I was asked to volunteer to work for Obama

[TheDeadFlagBlues]

The great thing is that your demographic is tiny and is the equivalent of the tone deaf wealthy Greek voters who reside in the Athenian suburbs and voted for the austerity-mongers (DRASI and Renewal) in droves while the rest of the nation ditched PASOK and ND for the opposite reason. Continue to enjoy being tone deaf while the rest of the nation flagellates themselves on the altar constructed to appease your frugality gods.

[TheDeadFlagBlues]

So she got "the lecture" about the fiscal ticking time bomb. Yes, I did vote for him, but not this time. This time I will be voting for Mittens. Why she asked? Because he has been AWOL on entitlements, gave the Bowles commission the finger, and the stimulus sucked, and more stimulus that he wants sucks even more, and now he has gone populist. I lay on her my rap that secular centrist socially rather liberal upper middle types I suspect will be abandoning Obama in droves, and that Obama will need to make it up with Hispanics or somebody.

First, as the above chart using nonpartisan Commerce Department data shows, Obama is the only recent president under whom government spending has shrunk. This is because the increase in federal spending has been smaller than the decrease in state spending. Arguably, the overall size of the public sector is what matters more from a macroeconomic perspective; the public sector as a whole has been implementing austerity rather than stimulus.

Second, though, again re the above chart, even if we're assessing the different levels of government on their own, it remains the case that under Obama, federal nonmilitary spending has grown more slowly than the private sector contribution to GDP. In this sense the trajectory of federal nonmilitary spending is sustainable. Now, it's not completely obvious that this will continue, since the American system of having basically a European-style welfare state for those 65 and above makes it unusually sensitive to the percentage of the population who are seniors, but that would take a reversal of the current trend. And even if that does occur, it remains the case that...

third, public spending as a % of GDP is lower in the US than in many central and northern European countries that have lower public debt and whose economies are broadly successful when they don't enter into hasty currency-union schemes with weaker economies. This suggests, broadly, that the US could easily afford to fund its current (quite limited) entitlement regime in a fiscally sustainable way with increases in taxation.

I remain unconvinced that the idea that entitlement spending growth is threatening the country's economic health is well grounded in an accurate assessment of the state of the budget.

Do you have a link to where you got these charts? I would like to read the context.  I mean we have a problem.  Paul Ryan says the computers crash if we keep on the present course, and you suggest these charts suggest, what me worry?  Something is rotten in Denmark. I want to ascertain just what it is that is noisome.

Paul Ryan is also an Ayn Rand-worshiping, ideologue who's plan has no basis in reality. Why on earth would you consider a plan that cuts taxes on the wealthy dramatically and contains no real specifics on the repeal of deductions to be credible? How is a plan that does this fair?



I'm not sure why I ask these questions when I know the answers to them; I'm just perplexed that a supposedly sane moderate like you would consider Paul Ryan to be a fiscal savior. I guess the root lies in your irrational hatred of public unions and universal healthcare.

[TheDeadFlagBlues]

I didn't opine on the Ryan plan (for one thing I have not really studied it), I just stated what he said the CBO computers did when projecting cash flows forward - they crashed around 2030 or something.

I guess we have a couple of issues on the table to start to get to the bottom of this. First, since we are now combining state and federal spending as part of this exercise, we have to address the slash in state/local government spending. Is that sustainable, or will state/local government functions gradually erode down to unacceptable levels? Second, what will be the impact of the cost of debt carry when interest rates return to "normal" levels, as opposed to being near zero? We also know that the "on budget" ballooning negative cash flow from Social Security going forward will be another drain (that is part of the problem; just what is on budget, and what is off).  And at the moment, it seems that the bulk of the medical cost issue is being absorbed through rapidly increasing insurance premiums - also not sustainable.  

In other words, charts are fun, but one needs to understand what they are really saying, and the context, to formulate intelligent policy, as opposed to making campaign points.  

My point is that Ryan isn't credible, he's a dorky Ayn Rand troll who will blatantly lie to the public to justify his morality play wherein entitlements are leveled and those who adhere to the principles of master morality are raised to their proper place in society. Let the weaklings bow to the supreme being manna.

Why on earth would that slash be considered sustainable? Spending at the local and state level is generally more correlated with population growth because its programs need to be much more responsive to it: it's not really an option to not hire more police officers or firefighters when your cities are still growing at a steady clip and it's not really an option to avoid extra hiring teachers or building new schools for half a decade.

Interest rates won't return to normal levels until the economy starts improving at a measurable rate for various reasons and by that point, we'll be posting significant budget surpluses. See: the fact that we already posted a budget surplus last month. If we can achieve that with a sluggish economy, with continued high rates of counter-cyclical spending, we can certainly achieve that in the future.