O.K., You Fix the Budget

[ProSense]

David Leonhardt: O.K., You Fix the Budget

Behind The Times’s Deficit Project

By DAVID LEONHARDT

My column that’s running with The Times’s new interactive deficit puzzle offers some detail about the methodology behind the project. This post will provide much more detail. As the calculator says, we encourage readers to come up with their own deficit solution and post it online.

The starting point for our calculation is work done by Alan Auerbach and William Gale, two economists who are experts in the federal budget. Mr. Auerbach and Mr. Gale have written two recent papers that review what they call “the dismal prospects for the federal budget.” As an extension of that work, they built a spreadsheet for The Times that analyzed how much savings the government would need to achieve each year starting in 2015 in order to keep the deficit at 3 percent of gross domestic product. That’s the level that many economists consider to be sustainable for the deficit, because one year’s normal economic growth can pay off the previous year’s budget shortfall.

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As the graphic in the Week in Review says: “Why 2030? That’s when Boomers start to weigh heavily on the budget, and it’s the latest year for which experts have estimated costs for budget items.” The graphic does not ask reader to pick the timetable for the cuts, but notes that they would be “implemented gradually over the next 20 years, some taking effect well before 2030 in order to keep the deficit, and thus interest payments on the national debt, at a manageable level between now and 2030.”

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Our baseline was current policy. That is, we assumed that any existing policy would continue, even those, like the Bush tax cuts, that are scheduled to expire. But we then allowed readers to choose the reversal of any such policies as part of their deficit solution.

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[Skink]

1. I'm not the the one that messed it up.

but I would relish the chance to go toe to toe with the enemy.:beer:

[boppers]

2. Their calculator is lame.

I "solved the deficit", but it doesn't let you, oh, cut US military spending to the costs of the 2nd most expensive military in the world, or index retirement ages to life expectancy, or any number of other ideas.

[Lasher]

4. And it doesn't let you eliminate the wars in Iraq and Afghanistan

It just lets you reduce the military presence to 30K.

Here, try the National Budget Simulation Game. It's from way back in 2006 but it's more flexible and informative. If you eliminate the Bush tax cuts and both of his wars you end up with a surplus. This clearly shows we don't need to start stealing from widows and orphans. We just need to stop doing the things that the Worst President in Living Memory got started.

And while I'm at it, here's the Social Security Game

[boppers]

5. Ugh,

I really don't have anything more intelligent to say.

Just.. Ugh.

[ProSense]

11. Actually,

you're right it isn't all that great and the limitations are telling. Still, it's interesting.

[jtuck004]

3. Where's the option for creating a jobs program that would rebuild

the industrial base and funnel billions into alternative energy, infrastructure projects, and polysilicone plants for computer chips?

For a country that could guarantee $23 trillion for Wall Street we sure seem to be chickenshit about investing in our own people on Main Steet. It worked for FDR.

China is doing it today, and if we don't we might as well shut off the lights now.

[Clio the Leo]

6. Puts things into perspective doesn't it?

..... suddenly "reducing the deficit" becomes "which American do you want to take money away from the most."

[cornermouse]

7. No. Not really.

Its not a very good tool because they set limits on how much you can cut. For instance, I would bring the troops home and cut the entire military budget much, much more than the tool would allow me to. And yes, I would stop the upper whatever percent tax cuts (poor people don't need/can't use tax cuts, they need help). I would raise some taxes as well.

[Clio the Leo]

13. Yeah .... let's have NO military at all.

Awesome idea. :sarcasm:

[Name removed]

9. Deleted message

Message removed by moderator. Click here to review the message board rules.

[Milo_Bloom]

12. Flat taxes are regressive.

[SidDithers]

8. K&R...nt

Sid

[polichick]

10. I'd love to fix the budget, beginning with bringing defense spending in line with...

...defense spending in other modern democracies.

[krispos42]

14. Okay, I fixed the budget

http://www.nytimes.com/interactive/2010/11/13/weekinreview/deficits-graphic.html?choices=4m9045qv


74% from tax increases and 26% by spending decreases.


Tax the rich... we went into debt to make them richer, so pay up, fuckers!

[ZombieHorde]

15. Unfortunately, many options are missing; still fun though. nt