Spending Cuts

A big hat tip on this post to Russ Roberts who used the 10 year time frame to compare in this excellent post.

Comments

Alex, read and circulate this great column by Larry Kotlikoff

http://www.bloomberg.com/news/2011-08-03/generational-balance-not-budget-balance-laurence-kotlikoff.html

Join those serious scholars interested in ideas to restore fiscal discipline.

So, who think Yglesias will complain this graph isn't in real rather than nominal dollars, making the cuts look even smaller?

I'm still not clear. Are we supposed to be happy or sad that the cuts are larger or smaller?

No, you're supposed to be angry at the chart.

You're supposed to be disatisfied and demanding more. You're supposed to be and are programmed by your masters to be angry at the chart for not doing enough.

But, see my comments later re how the the chart is deceptive.

You're being led to believe that a 16.5 to 17% cut in US discretionary spending is nothing.

Be a detective. See if you can figure why the 17% reduction in US discretionary defense and non-defense spending looks small by looking at the title of the chart. Ask what is included in the chart (for both revenues and expenditures).

Can we make the baseline bigger so the cuts will be more draconian?

Can we not just start the Y-axis at 40?

An interesting addition to this chart would be the projected cumulative deficit from 2012-2021. My sense is that it is between $7-9T, in other words, a little bit less than 20% of this total. Of course, the recent deal, which Roberts belittles, purports to reduce that cumulative deficit by a third, no?

How much of the residual difference is accounted for by troop and spending drawdowns from Afghanistan and Iraq, events which would be happening anyway?

You seem to be adopting Harry Reid's approach in factoring in the wind down of Iraq and Afghanistan as the contribution to debt reduction.

Anyway you do this, you should be consistent.

That would mean projected deficits were not as big as some one claim. You can't, after the game is over, come back and now claim: Well, we should've kept score a different way--when we are seeking what we want, we'll score it one way (overstating the projected deficit) and when we get what we want, we'll score it a different way so we can say it is smaller and didn't do enough.

Absolutely disgusting. How much of that spending will be borrowed? When will we get real cuts?

Bob,

Don't worry we only have a couple of years left before this whole financial system implodes under the weight of its own complete disconnect with reality. If we're lucky. I'm betting 2012 myself but it could be before then.

For example, these budgets with huge massive deficits all propose 4% real growth rates. A proposition beyond laughable. There all all the "off balance sheet" items, like worthless underwater Fannie and Freddie garbage loans. There is the end of market to market accounting for banks. Lies, lies and more lies. And people are starting to catch on.

Get your gold and silver now and in your physical possession. As the bullshit of the last three years is falling apart as we speak (look at spreads in Europe, for example, for the too big to bail Italy) soon people will realize, en masse, that they need to dump their central bank paper (printed faster and faster) for assets that are actually valuable. Once the masses figure it out, you won't be able to buy real money with your dollars any more than you could with Assignats, Z$, Reichmarks, Pengos or the rest of the parade of failed fiats.

What an ugly bar graph.

Who needs that eyesore to show just two numbers?

I laughed. It was a great thing to wake up to. It illustrates of the point, which is what charts are for over tables.

Alex, read this about the views of the NBER Business Cycles Dating Committee's members
http://www.bloomberg.com/news/2011-08-02/feldstein-recession-panel-members-see-rising-odds-of-a-renewed-u-s-slump.html
Given Tyler's post and your post, do Tyler and you share Jeffrey Frankel's view on fiscal policy as a force of contraction this year and the next one?

We were already on the verge of recession and in slow growth for much of this past year (ECRI). Something has to be the last straw at some point if there is a recession.

You might appreciate this video.

Got something to complain about this graph?

Good work Team.

We have successfully created a time warp and

Entered 1937.

E, Thanks for the link from Bloomberg.

"“The U.S. debt ceiling debate has, I think, really eroded confidence among consumers and businesses in addition to creating uncertainty,” Stock said in an interview. “The resolution of uncertainty with the compromise doesn’t restore with it the view of legislative competence in economic management.”

