Assorted links

by on November 20, 2010 at 2:17 pm in Web/Tech | Permalink

1. Earmarks do cause higher spending.

2. Exactly when was Ireland capable of having a balanced budget?

3. Excellent travel photo albums, mostly of Asia and Latin America, by Jodi Ettenberg, a marshmallow enthusiast.  Here is why she did it.  Here is Q&A (another interview here):

Q: What drives your instinct to travel?

A: A desire to soak up as much as possible, as intensely as possible. I know this sounds broad, but it applies to almost every facet of what I've done these past few years. I am continuously energized by learning new things and experiencing them firsthand.

She skipped undergrad and went right to law school, saving up money for the purpose of later travel and eating street food around the world.  Here are her tips for how to pack for a year.

1 Nylund November 20, 2010 at 10:45 am

That first link about earmarks is pretty dumb. The argument simplifies down to, "because I can make up a story that says they would."

I'd like to see data proving that it does and data proving that its big enough to be worth the time and effort that could otherwise be spent dealing with other issues.

2 Bill November 20, 2010 at 10:59 am

The way that Magicians perform their magic is to distract you, the same way a pickpocket may distract you while lifting your wallet.

The earmark debate has elements of this if it takes your eyes off a far larger and fiscally crippling type of earmark.

The Tax Earmark.

Tax earmarks are special corporate exemptions, exclusions and deductions that are targeted to one firm, or one constituent, or one very, very narrow segment of an industry to reach just a few firms.

Tax lobbying in Washington is the lobbying activity that gets the most money for business constituents.

And, the persons who disclaim spending earmarks are the ones who are the first to get a tax earmark for a business constituent, or so I am told by a friend who is a tax lobbyist.

If you want to do a public service or a term paper or investigative reporting, work on this story.

3 spencer November 20, 2010 at 11:25 am

We are suppose to change our mind about earmarks being a "red herring" because the author has a hunch ?

His points about it making the system more inefficient is a valid point, but I would like to see a little more evidence or data on his argument about appropriations.

4 Bill November 20, 2010 at 11:31 am

Is it an earmark if appropriations are given for a certain category of activity, and you know that the Committee or Subcommittee Chair will have you over to grill you through the oversight process if you do not spend the money the way he expects you to spend it?

Is it an earmark if a Senator refuses to vote on a treaty unless some spending is increased in another defense area, where his state is one of the sites for that type of research?

5 Andrew November 20, 2010 at 1:26 pm

Bill, would you accept doing away with 'tax earmarks' in a revenue neutral way?

6 Bill November 20, 2010 at 2:20 pm

Andrew, Yes, but before looking at tax neutrality, I would first also ask whether the tax expenditure delivers what it promises. Ethanol tax credits, exclusion of ethanol from gas tax, etc. We might be able to do more than neutral! And, if eliminating a tax credit reduces debt, so much the better! Use the money to reduce the deficit, and because a tax break extends to future periods in budget planning in Congress, you reduce the deficit in the present AND the future at the same time.

Another thing we could do is automatically sunset some of these things, so that someone would have the burden in the future to reinstitute a tax earmark and show they worked. Every year we reauthorize expenditures, why not targeted tax expenditures.

As you may be able to tell, I am not saying that tax expenditures can't be more effective than direct expenditures, but it is a pragmatic, analytical question and one which requires constant review and reauthorization.

And, when the tax expenditure is so targeted to one specific company, trust, etc. I really have a problem. Just because business x is in your district doesn't mean you get to hand out plumbs at Christmastime to one of your campaign contributors.

Thanks Andrew for asking.

7 Six Ounces November 20, 2010 at 8:23 pm

The first rule of government budgeting:

"Spend on what you want, then beg for what you need."

The second rule:

"Use it or lose it."

There's no doubt earmarks increase spending because the needs are never satisfied.

Annual budgets are always based as a percentage of the previous budget, so even cuts preserve the general level. They don't propose eliminating entire programs, just increasing or decreasing annual adjustments.

Earmarked projects are always part of some larger rubric which has broad public support but individual projects which few voters would support, particularly at the expense of other priorities.

8 J Thomas November 22, 2010 at 4:02 am

Imagine that there is some activity — say, snipe hunting — that members of Congress want to encourage. Senator Porkbelly proposes a government subsidy. “America needs more snipe hunters,” he says. “I propose that every time an American bags a snipe, the federal government should pay him or her $100.”

“No, no,” says Congressman Blowhard. “The Porkbelly plan would increase the size of an already bloated government. Let’s instead reduce the burden of taxation. I propose that every time an American tracks down a snipe, the hunter should get a $100 credit to reduce his or her tax liabilities.”

…. it hardly takes an economic genius to see how little difference there is between the two plans."

But there is. To benefit from the tax credit you must pay $100 or more in tax. The tax credit benefits the rich.

So shouldn't we set up a market in tax credits? Relatively wealth people who lack the time or inclination to hunt snipe but who desperately need tax credits, could pay poor people to hunt snipe for them. Depending on the details of the market, and the options and derivative markets, poor people might get $20 per snipe, leaving others with a net $80 tax cut. Everybody benefits.

Except the snipe.

Comments on this entry are closed.

Previous post:

Next post: