By James Kwak
Broken record alert: Another post on the deficit ahead. Wouldn’t you rather look at funny pictures of cats? Why do I keep writing these? (Hint: The other side keeps writing them.) You have been warned.
Greg Mankiw, noted economics textbook author and former chair of Bush 43’s Council of Economic Advisers, has an op-ed on the deficit that is relatively sensible by the standards of recent debate. He points out that modest deficits can be sustainable, that taxes will probably need to go up, and that a value-added tax is a plausible option. He also points out that Obama’s projections are based on optimistic economic forecasts that very plausibly may not pan out, and that Obama’s main deficit-reduction strategy is to kick the problem over to a deficit-reduction commission, which are valid criticisms.
Unfortunately, his bottom line seems to be throwing more rocks at President Obama, under the general Republican principle that since he’s the president, everything is his fault:
“But unless the president revises his spending plans substantially, he will have no choice but to find some major source of government revenue. Ms. Pelosi’s suggestion of a VAT may be the best of a bunch of bad alternatives. Unfortunately, in this new era of responsibility, the president is not ready to face up to the long-term fiscal challenge.”
Mankiw, not I, brings up the comparison between Bush 43 and Obama:
“From 2005 to 2007, before the recession and financial crisis, the federal government ran budget deficits, but they averaged less than 2 percent of gross domestic product. Because this borrowing was moderate in magnitude and the economy was growing at about its normal rate, the federal debt held by the public fell from 36.8 percent of gross domestic product at the end of the 2004 fiscal year to 36.2 percent three years later. . . .
“[Mr. Obama’s budget] fails to return the federal government to manageable budget deficits, even as the wars wind down and the economy recovers from the recession. According to the administration’s own numbers, the budget deficit under the president’s proposed policies will never fall below 3.6 percent of G.D.P. By 2020, the end of the planning horizon, it will be 4.2 percent and rising.”
What’s missing from this comparison? First, the economic growth of 2005-2007 was at best a mixed blessing, as we now know, driven by an unsustainable and ultimately catastrophic credit bubble. Second, and more importantly, the comparison leaves out the long-term trend . . . wait for it . . . Medicare.
Here’s my favorite chart again, from the 2008 CBO Budget and Economic Outlook.
In 2007, Medicare, Social Security, and Medicaid cost 8.9 percent of GDP (see Table 3-1). By 2018, they were already projected to grow to 10.8 percent of GDP; extrapolating forward at constant growth rates, by 2020 they would grow to about 11.3 percent — an increase of 2.4 percentage points over 2007. That, in one number, is the difference between Bush 43 and Obama. (Ongoing patches to the AMT — something that Obama includes in his projections that Bush did not — also grow to $150 billion by 2018, or another 0.7 percent of GDP.)
Did Bush 43 do anything about this looming problem? No, because one conservative aspiration since Ronald Reagan has been to crimp government by crippling its finances (“starving the beast”). If Bush had actually reduced the size of government to match his tax cuts, in true conservative fashion, we would face less of a long-term deficit problem now.* But whether by accident or design, it turned out to be politically advantageous to kick the problem down the road and therefore make it harder for his successor to govern.
Now, this doesn’t change the fact that it’s Obama’s problem now, and it’s his responsibility to do something about it. But Obama realized that the long-term deficit is a health care problem, while Mankiw doesn’t even use the word “health” in his op-ed on the deficit. If we don’t slow the growth of health care costs, there is no real solution to the deficit problem; the only way out from the budget perspective will be slashing Medicare, but that doesn’t solve the problem — it just shifts it onto individuals. And Obama spent much of the last year pushing for health care reform with major cost-cutting components,** attracting support from some Republican health experts (though not from any Republican Congressmen). Now, it would be meaningful to criticize Obama for having the wrong ideas about how to control health care spending, as a few Republicans have done. But to say he’s not up to the challenge without mentioning health care misses the real point.
Still, it’s true that Obama could put forward a more aggressive deficit reduction plan. If I were king, my plan would include modest increases in the Medicare eligibility age, a whole bevy of health care cost reduction initiatives, modest tax increases (pushed out into the future and made contingent on economic recovery) such as eliminating the cap on the Social Security tax and reinstating the estate tax, and bigger tax increases that would kick in if health care cost savings failed to materialize. But in our current political climate, that would be political suicide for any president and would have zero chance of passage. I’m skeptical about the deficit commission, too, but we have collectively backed ourselves into a position where neither party can afford to even propose the necessary steps on its own.