Cutbacks in government spending will be a drag on growth next year, said Jeffrey Frankel, another Harvard professor on the NBER committee. While recession risks have risen, they are “not necessarily enough to push the probability over one half.”

Stimulus Withdrawn

“The government is a source of contraction this year,” Frankel said. “Fiscal stimulus is being withdrawn at the federal, state, and local levels.”

Bill,

I would say that you can't claim anything worked in a recession that lasted 15+ years and presumably would have never ended without the World War (I don't believe that btw). So, perhaps what happened in 1937 wasn't good, but neither was the day before. Let's say there are two things going on at once. That's not out of the question. Cutting government spending is going to cause some contraction somewhere. However, it is also going to happen at the same time that variable #2 gets out of whack. So, it is both cause and effect. Certainty is what got us in trouble, kept us going too far down the wrong road, so some uncertainty when we realize we are lost is a fait accompli.

The only question is whether we would have been better off continuing stimulus last year when we knew state and local governments were going to cut this year.
Last year's debate is over. Obama didn't push for stimulus because he knew he couldn't get it.
We'll see how much monetary policy works.

FYI, I think Frankel is wrong. This fiscal year's deficit is huge and next fiscal year's deficit is huge. Frankel prefers to ignore two facts: (1) what happened to the budget for FY2011, and (2) why there is not yet a budget for FY2012.

Fiscal policy for FY2011 was determined last December by Obama's response to the past election --remember: he failed to have a FY2011 budget approved by a Dem-controlled Congress before the election. Fiscal policy for FY2012 has yet to be decided but Obama's failure to get any support last February from his party in Congress set the stage for the "debt ceiling" comedy.

More important, although Frankel and all textbook Keynesians would have to be happy with the large deficits of this and next fiscal years, they should complain about how the huge spending is wasted. They should be crying at the huge waste that the American government has become.

E. Frankel for some time has been calling for fiscal reform, tax and entitlement reform, so I unless you haven't been reading his works and other materials I do not think you can honestly make that statement.

Are you talking about his comments on Obama's attack of Ryan's proposal last April?

JEFFREY FRANKEL, ECONOMICS PROFESSOR, HARVARD'S JOHN F. KENNEDY SCHOOL OF GOVERNMENT, CAMBRIDGE, MASSACHUSETTS:

"It's balanced. It isn't as if anyone else has a plan. He did an excellent job of pointing out how it's simply not possible to eliminate the budget deficit by cutting foreign aid or Planned Parenthood or whatever. You have to take a broad approach and he explained all the different components."

"He was just specific enough to lend credibility to it."

"If he had come out any earlier with this level of specificity, he would have just been (attacked) for wanting to raise taxes. If he had waited any later, he would have lost the moment as so many people have been saying. Everybody was saying, 'Where's the leadership?'"
Source: http://www.reuters.com/article/2011/04/13/us-usa-budget-instantview-idUSTRE73C76L20110413

JF's reaction in that interview fails to ignore that at that time Obama did not present to Congress a second draft FY2012 budge (the first one had been rejected by both parties). In Congress they are still waiting for Obama to present a new draft FY2012 budget. How can you seriously say anything about fiscal policy this year and next year when the FY2012 budget has yet to be discussed?

E, Here's Frankel's weblog: http://content.ksg.harvard.edu/blog/jeff_frankels_weblog/

You'd enjoy reading it. It is technical and the guy is fiscally conservative. Sort of a Concord Coalition type person in my view.

As to Obama's budget, I'm sure you know the real story, but if the readers do not, then they should solve the game theory problem themselves by asking this question: if you are in a game where if you go first, and you know you will have to negotiate with someone who takes an extreme position to negotiate, hopefully, to the middle, where do you start, or do you have a strategy of waiting for for extreme player to go first and get hammered in upstate NY.

