Check the data of those claiming proof of whatever

Many are claiming that high national debt leads to a decline in growth.  According to Mike Konczal, this claim is based on a paper whose results cannot be replicated by other economists.  See "Shocking Paper Claims That Microsoft Excel Coding Error Is Behind the Reinhart-Rogoff Study On Debt",  Business Insider, 2013-04-16.  Among other things, the authors of the study have not released the data they used to determine their results and that they didn't use comparable data from one country to another.

Unfortunately, "This has been one of the most cited stats in the public debate during the Great Recession. Paul Ryan's Path to Prosperity budget states their study 'found conclusive empirical evidence that [debt] exceeding 90 percent of the economy has a significant negative effect on economic growth.'"  And the Washington Post considered it a consensus view of economists!

But the debate doesn't end here.  See also "New Research Undermines The GOP's Austerity Agenda", Jeff Spross, Think Progress, 2013-04-16 and the rebuttal from Reinhart and Rogoff, "Critique of Our Work Still Confirms What We Found on High US Debt", Rob Wile, Business Insider, 2013-04-16.

Why snail research is important

On a Bill Maher show, "Stephen Moore, libertarian economist and Wall Street Journal columnist" kept pounding away that we must reduce the debt and one way to do that is to cut funding for science grants, like $2 million for snail mating research.  "19-year-old Zack Kopplin, science advocate and history student" retorted that government-sponsored science often gives far better returns than many investments.  He gave as an example that the government investment in genome research paid back 140 times the investment.  See "College Kid Forced To Remind Know-It-All Economist That He's Actually Not A Scientist".

Warning: this segment deteriorates into a shouting match!

I might add, would we be reading these stories if the government hadn't invested in the Internet decades ago?  Would we have had Google if the government hadn't given a California university a grant to study search algorithms?

About the snail mating research, "it's to prevent children in developing countries from getting parasitic worms…"  Why should we protect these children from parasitic worms?  Parasites increase poverty.  Poverty leads to corruption.  Corruption leads to terrorism.  Two million dollars is a much better investment to prevent terrorism than two hundred million dollars and rising per F-35, a plane that still has many problems.

Bring on the sequester

I really would rather not say so, but I think the sequester might be a good idea in the long term.  It might really put an end to the arguments about smaller government.

Think about it.  If the number of air traffic controllers and checkin security people are cut back, it might make air travel by business people even longer.  If the amount of money allocated to states to clear the Interstate system of snow was reduced, it might make shipping by truck more expensive.  If the number of FDA inspectors were cut back, it might cut into the sales and profits of food processing companies.  If the number of customs agents were cut back, it would reduce the volume of imported goods that so many merchants depend on.  If the number of patent examiners were cut back, it would take even longer for companies to get patents.  If the number of Federal court employees were cut back, it would take even longer for companies to make their billion-dollar suits against their competitors.

Too many people ignore all the important services that government provides for people and corporations alike.  A sequester might lead to rude awakening that we can't do without government.

Cut spending? Whose responsibility?

I can't find a direct quote, but many Republicans seem to be blaming President Obama for "runaway spending".  But is he spending money that Congress did not authorize him to spend?  I haven't seen any such criticism.

"The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the
Debts and provide for the common Defence and general Welfare of the United States; but all
Duties, Imposts and Excises shall be uniform throughout the United States;

"To borrow Money on the credit of the United States;" - U.S. Constitution, Article I, Section 8

"No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by
Law; and a regular Statement and Account of the Receipts and Expenditures of all public Money
shall be published from time to time." - U.S. Constitustion, Article I, Section 9

So, if President Obama is spending money or borrowing money for which he had no authorization, I haven't seen any such specific complaint.

Republicans in the House are stating that the people sent them to "cut spending".  But one could also say that the people gave the President another term and elected a predominantly Democratic Senate to "increase spending".  Either case overs implies the myriad of reasons people have for voting for particular candidates.  In fact, I would call any claim of "mandate" or a specific mission hubris.