The political problem is that there’s no politically palatable way to solve the long-term deficit problem. The Republican strategy, after (almost) killing health care reform, is to attack Obama for not having a long-term solution, daring him to propose one so they can then attack him for raising taxes. Yes, that’s the way the game is played. That doesn’t change the fact that it’s a game.
* Bush did make an attempt to reform Social Security. But even if we assume he had managed to stop the growth of Social Security completely, the growth in Medicare, Medicaid, and the AMT fix would by themselves account for the difference between the 2005-2007 deficits and the projected 2020 deficit.
** The Senate health care bill only reduces the deficit by a little by year ten, because the CBO gives it very little credit for its cost-cutting measures, particularly the delivery system reforms. It is fair for the CBO to give those reforms little credit, since they are unproven. But it is also important to remember that there is no proven way to reduce health care costs (Paul Ryan’s plan reduces government expenditures reliably, but it is no more proven to reduce actual health care costs), so the only way to have any chance to reduce health care costs is to undertake the kind of experimentation proposed by the Senate bill.
The Baseline Scenario 
James,
you make excellent points about medicare and deficits. The two problems I have (which are problems of ignorance, rather than an opposing position) are that 1) The health care PR effort was so poor that people across the political spectrum were unconvinced of the benefits and who would benefit, and 2) Other costs (stimulus, bailout, equity losses, job losses) *seem* to be a much bigger problem – although do not seem to show up on your charts.
Let me wax a bit philosophical.
James Kwak: “The political problem is that there’s no politically palatable way to solve the long-term deficit problem.”
To which I think that the reply is this:
“Sufficient unto the day is the evil thereof.”
Yes, we have long term problems, but now, in the aftermath of the severest financial crisis in decades, we face the prospect of a jobless recovery or a double dip recession, or both. And so far, we have seen a failure of our leaders to work together to solve that problem. If we do not do so, how do we expect to solve the problems of the future?
James Kwak: “If we don’t slow the growth of health care costs, there is no real solution to the deficit problem; the only way out from the budget perspective will be slashing Medicare, but that doesn’t solve the problem — it just shifts it onto individuals.”
Yes, the major problem that we face in the near future is the persistent inflation of health care costs. At least, that is the major problem that we all know that we face. Peak oil or climate change may turn out to be greater problems. As you point out, that problem (or either of the others) is not a budget problem per se. If there were no government programs we would still face them.
That fact clarifies matters. The concern for the budget is misplaced. Unless some miracle happens, to solve the health care problem we are going to have to change our behavior, and the same goes for the other potential problems I have mentioned.
Back to the evils of the day. We are in a deflationary or low inflationary environment. In addition, we have unused capacity in our economy, as the unemployment figures testify. Until we bring unemployment down, Inflation is not a danger.
I understand the fears of inflation. The double digit inflation of the 70s and early 80s took a great toll. This evening I took a look at “Adam Smith’s” book, “Paper Money”, about those times. People were having doubts about a fiat currency. However, Volcker brought inflation under control by using monetary policy to induce a recession. Lesson learned.
I also understand the disquiet about the ever increasing deficit. Instead of pursuing a counter-cyclical policy, administrations have spent more than they took in, regardless of economic conditions. Spend, baby, spend! seems to be the government’s motto. How can we enforce fiscal responsibility?
Well, Clinton did, with a Republican Congress. So it is possible, even these days. Should the day come when we must get inflation under control, we can. Whether we will or not does not depend upon plans made today, but upon our leaders of tomorrow.
Likewise, we know how to put people to work. And we know that doing so will give them money to spend. Unemployment is concentrated in the poor and lower middle classes, who are more likely to spend than save. Thus, putting them to work will stimulate the economy further. None of this is a secret. The best critics can do is to suggest that it is futile. But nobody is suggesting a better idea for reducing unemployment in the near future. If they do suggest and alternative, why not implement it? Let’s work together.
As for the problems to come, can we not meet them better if we have a healthy economy? If an oil shock comes in 2012, can we not meet its challenge better with 3% unemployment instead of 8%?
First things first. Let’s revive our economy now.
I’m not surpirsed that if these criminals feel they have to talk taxes, then they’d say the VAT is the best of bad choices, since it’s the most regressive.
Which is exactly why we the people have to ferociously resist it.
