Most newspapers try to reserve such editorializing for the opinion pages, but a NYT article on the Trump budget told readers:
“Yet for all of the talk of fiscal restraint, Mr. Trump’s budget also amounted to an institutional surrender to the free-spending ways of Capitol Hill, which Mr. Mulvaney said had surprised the president and prompted him to refrain from even bothering to advocate deficit reduction.”
This is far from the only issue with this piece. The headline tells readers that the budget would “[add] $7 trillion to deficits.” This is the cumulative deficit projected over the 10-year budget horizon. It should be described as the addition to the “debt.” The amount is equal to 21.4 percent of the end of period GDP.
There are some other items worth noting. My additions are in parentheses.
“The White House budget request would add $984 billion (have a deficit of 4.7 percent of GDP) to the federal deficit next year…”
“Last week, Mr. Trump signed a two-year bipartisan budget deal, struck by congressional leaders largely without his involvement, to boost both domestic and military spending by $300 billion (0.74 percent of GDP).”
“That law increases military spending by $195 billion (0.48 percent of GDP) over the next two years and nondefense spending by $131 billion (0.32 percent of GDP) over the same period. The White House is proposing $540 billion (2.6 percent of GDP) in nondefense spending for 2019 — $57 billion below the new spending cap set by Congress.”
“The plan contains at least $1.8 trillion (0.8 percent of GDP) in cuts to federal entitlement programs such as Medicaid, Medicare and food stamps.”
“The centerpiece of Mr. Trump’s budget is a plan to devote $200 billion (0.09 percent of GDP) over the next decade in new spending to improve the country’s crumbling infrastructure, starting with $44.6 billion in 2019 (0.21 percent of GDP).”
“Mr. Trump’s plan would also allocate $13 billion in new spending to tackle opioid abuse through prevention, treatment and recovery support services as well as mental health programs.”
The $13 billion is a five year total which is equal to 0.00012 percent of projected GDP or 0.059 percent of the budget over this period.
Most newspapers try to reserve such editorializing for the opinion pages, but a NYT article on the Trump budget told readers:
“Yet for all of the talk of fiscal restraint, Mr. Trump’s budget also amounted to an institutional surrender to the free-spending ways of Capitol Hill, which Mr. Mulvaney said had surprised the president and prompted him to refrain from even bothering to advocate deficit reduction.”
This is far from the only issue with this piece. The headline tells readers that the budget would “[add] $7 trillion to deficits.” This is the cumulative deficit projected over the 10-year budget horizon. It should be described as the addition to the “debt.” The amount is equal to 21.4 percent of the end of period GDP.
There are some other items worth noting. My additions are in parentheses.
“The White House budget request would add $984 billion (have a deficit of 4.7 percent of GDP) to the federal deficit next year…”
“Last week, Mr. Trump signed a two-year bipartisan budget deal, struck by congressional leaders largely without his involvement, to boost both domestic and military spending by $300 billion (0.74 percent of GDP).”
“That law increases military spending by $195 billion (0.48 percent of GDP) over the next two years and nondefense spending by $131 billion (0.32 percent of GDP) over the same period. The White House is proposing $540 billion (2.6 percent of GDP) in nondefense spending for 2019 — $57 billion below the new spending cap set by Congress.”
“The plan contains at least $1.8 trillion (0.8 percent of GDP) in cuts to federal entitlement programs such as Medicaid, Medicare and food stamps.”
“The centerpiece of Mr. Trump’s budget is a plan to devote $200 billion (0.09 percent of GDP) over the next decade in new spending to improve the country’s crumbling infrastructure, starting with $44.6 billion in 2019 (0.21 percent of GDP).”
“Mr. Trump’s plan would also allocate $13 billion in new spending to tackle opioid abuse through prevention, treatment and recovery support services as well as mental health programs.”
The $13 billion is a five year total which is equal to 0.00012 percent of projected GDP or 0.059 percent of the budget over this period.