If the Republicans are really serious about cutting spending they would simply pass a budget to their liking.  One would hope they would also cut Federal spending in their own district, but fat chance of that.  Now the next trick would be to get the Senate to go along.  If they could do that, then there would be a budget bill to send to the President.  If he vetoes it, then the House and Senate will need enough votes to override the veto.  These probably don't exist.

So, adults would determine what they can agree on and get that in the budget.  But many in Congress grandstand to please their "base" rather than do some real work for all of the people.

But we shouldn't complain too much.  The government was designed this way over two hundred years ago.

If no new taxes then no new wars?

A mantra of many Republicans, thanks to the persuasive power of Grover Norquist is "No New Taxes!" As a result, even the Super Committee has not come to any agreement on lowering the national debt.

What would these same Republicans, who think action should be take against Iran, think if somebody like Martin Luther King had gotten many Democrats to sign a pledge of "No New Wars!" And the Democrats were intransigent as a large Chinese fleet was approaching the West Coast?

Well a large Chinese interest payment is leaving our shores regularly because we won't raise enough taxes domestically to fund everything politicians and constituents want.

Who caused the deficit? Let the facts speak

See "Obama's and Bush's effects on the deficit in one graph", Ezra Klein, Washington Post, 2011-07-25.

Quote of the day

"The stock market is as emotional as a hockey fan during a game-seven triple overtime of the Stanley Cup finals."
- Motley Fool Email update

Social Security: Raiding the tip jar

Deficit hawks often lump Social Security as one of the drains on the budget; according to them it should be reined in to reduce the deficit.

But this is like a restaurant owner lumping the contents of the tip jar in with his overall income and then considering paying the contents to his employee as an expense.  If he reduces the expense of the tip jar, then he can improve his balance sheet.  He completely ignores that the tip jar is funded by customers with the intent that the contents go to the employees.

Similarly, Social Security is funded by the payroll tax.  Current revenues, by law, go into government securities.  This practice gives rise to the notion that the government is raiding Social Security.  You wouldn't want the money kept in a bank that might fold, would you?  And you would like to see the money earn interest, wouldn't you?

So, the anti-Social Security folks raise a hue and cry about Social Security contributing to the national debt.  Reduce Social Security payments and we can reduce the national debt.

I wouldn't want to be wait staff in a restaurant run by these people.

Would today's Republicans support Abraham Lincoln?

When I read Wired's "Republican Congressman Crowdsource Attack on Science", I thought of all the projects they oppose without even weighing costs and benefits.  The crowdsourcing is an attempt to get the general public to expose "waste" in federal spending, starting with the National Science Foundation.  They essentially take an apparently frivolous aspect of a project without looking any deeper into what benefits might be gained.  They have started YouCut Citizen Review.  Maybe the first cut in the federal budget should be to disband YouCut?

Would today's Republicans support Abraham Lincoln's push for a transcontinental railroad?  Especially with the huge outlay of bonds to fund it?  That would not lead to a balanced budget.

Would today's Republicans support Abraham Lincoln's handling of the Civil War?  Although today's Republicans are big on spending on the military (without any meaningful analysis of the benefits), they are also big on states' rights, the major argument leading to the Civil War.

Debt bad, nuclear power good?

Many are promoting nuclear power as one of the solutions to global warming or energy independence or both. As with many issues, proponents look on the up side but not the down side.

This thought was triggered by "Nuclear power is still loaded with problems", Ken Bradley and Monique Sullivan, Star Tribune, 2009-03-05

Interestingly, nuclear power plants won't be built without government subsidies, further increasing future debt.

I scribbled in the margin of the paper, "If it is bad to leave a huge government debt to future generations, why is it OK to leave the problem of nuclear waste to more distant future generations."

For more of my thoughts on this, see "http://www.cpinternet.com/~mdmagree/nuclear_option_2008-06-19.html ", Reader Weekly, 2008-06-19