This is an insane, unsustainable system of organized crime, and no outcome which leaves the system intact is going to represent any return to stability, prosperity, justice. We can assume that every single thing they propose, no matter how good it could be in theory, will in practice only at most temporarily stave off total collapse,will do nothing to lessen the pain of the non-rich, and will on the contrary seek to increase that pain.
So it would be with a VAT, whose revenues would never be used to render the system more rational. Every cent extracted would simply be thrown down the same corporatist rathole as every borrowed cent is today.
Don’t let anyone tell you the VAT makes sense in theory, or think back to some ivory tower discussion you once had. That could only refer to a perfect world, compared to the gangster cesspool in which we’re mired today.
In this Hobbesian fire-fight, we have to hold onto what little we have. Any new tax is another assault which would only go into the same bankster pockets.
If you still think it’s at all possible the system can be redeemed, then there’s one and only one indicator to look for: the day they seriously propose, actually enact, and actually enforce, a real, rational, progressive marginal income tax.
Unless that’s the tax, then you know know it’s another theft plain and simple, more class war, more redistribution upward, and purely for the benefit of the same gangsters who are already raping us.
I keep dreaming of the day some particular rape will be the tipping point which actually rouses Americans. So I guess I hope they do try to impose new taxes on the non-rich. Maybe that might finally be it.
How much energy can the system assimilate before it tips to the other strange attractor? How long will the people remain “attracted” to their own destruction?
When you look at this generational theft, history will record the biggest heist in the history of the world:
http://americaspeaksink.com/2009/04/navy-seals-target-wall-street-pirates/
All talk about the deficit is utter nonsense. I will believe there is a deficit problem after we return to progressive income tax rates and progressive estate tax rates (with middle class exemptions) and progressive franchise taxes on corporate income. Meanwhile, VAT is the worst imaginable solution. As for social security, try eliminating the payroll tax cap. You should save the centerist claptrap for the addle headed readers of the NYT.
I also wish that he wud have proposed al alternative to a VAT which seems to me to be a distant second choice to throwing the whole IR Code out and replacing it (corporate and estate taxes included) with a progressive consumption tax.
The much respected Mr Kwak provokes yet again by
asserting that:
“If we don’t slow the growth of health care costs, there is no real solution to the deficit problem; the only way out from the budget perspective will be slashing Medicare, but that doesn’t solve the problem — it just shifts it onto individuals.”
He has been known to assert that “we all understand that this is the main problem”. Well, here is one reader who disagrees.
Point one: All other developed countries in the
world have a single payer health care system(to
a greater or less extent).
Point two: All other developed countries in the
world pay less than 10% of their GDP on health
care, while we Murricans pay 16%(and the reasons
for this enormous discrepancy are obvious to all,
right?)
Point three: Most other developed countries have
much _better_ health care, by most measures. E.g.
longevity, birth weight of infants, risk of
death/disease for women in childbirth, and many
other measures. (Check who.int) This third point
isn’t really necessary to my argument; I throw it
in as lagniappe.
I have no idea whether Mr Kwak reads these comments,
but perhaps others will.
A final remark: Mr Kwak(whom I really esteem; this
just is my day for dumping on him) likes the
graph at the top of this page. I don’t see why.
It shows: what has actually happened is wiggles,
but what is predicted to happen is smooth increase.
Isn’t it more likely that, as in the past, so in
the future, we’ll get wiggles?
Best wishes to all, including especially Mr Kwak!
Alan McConnell, in Silver Spring MD
One time costs like the Recovery Act and the bailouts are negligible in the long run, as the oft-quoted CBO chart tries to demonstrate, even though it sounds good to rail against them on TV. Job losses kill the income side, but aren’t “costs” per se.
Actually Jake, I think there’s at least some reason to think the U.S. system of taxation is already quite progressive (mostly because of how few people actually pay income taxes; see the two links below for more):
http://www.cbo.gov/publications/collections/taxdistribution.cfm
http://lanekenworthy.net/2008/02/10/taxes-and-inequality-lessons-from-abroad/
Therefore, I’ve always been fairly sympathetic to those calling for a value added tax provided the funds raised are earmarked for a specific social safety net program. The European progressive compromised with their conservative counterparts a long time ago. They got a generous social safety net in exchange for promising to fund it conservatively. If U.S. progressives could obtain a credible promise that any funds raised from a VAT would be used to support the social safety net I would seriously consider making a similar compromise. However, without a concrete plan to earmark funds I would have to agree with Russ’ statements above.