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Hey, I thought it was just a way to give a middle finger to low-income people for getting government aid, but the Washington Post tells readers that the plan to provide baskets of food in place of the current cash-like system where we allow people to buy the food they want:
“It would do this [hugely cut spending on food stamps] in part by requiring many beneficiaries to accept food deliveries in addition to financial assistance, a change the White House believes will improve nutrition quality and cut back on costs.”
It’s good we have the Post to tell us what the White House really believes. Otherwise, we might think bad things about them.
Hey, I thought it was just a way to give a middle finger to low-income people for getting government aid, but the Washington Post tells readers that the plan to provide baskets of food in place of the current cash-like system where we allow people to buy the food they want:
“It would do this [hugely cut spending on food stamps] in part by requiring many beneficiaries to accept food deliveries in addition to financial assistance, a change the White House believes will improve nutrition quality and cut back on costs.”
It’s good we have the Post to tell us what the White House really believes. Otherwise, we might think bad things about them.
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That’s what careful readers of the administration’s budget must assume. After all, the budget tells us that we should expect savings of $59 billion in 2028 from reducing “improper payments Government-wide” (Table S-2). However, we build up to these large annual savings very gradually. There is nothing noted for savings in 2019 and just $1 billion in 2020. Even in 2024, the last year of a hypothetical second Trump administration, the projected savings are only $6 billion.
If we assume that these improper payments were always there, but it will take vigilant effort and ten years to weed out the full $59 billion (and even in 2028 there could still be more improper payments) it means that we could be improperly spending more than $50 billion a year throughout the Trump administration. And that is their assessment.
That’s what careful readers of the administration’s budget must assume. After all, the budget tells us that we should expect savings of $59 billion in 2028 from reducing “improper payments Government-wide” (Table S-2). However, we build up to these large annual savings very gradually. There is nothing noted for savings in 2019 and just $1 billion in 2020. Even in 2024, the last year of a hypothetical second Trump administration, the projected savings are only $6 billion.
If we assume that these improper payments were always there, but it will take vigilant effort and ten years to weed out the full $59 billion (and even in 2028 there could still be more improper payments) it means that we could be improperly spending more than $50 billion a year throughout the Trump administration. And that is their assessment.
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I know and respect E.J. Dionne, but I’m afraid I have to get out a heaping dump truck full of ridicule for his whining about the “agony of the moderate left.” Yeah, times can be difficult for these politicians. After all, when their half measures fail to produce results for those who they claim to represent, they get voted out of office and then are stuck earning multi-million dollar salaries in the private sector or doing six-figure speaking gigs for Wall Street banks.
This compares to life for the more actual left who actually have a far better track record in doing things like recognizing housing bubbles that will sink the economy and knowing that cheap stimulus is inadequate to fuel recovery from a severe recession. There are few people with big bucks who are anxious to have such views promulgated, which means you don’t often hear them in places like The Washington Post.
Anyhow, the only reasonable response to E.J. Dionne is “life is tough.”
I know and respect E.J. Dionne, but I’m afraid I have to get out a heaping dump truck full of ridicule for his whining about the “agony of the moderate left.” Yeah, times can be difficult for these politicians. After all, when their half measures fail to produce results for those who they claim to represent, they get voted out of office and then are stuck earning multi-million dollar salaries in the private sector or doing six-figure speaking gigs for Wall Street banks.
This compares to life for the more actual left who actually have a far better track record in doing things like recognizing housing bubbles that will sink the economy and knowing that cheap stimulus is inadequate to fuel recovery from a severe recession. There are few people with big bucks who are anxious to have such views promulgated, which means you don’t often hear them in places like The Washington Post.
Anyhow, the only reasonable response to E.J. Dionne is “life is tough.”
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The Washington Post’s editorial page is notorious for refusing to own up to its mistakes. In true Trumpian spirit, the paper still has not corrected an editorial touting the success of NAFTA which absurdly claimed Mexico’s GDP had more than quadrupled between 1987 and 2007. The correct number was 84.2 percent.