From the most read article at Vox today, one by Stiglitz:

"Regrettably, the financial markets and right-wing economists have gotten the problem exactly backwards: they believe that austerity produces confidence, and that confidence will produce growth. But austerity undermines growth, worsening the government’s fiscal position, or at least yielding less improvement than austerity’s advocates promise. On both counts, confidence is undermined, and a downward spiral is set in motion."

Project Syndicate, not Vox.

You're right that Austerity won't save our financial system. Nothing can. Get ready.

The problem with that argument is that gov't spending does not create long-term growth. If it did, we would all be flying the hammer and sickle at real GDP per capita of $100K.

The radical Keynesians who claim we can pile up >100% of GDP of debt with no consequences are not thinking rationally here.

It's a strawman from Stiglitz. It's a false choice. It's not about austerity. It's about changing from dumb investments to smart investments as quickly and with as little disruption to existing smart investments as possible.

There once was a country that thought it new how to make "smart investments" collectively better than individuals could. That country was called the USSR.

I would rather enter 1946.

You know, when we were reducing government spending from around 50% of GDP down to around 20% of GDP.

http://www.usgovernmentspending.com/us_20th_century_chart.html

The graph is misleading because the y-axis starts at zero. Start it at 40 to see how big the cuts really are.

The graph is misleading because it includes Iraq and Afghanistan, and when they are over,

We'll all be dead and gone.

Comment wins the thread!

I've been told that the cuts for 2012 aren't meaningful, so shouldn't we be looking at 2013-2021?

Anyway, I guess those are pretty big numbers.

By the way, is the graph "Government Discretionary Spending" OR is it All Government Spending, including SS and Medicare?

There's a big difference if its one versus the other.

Well, well, what do we have here, another example of a deceptive graph.

Figure it out yet.

Look at the title: All US Expenditures. That includes SS and medicare.

I went to the CBO website and pulled down the CBO letter to Boehner scoring the bill.

Here is the link: http://cbo.gov/ftpdocs/123xx/doc12357/BudgetControlActAug1.pdf See Table 1

TOTAL discretionary spending over the entire 10 year period using CBO baselines (wars in and out) came to 14,038 to 14,472 million.

Now, go to the graph on the website. Same period: $46 Trillion.

Figure it out folks: They created a graph showing TOTAL US spending INCLUDING SS and MEDICARE, and NOT a GRAPH showing CUTS of TOTAL US Discretionary Spending.

No wonder it doesn't look so big.

Next time they should use World GDP as the baseline.

You would think that if

Wow, there is no pleasing some people. A graph labeled "US Federal Government Spending," is called deceptive because it is US Federal Government Spending and not discretionary spending.

Not to mention that total spending is in fact the relevant category.

The graph should really just show the cuts themselves with and without the cuts. Then one could see that the cuts are 100%.

Or, the cuts as a percent of total discretionary spending over the ten year period.

Is it really so hard to be non-deceptive?

I think Tyler's next graph should be of how many complaints there are per graph. Then we can argue over whether it should be adjusted for complaint inflation, overall commenters per graph, number of links from other bloggers, etc.

Stuart,

If you are saying that the budget cut of US discretionary spending is SMALL, you should compare it to total US discretionary spending over the same period to see if it is.

Apples to apples, oranges to oranges.

Stuart: Ask yourself this question: IF ALL discretionary spending had been eliminated, what would the graph have looked like.

I occaisionally teach a graduate course on pricing in the graduate school. This is a good example of optical illusion. It is also an illusion to talk about one thing--cuts in discretionary spending--and show something else.

Good magic, not good policy.

What if what we're saying is that the cuts to discretionary spending are small in relation to the overall budget?

You know, like... what he actually said. Sheesh.

Dear Sheesh,

Show me the quote where Alex said this.

If you go to the Cafe Hayek article that he links too, he doesn't even say it.

So, show me.

Also, explain to me how the entire contents of Tabborcks post quoted in its entirety says it: "A big hat tip on this post to Russ Roberts who used the 10 year time frame to compare in this excellent post."

Sorry, can't give you a hat tip.