Alan McConnell: “A final remark: Mr Kwak(whom I really esteem; this
just is my day for dumping on him) likes the
graph at the top of this page. I don’t see why.
It shows: what has actually happened is wiggles, but what is predicted to happen is smooth increase.
Isn’t it more likely that, as in the past, so in
the future, we’ll get wiggles?”
I know what you mean. ;) The smooth lines result from projections. In my time reading economics blogs, I have often come up short at graphs, saying Wow! only to find that the tiny numbers at the bottom say 2014 or 2060. If economics could actually predict 6 years ahead, that would be one thing. But can they even predict 6 months ahead? At the very least such graphs should have error bands. But I suspect that that would reveal what BS they are.
Rockfish: “Job losses kill the income side, but aren’t “costs” per se.”
They are opportunity costs. Economists have no trouble estimating opportunity costs. If they do not graph the costs of job losses, perhaps the reasons are ideological.
Anyone worried about the deficit should be screaming for policies that move us toward full employment. There’s nothing else that even comes close to producing as much revenue; not Social Security reform, not decreasing the size of the military, not even Health Care reform.
Maybe ‘Murricans pay more for health care and perform poorer in health measures because ‘Murricans are less healthy? Maybe if ‘Murricans stopped guzzling fructose, grains, and industrial fats, and started eating more foods with nutrients, like vegetables, there would be far less obesity, cancer, diabetes and every other disease of civilization! Maybe then it wouldn’t take 16% of GDP!
I’m not keen on an across the board VAT but some selective taxes on some kinds of consumption would be useful. Gasoline needs to be more heavily taxed: to reduce consumption, alter driving behavior – and as a source of revenue for let’s say, paying in part for health care. Most Europeans pay between 6 and 10 dollars per gallon – of which the major share is tax. $2, a gallon tax for starters. Road use taxes: a combination of tax by engine displacement and mean miles driven per year. Differential tax on house size, i.e. anything over 2000 square feet pays a federal ‘space waste’ tax. As I’m in a Veblenesque mood, let’s tax golf courses (the Tiger Wood memorial tax) as they are a waste of space and heavy polluters, lawn taxes-if you must mimic Versailles with acres of useless green sward, a tax on anything larger than a postage stamp. Trophy kitchen tax: if your range cost more than 1k, a 20% tax on ‘luxury’ appliances. A narcissus tax on all elective cosmetic operations (50% tax on botox). I’m not worried about the deficit, rather a new era of chronic joblessness (v. D. Peck piece in Atlantic), increased social conflict, growing emmiseration. So selective taxes make sense – to fund what is essential: healthcare, education, infrastructure. While we’re at it, a 40% cut in armament spending
Questions of progressivity aside, it seems to me that one big problem with a VAT is that it taxes economic activity. Why in the world should we penalize that? A tax on wealth, property, or land could penalize the lack of economic activity, and be “progressive” besides. NKlein, what do you think of Henry George’s “one tax solution”? See http://www.henrygeorge.org/pcontents.htm
Wow! and Hurrah! “one big problem with a VAT is that it taxes economic activity. Why in the world should we penalize that?” I have been saying this for _years_, mostly about our sales taxes.
Mr(Ms?)Min, I also thank you for your comment
about “wiggles” in your reply to my previous post.
You are too smart! Gotta learn to hide that, or
you’ll never make it in government or the
higher realms of business.
Best wishes,
Alan McConnell, in Silver Spring MD
Thanks for the link Min; It’s been five or six years since I’ve come across any discussion of Henry George’s ideas. Mostly I think the one-tax solution is too simplistic. Slapping a punitive tax on any single category of wealth will just cause people to shift their resources into other categories. Moreover, (investment) wealth, property, and land can all be used to further public purpose so I don’t see any reason to prioritize one category over another. I like D. Christopher Leonard’s ideas below, but I don’t think the idea of fine tuning non-productive consumption taxes is politically feasible. “Productive,” is a highly subjective term and people can be very touchy about their consumption habits. While a broad-based consumption tax might not make much sense economically, politically I think it’s an easier sell. Unfortunately, most of the conversation about taxation is caught up in the nonsensical notion that taxes are needed to “fund,” government spending. Taxation is always about adjusting behavior. In the abstract everyone can agree that our tax structure should incentive productive investment, but when you get down to the nitty gritty details agreement quickly starts to break down.