Anyhow, Fred Hiatt, the editorial page editor, is now complaining again about the horrible harm that will be caused by future deficits. In any plausible scenario, the potential harm from a too large deficit is dwarfed by the trillions of dollars of lost output, and the millions of people needlessly unemployed, as a result of the Post and its allies pushing for austerity following the Great Recession.
The Post’s editorial staff both lack any knowledge of economics and lack integrity.
The Washington Post’s editorial page is notorious for refusing to own up to its mistakes. In true Trumpian spirit, the paper still has not corrected an editorial touting the success of NAFTA which absurdly claimed Mexico’s GDP had more than quadrupled between 1987 and 2007. The correct number was 84.2 percent.
Anyhow, Fred Hiatt, the editorial page editor, is now complaining again about the horrible harm that will be caused by future deficits. In any plausible scenario, the potential harm from a too large deficit is dwarfed by the trillions of dollars of lost output, and the millions of people needlessly unemployed, as a result of the Post and its allies pushing for austerity following the Great Recession.
The Post’s editorial staff both lack any knowledge of economics and lack integrity.
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That one is apparently not on the agenda, at least according to Amanda Taub’s NYT “The Interpreter” piece. The piece notes the declining support for center right and center left parties in most western democracies. While it notes that people feel unrepresented by these parties, it never states the obvious, these parties have consistently supported monetary, fiscal, trade, and intellectual property policies that redistribute an ever-larger share of income to people like Bill Gates and Robert Rubin.
It should not be surprising that most of the public is not enthralled with this outcome and the parties that promote it. And yes, there are alternatives, as I point out in my (free) book, Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer.
That one is apparently not on the agenda, at least according to Amanda Taub’s NYT “The Interpreter” piece. The piece notes the declining support for center right and center left parties in most western democracies. While it notes that people feel unrepresented by these parties, it never states the obvious, these parties have consistently supported monetary, fiscal, trade, and intellectual property policies that redistribute an ever-larger share of income to people like Bill Gates and Robert Rubin.
It should not be surprising that most of the public is not enthralled with this outcome and the parties that promote it. And yes, there are alternatives, as I point out in my (free) book, Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer.
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It’s always important to remember that the problem of high drug prices is almost entirely a government-created problem in the form of patent monopolies. In the absence of these monopolies, almost all drugs would be cheap. In many cases, the free market price is less than 1.0 percent of the patent monopoly price.
It would have been helpful to note this fact in this NYT piece on a Trump Administration plan to lower drug prices to patients. Several Democratic members of Congress, including Senators Sanders, Warren, and Gillibrand, have proposed legislation that would have the government pay for the cost of researching and testing new drugs. By allowing new drugs to sell at generic prices, public funding would not only reduce costs but would also eliminate the enormous incentive for lying about the safety and effectiveness of drugs that exist under the current system.
It’s always important to remember that the problem of high drug prices is almost entirely a government-created problem in the form of patent monopolies. In the absence of these monopolies, almost all drugs would be cheap. In many cases, the free market price is less than 1.0 percent of the patent monopoly price.
It would have been helpful to note this fact in this NYT piece on a Trump Administration plan to lower drug prices to patients. Several Democratic members of Congress, including Senators Sanders, Warren, and Gillibrand, have proposed legislation that would have the government pay for the cost of researching and testing new drugs. By allowing new drugs to sell at generic prices, public funding would not only reduce costs but would also eliminate the enormous incentive for lying about the safety and effectiveness of drugs that exist under the current system.
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The article discusses the agenda of Andrew Yang, a New York-based businessperson, whose political agenda is centered on dealing with mass job displacement due to robots and artificial intelligence. Such mass displacement implies rapid productivity growth, presumably along the lines of the 3.0 percent growth the country saw in the long Golden Age from 1947 to 1973 and again from 1995 to 2005.
This sort of rapid productivity growth would make it possible to reach the 3.0 percent growth rate that Republicans projected when they passed their tax cuts. (GDP growth is the sum of productivity growth and employment growth.) In the years since 2005, productivity growth has been close to 1.0 percent. The Congressional Budget Office and most other forecasters have projected that slow rates of productivity growth would continue. However, the robots taking our jobs crew strongly disagree.