But the cuts are problematic because they are concentrated in discretionary spending. Stating that they are small in relation to the overall budget is disingenuous.

"According to the CBO baseline spending (go here, page 18), which I understand is the baseline for the cuts of $2.4 trillion, the Federal government will spend $46.1 trillion over the next ten years. "

Was it really that hard to find?

TallDave, Give me a link to where you are quoting.

Seriously? There is exactly one link in Alex's post.

Well, I suppose that sums up the futility of this exercise. Apologies to all those unfortunate enough to read through this for all the pixels wasted on this that might have been used instead to render an interesting, substantive debate.

Do you think total spending is some kind of imaginary number or something?

I had never heard of Joe Nocera, but now I know that he is a vile, useless unreadable man. So thanks for that.

And I'd appreciate it if anyone who comes up with a "Fiscal Forecast For the Next Ten Years" would lodge it deep within their large intestine instead of sharing it with others. Anything beyond 12 months is laughable. I'd love to see the 10-Year Forecast they had in coastal Japan last summer, or New Orleans in 2004, or lower Manhattan in 2000, or Kuwait in 1989, or Poland in 1938, or San Francisco in 1905....

Oh, but if we do have a California earthquake, we can be grateful to have a straightjacket in place so that we cannot assist.

Yes, why can't the Tea Baggers think of the California earthquake victims. These heartless people(racists) remind me of other heartless people(Hitler) who just won't think of the children.

Now, I just assumed that a government that takes in over $2T/yr would have some place in there for natural disasters that hit from time to time. Hell, I think we've got at least one whole agency devoted to such things along with state agencies, a National Guard, and charities supported by the generous American people. But when we say enough is enough, as in, deficit financing for over $1T that doesn't exist and can't be confiscated is enough, then people like you start weeping and gnashing their teeth over the budgetary "straitjacket."

You need to face a basic fact about social democratic government:

"Enough" is never "enough."

One billion isn't enough. 100 billion isn't enough. 900 billion isn't enough. Two trillion isn't enough.

It's not enough for granny's dialysis. Not for voting booths in Afghanistan. Not for dad's pension. Not for the starving Ethiopians. Not for the future Mozarts and Einsteins languishing in urban school districts. Enough of other people's money is never, ever enough.

Because you and everybody else will spend every penny of other people's money on your pet causes, pet crises, pet social engineering. And now that other people are moving themselves and/or their money offshore, working under the table, taking the poor man's early retirement (i.e., spurious disability claims), you just can't grow up and face facts: we have run out of other people's money.

Exactly right re: fiscal forecasts. A complete joke, and if you look at past projections from 2-3 years ago and their laughably optimistic projections for 2011 spending / deficits you'll understand how fast the water is rising up to our collective mouth.

Tyler is losing some credibility by digging in his heels about the not-very-good chart from a few days ago. His overall point was defensible, and he should have just admitted that the chart was dumb but his general analysis was still fine.

For me, the appeal of Tyler's style is that it's vaguely libertarian but he's willing to be convinced/entertain contrary evidence. In other words, he's not trying to score debating points, and he doesn't pick his conclusions first and then search out all the evidence/arguments he can find in their favor later, no matter how weak. That approach does not really characterize some of his more recent posts, however.

The complaints about the chart were much, much dumber than the chart.

TallDave,

Do you think a cut of 16.5% to 17% of US discretionary spending a cut that is reflected in the graph?

Perhaps, if you answer yes, the comments, as you would say, are "much, much dumber than the chart."

The graph isn't of discretionary spending, which is why you don't see the word "discretionary" in the title of the graph.

So, your complaint is that the graph doesn't show something the graph is not supposed to show, and that you would like a different graph that shows something you want to see.

Thank you for an excellent illustration of my point.

No, my complaint is that the graph is presented to show the effect of the budget cut and includes medicare and social security. Since neither of those programs are cut, and constitute approx 50% of the budget, to give the impression spending was not cut is misleading.