*As an aside, if you are interested in tax policy I would definitely recommencement this website:
http://www.taxanalysts.com/
Mark Thoma had an interesting article a few months back from this website about whether or not our current tax system promotes the creation of wealth:
http://economistsview.typepad.com/economistsview/2009/12/is-our-tax-system-helping-us-create-wealth.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+EconomistsView+%28Economist%27s+View+%28EconomistsView%29%29&utm_content=Google+Feedfetcher
Short answer: no.
Min wrote :
“First things first. Let’s revive our economy now.”
Paul Krugman, NY Times wrote February 16, 2010, 1:06 PM:
“At this point the odds are that in response to the most devastating financial crisis since the Great Depression, we will do … nothing.”
http://tinyurl.com/ycyn3r2
Note to PK: KMA ;)
A clever sally of wit. :-)
I think the budget process is at the root of most of our financal problems.Our budget process doesn’t work; lets try something else.
Nothing has alarmed me more recently than reading the details of the Obama budget in the New York Times which projects a deficit that will grow to 11 percent of our total economic output in 2011. Additionally, the budget projections suggest deficits will NOT return to sustainable levels over the next ten years, but by 2019 are expected to rise sharply to more than 5 percent of the gross domestic product. This outlook, following the Republican administration’s spending spree in the latter years of their term without any efforts to pay for those increases, is a severe indictment of our political leaders.
It is no exaggeration to say this puts our national security at risk, erodes our leadership position in the world and threatens our standard of living.
Government uses Bottom Up Budget Process
The government uses a traditional budgeting process, albeit much more complicated than business. Essentially, it’s a bottom up approach where all departments and agencies of government build their budgets and submit them to the White House for approval. Then it’s up to the President to make whatever adjustments he feels are appropriate, influenced largely by political considerations. When the budget goes to congress for approval, local and regional interests take over and the numbers are tweaked unsparingly.
In essence, the hot button political issues in a given year are the areas that get the funding increases without regard to providing for the out years. For example, the country’s infrastructure has been ignored for years and continues to deteriorate although the President has made this one of his many priorities.
Situation is Serious, Fundamental Change is Needed
The country’s situation is serious and calls for a fundamental change in the way the government budgets. Without knowledge of the constitutional or legal issues involved, I would like to see a top down budget process where the public takes a one time, binding vote to set the country’s budget number and budget deficit ceiling for 2011. The 2011 budget number could not be less than the 2010 budget.
Economists say budget deficits should not consistently exceed 3 percent. However, the administration’s budget projections call for 3.6 percent each year for the next 10 years.
The public vote would bind the administration and congress to reduce the deficit below 3 percent by the end of 2013 and three years after that, reduce it further to 2.5 percent. Thereafter, future administrations would be bound to deficits of no more than 2.5 percent. The only program exempt from the resulting cuts would be National Security which should include NASA.
National Security Would be Exempt From Cuts
For example, in 2011 the National Security budget is approximately $782 billion and Iran threatens the Persian Gulf prompting the United States to take action to forestall their aggression at a cost of $100 billion. When the administration prepares the 2012 National Security budget, it would use the $782 billion figure for the 2011 deficit calculation rather than $882 billion.
If the politicians don’t have the will to take action and they fail to meet these financial accountability goals, there would be consequences. The voters would become engaged. If the deficit has not been reduced to less than 3 percent by the end of 2013, the Democrats would present a set of budget cutting options, as would the Republicans, and a public vote taken on which plan to adopt. If neither plan receives a majority vote, the parties would submit revised plans. The same process will be used again if the 2.5 percent deficit goal is not achieved by the end of 2016.
Entitlement programs Need Better Controls
The top down approach means the administration and congress would be pressured to work together in finding a solution to the growth of entitlement programs and find common cause in ways to bring them under control. It also will weigh heavily on the administration to find better ways to grow the economy and create jobs to get the revenues that would enable them to meet their deficit reduction goals, legislate new programs or expand existing programs.
If and when an increase in the national debt became necessary, another public vote would be taken if the administration and congress have not met the deficit reduction goals. This will help refocus Washington politicians from spending on their favorite projects to rebuilding a strong financial engine that will restore our world leadership.
However, the greatest benefit of a top down budget approach is to put power back in the hands of the people. We gave them the power, so let’s take it back. Can it be done? Let’s ask the voters.
There is a long term solution to the budget problem; however, so long as there is a fractional reserve banking system, that is, so long as money is debt, nothing can be done. But assuming the abolution of that system, the deficit will be easily handled. Here’s how.
