enacted unchanged, it would increase the overall deficit by $1.2 trillion--that's how much the Administration predicts we'll be short in FY2011. Due to the inevitable economic recovery, the Administration is predicting that the annual budget deficit will level-off in the $700-800 billion range over the next few years. As Krugman says, it's okay to not have a balanced budget. Due to increasing GDP, we can make headway on the debt by simply keeping the deficit low.

A balanced budget is doable, however. All it would take is some modest tax increases and modest budget cuts. It's widely known that the area of the budget that receives the least amount of scrutiny is the Defense budget. Obama insisted on a partial spending freeze, meaning that domestic discretionary spending will not increase from FY10 to FY11. The least the government can do is apply the same standard to the bloated Defense budget.

The biggest budgetary scare is the ballooning costs of health services. That's why you might hear of doomsday stories about the debt being out-of-control within ten years. To me, the biggest selling point of the Affordable Care Act was the CBO reporting that it would lessen the burden on the budget of government-provided health care (Medicare and Medicaid).

So policies are now in place to try to skyrocketing medical costs down. Any problems that arise from Social Security can be dealt with by utilizing modest tax increases or small cuts in benefits. The annual budget deficit is very manageable. Once it's taken care of, we can start paying down the national debt and stop throwing away $250 billion every year.

All in all, as long as the adults remain in charge, things are going to be okay!

The Budget is Going to be Okay