I am sorry that you do not see it this way, but all I can do is point out what I see and hope that this would engage a discussion on why the budget cuts are large.

Since neither of those programs are cut,

Yes, that was the point of this graph. No, there is nothing misleading about showing they were not cut.

If you do the math based on Alex's chart, the difference between bill and no bill is $2.4 trillion.

Total US discretionary spending over the ten year period was projected to be $14.038 trillion to $14.472 trillion, depending on how you handle wars.

Total cut as a percent of US discretionary spending: 17% to 16.5%.

Does the graph on this page show you that roughly 16.5 to 17% of total US discretionary spending will be cut?

Bill,
My wife spends too much on clothes. She showed me a graph on how much she has cut down on shoes. I feel much better now.

Tom, So, you are saying that the US discretionary (defense and non-defense) spending is comparable to your wifes shoe account.
Pity you.

Actually, that's not what he is saying at all.

Jim, I agree, but what Tom is doing is a composition fallacy. Let me explain.

In your mind, your wife's shoe budget is .000001 percent of your total budget.

US defense and non-defense spending is not .000001 percent of the total US budget. OK.

The defense and non-defense discretionary spending is THE budget Congress votes on every year because it leaves SS and medicare untouched.

So, if you believe the total US defense and non-defense spending is small and unworthy of your attention, it does not matter if you vote the next election cycle because, afterall, its only a pair of shoes.

Better: My wife spent $50,000 on clothes last decade. She was originally planning to spend $100,000 this decade, but I talked her into only spending $98,000. Good cuts, eh?

How silly. Those shoes are already made. Now we have surplus shoe capacity due to your weak demand. We need to build a bridge now. Thanks a lot.

How about this:

Your salary is 100K.
Your credit card interest is 6K.
Your sick mother's nursing home costs 20K.
Your 401K contributions are 20K.
Your bodyguard cost 20K.

You have 33K left over that you have the liberty to spend. Your wife just cut that by 5K. Are you feeling pissed yet, buckaroo?

I'm pretty sure I'm going to be arrested for tax evasion.

Looks like a pretty big cut. With one deal, they've eliminated over 5% of government spending for the next decade.

Bill,

Government spending has increased from 2.9 to 3.8 trillion dollars from 2008 to 2011. The linked article suggest that the average budget over the ten year period will be over 4 trillion. The plan doesn't suggest we return to pre-recession spending levels. It just suggest we slow the growth rate after a massive surge over the last three years. I know that these numbers are nominal dollars, but given the current miniscule rate of inflation, how can anyone look at that and think these are massive cuts? (and if inflation picks up then I suspect all these numbers will go out the window anyway)

The point I get from these charts is that these cuts ended up being fairly minor in the total scheme of government spending over the next ten years. Now, if you believe that they were small, but misplaced and that budget cuts should have been focused on mandatory spending instead of discretionary that's okay. But that's not the same as saying that these are draconian decreases in government spending, because they are not.

JohnE,

As Bill Clinton would say, it depends on how you define spending.

I think you make my point when you say: "The point I get from these charts is that these cuts ended up being fairly minor in the total scheme of government spending".

If you define "spending" to include SS and medicare, you see one thing; if you define spending not to include, you see another. So, ask yourself this question: Do you think that SS or medicare expenditures will be eliminated over this time. If you are honest, you would say no. Then, look at what is left--that is the total budget of defense and non-defense spending--the spending that you elect your congresspersons to vote on each year.

Now after considering that SS and medicare will not disappear: Can you truthfully make this statement: "The point I get from these charts is that these cuts ended up being fairly minor in the total scheme of government spending"

I await your answer. Remember, this is a cut of 16-17% of total defense and non-defense spending, excluding SS and medicare.