45% of the deficit is to the gov’t itself, SS, medicare, etc. This portion can simply be monetized over a 10 year period, and the funds converted into Sovereign Wealth funds. Montetizing the debt MAY have some inflationary effects, but not that many.
Some 27% of the debt is to foreign entities. These could be dissolved over a 10 year period by a modest Tobin Tax on equity and securities transactions; let the class that most benefited from these loans pay them off.
Finally there is the portion in the hands of the American public. Leave it in place, to become a smaller and smaller portion of the GDP. The interest paid stays in this country to be spent or invested here, and has little negative effect on anything.
however, we cannot keep running up debts; we have to take away the power to create money from the banks and return it to the public. We can create our own interest free money and invest it in our own infrastructure. Some fear turning this power over to politicians, but that is far better than turning it over to banks. If they create too much and inflation is the result, we know exactly whom to blame and what to do about it. Now, the public doesn’t know and has no idea–or worse, the wrong ideas–about the solution.
2 points:
Health care, as much as it costs whomever pays the bills, also provides many many jobs. Why do all the brainiacs omit this juicy fact in their commentaries. Cut down on health care spending and you cut jobs. EEEK!
and
Apply a chunk of the VAT tax to a single payer health insurance program –as is done in the VAT tax single payer countries–and insist on not spending heavily on useless and extreme last-year-of-life-healthcare, and you have a good start on the Constitutional goal of tending to the common good.
Monetizing the debt is certainly an attractive notion. :)
For one thing, it would make things clearer to citizens what is happening. As things are, we need the debt, because the debt is money. People would not worry about paying off the debt, nor about whether we are going bankrupt. And the people who are upset about a Ponzi scheme could rest easy. We would not have to service the debt as part of the budget. We would not have to pay investors off for the privilege of having money. The veil would be lifted.
Now, some would argue that the current setup imposes discipline on the government, and that that is a good thing. But it is the wrong discipline, because it is pro-cyclical. What we need is a counter-cyclical discipline. People understand that discipline. Some states, cognizant of the fact that in a recession they will have greater demands on them but will be taking in less in taxes, build up reserve funds in good times. That is a good counter-cyclical policy. Maybe the Federal government could do something like that, too. It would be funny money, of course, in the sense that we would not actually need it. But it would impose discipline. Politicians who just spend, spend, spend in boom times could be criticized for failing to build up the fund. It would be symbolic, like the Social Security fund. :)
Quite honestly, there is only one way to solve the Medicare (budget) problem in the long run, and two components: (a) tranform it to Medicare for all (Single Payer) in which all people contribute equally to the cost of health care, except the elderly (although there might be a small negative adjustment in Social Security payouts — maybe 2% — to offset some of the cost), which would result in no looming deficit problem forever, at least in Medicare (note that almost any other fix, except substantial tax increases would harm the elderly AND the economy, and (b) cut the military budget by at least 30% (this is very doable, since we are not supporting the manufacture of excessive arms, and paying to keep more than 730 overseas bases open to no meaningful purpose). Those two fixes would completely cure the future problems with the budget, unless, of course, Congress finds new ways to spend our tax dollars. Needless to say, those things won’t happen until we are already completely incabable of otherwise balancing the budget, because Congress refuses to replace politics with rationality.
“If I were king, my plan would include modest increases in the Medicare eligibility age …”
That doesn’t solve the problem, it just pushes it onto individuals.
I think the idea is that some people would die before they were eligible for Medicare, and so Medicare would not have to pay for them.
Don’t worry folks. Budget deficits can be painlessly reduced. Just call on the Greek Fiscal Advisory Service, ably assisted by Goldman Sachs. These guys are really smart and their fees are quite reasonable. Hey Ho, it’s la dolce vita!
Every article I read ignores the large defense component of the budget. The US can afford to have health care and social security if only it will stop being the policeman of the world. Close some overseas bases. Stop the involvements in wars that we have little or no reason in which to participate. Stop weapons programs that were designed for the wars of the last century and reduce the nuclear weapons budget. Much of what is spent for “homeland security is for security theater and does absolutely no good (didn’t catch to shoe guy or the underwear guy because the bar keeps going up). The defense component of the budget is 50% or more of the total and much of it is discretionary. Lets cut this least constructive part of the budget that is most affected by companies that do nothing to improve the lot of the common man and also are helping to destroy the trust people have in the honesty of government with their graft and corruption.