Somehow, most reporting has failed to recognize the relationship between job-killing robots and GDP growth. If we do see the more rapid productivity growth envisioned by those concerned about job-killing robots, then deficits will certainly not be a problem. The country will be seeing enormous growth in its productive capacities and will need lots of spending to keep workers employed and fully utilize its capacity.
The article discusses the agenda of Andrew Yang, a New York-based businessperson, whose political agenda is centered on dealing with mass job displacement due to robots and artificial intelligence. Such mass displacement implies rapid productivity growth, presumably along the lines of the 3.0 percent growth the country saw in the long Golden Age from 1947 to 1973 and again from 1995 to 2005.
This sort of rapid productivity growth would make it possible to reach the 3.0 percent growth rate that Republicans projected when they passed their tax cuts. (GDP growth is the sum of productivity growth and employment growth.) In the years since 2005, productivity growth has been close to 1.0 percent. The Congressional Budget Office and most other forecasters have projected that slow rates of productivity growth would continue. However, the robots taking our jobs crew strongly disagree.
Somehow, most reporting has failed to recognize the relationship between job-killing robots and GDP growth. If we do see the more rapid productivity growth envisioned by those concerned about job-killing robots, then deficits will certainly not be a problem. The country will be seeing enormous growth in its productive capacities and will need lots of spending to keep workers employed and fully utilize its capacity.
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Here are a few small changes from the article in today’s Post (“Massive infusion of spending ends era of restraint for federal agencies, Pentagon) telling readers how the new budget deal would increase the budget deficit.
“The deal signed into law by President Trump will pump more than $500 billion in additional money (1.2 percent of GDP) into domestic agencies and the Pentagon over two years, the biggest increase in spending in almost a decade. It ends months of budget squabbles and provides greater certainty for the government officials responsible for the military, disaster relief and domestic agencies.”
…
“While Congress approved a 10 percent increase in spending for the Pentagon and domestic agencies — lifting the military budget to $700 billion this year (3.5 percent of GDP) and the domestic budget to $591 billion (3.0 percent of GDP) — appropriators on 12 different committees have to fill in many of the details.”
…
“The nonpartisan Committee for a Responsible Federal Budget projects that the United States will have a $1 trillion budget deficit (5.0 percent of GDP) by next year — extremely high by historical standards — and that it will probably last for years.”
…
“Some of the largest debates on Capitol Hill in the coming weeks — a complete budget is due by March 23 — are probably going to be over border security funding, $86 billion in disaster funding and $140 billion in emergency war funding.” (The piece does not indicate whether these would be single year or multi-year appropriations, so it is not clear how large they are relative to the budget or the economy.)
Here are a few small changes from the article in today’s Post (“Massive infusion of spending ends era of restraint for federal agencies, Pentagon) telling readers how the new budget deal would increase the budget deficit.
“The deal signed into law by President Trump will pump more than $500 billion in additional money (1.2 percent of GDP) into domestic agencies and the Pentagon over two years, the biggest increase in spending in almost a decade. It ends months of budget squabbles and provides greater certainty for the government officials responsible for the military, disaster relief and domestic agencies.”
…
“While Congress approved a 10 percent increase in spending for the Pentagon and domestic agencies — lifting the military budget to $700 billion this year (3.5 percent of GDP) and the domestic budget to $591 billion (3.0 percent of GDP) — appropriators on 12 different committees have to fill in many of the details.”
…
“The nonpartisan Committee for a Responsible Federal Budget projects that the United States will have a $1 trillion budget deficit (5.0 percent of GDP) by next year — extremely high by historical standards — and that it will probably last for years.”
…
“Some of the largest debates on Capitol Hill in the coming weeks — a complete budget is due by March 23 — are probably going to be over border security funding, $86 billion in disaster funding and $140 billion in emergency war funding.” (The piece does not indicate whether these would be single year or multi-year appropriations, so it is not clear how large they are relative to the budget or the economy.)
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