My response is that the government rarely (never?) does something that nobody wants. There are always constituencies for its spending. If you cut spending in ANYWAY there will be someone who says that whatever program you cut was a worthy program and deserved government funding. Unfortunately, spending on government programs are not independent of each other. There is a finite amount of resources the government can allocate and those resources must be allocated according to priorities. Is SS or medicare more important then education spending? If we cut education spending and preserve SS and Medicare the obvious conclusion is: YES. If all the cuts are made to discretionary spending and not to mandatory spending (a significant mistake imo, but...) then we through our representatives are saying that entitlement spending is more important to us then these other things.
None of that changes the fact that there is a limited pool of resources (current gdp) and the government is spending a substantial amount more of that pool now then it did three years ago.

Discretionary spending increased by over 25% (in real dollars*) from 2007 to 2010. Now we're talking about decreasing its expected growth rate to a cut of 16-17%. And that's a cut in growth, at the end of the day we'll still be spending the 25% real increase from the last few years + the future nominal increases, its just that the increase will be smaller then previously planned.

To answer your question directly: yes, after seeing that I still don't see these cuts as being a draconian decrease in government spending but minor cuts at best.

Do you still insist these are draconian cuts in government spending?

*a quick google of discretionary spending found: http://www.heritage.org/research/reports/2010/06/federal-spending-by-the-numbers-2010 which is where I got the real dollar discretionary spending numbers.

John, I think you have framed it well and honestly. To have a debate, that is what you need: an agreement about what you are cutting and the magnitude of it.

Hat tip to you.

Funniest comment thread ever? And even funnier if you recall that this chart is assuming Medicare cuts.

It assumes medicare cuts IF they cannot cut 16-17% from total defense and non-defense discretionary spending. The total cuts don't change, just the composition. I take it you are assuming that they will not cut total discretionary and non-discretionary spending by 16-17% because you think it is too much?

Bill: no, it assumes the health care bill cuts take place.

Bill,

Though I am all that sure I should help you here, but you are making a complete fool of yourself with these idiotic complaints about the various charts and graphs. Now, if your complaint is that the cuts are too much from the discretionary budget and should be spread out into the mandatory budget, too, then say so (hell, I might even agree with you). If your complaint is that the cuts are too much no matter where in the budget they come from, then your complaint about this graph is even sillier than it seems.

Yancey, As you said "you are making a complete fool of yourself with these idiotic complaints"

I am not deterred by your characterization.

Free speech and all that.

Yancey, I take it that you agree that the cuts are too much from the discretionary budget and I will leave it at that point of agreement. That was the 98% of what you wanted.

Yancey,

By the way, my pointing out the zero axis problem previously, and todays chart (I didn't care for the nominal or real debate as it didn't matter so long as you were consistent), is that it seems to me mistating the magnitude of the cuts to discretionary spending in order to press for more.

They ignore the cuts are only of discretionary defense and non-defense spending, and they ignore that they are 16 to 17% of that spending. And, they seem to think 16-17% cuts are nothing because the gov'ment mispends by that magintude every year or more.

They can have their beliefs, but it will be interesting to see how they will find 16 to 17% of discretionary defense and non-defense spending to cut come November.

Here is one persons take:

"The bill has a mechanism that just might in November demonstrate to the arithmetically innumerate that it is literally impossible to eliminate the budget deficit if the cuts are to come primarily in discretionary non-security spending. Instead, military spending, entitlements, and tax revenues will have to be part of the eventual solution — as also favored by the American people in polls, even a majority of Republicans. This epiphany on the part of the people who are described as die-hard fiscal conservatives is needed before we can break the political log-jam. A solution is not possible so long as the extremists are under the mistaken belief that the deficit can be eliminated with cuts concentrated in domestic discretionary spending and so long as they have veto power in the eyes of the Republican leaders.

The mechanism is to force Congress to confront an unpleasant but clear choice between (i) on the one hand, deep automatic cuts that hit defense, which are anathema to most Republicans, and Medicare, which are anathema to Democrats, and (ii) on the other hand, the more thoughtful recommendations of a bi-partisan Joint Select Committee on Deficit Reduction, which would certainly spread out the pain more to include increased tax revenues, anathema to Republicans, and other entitlement cuts, anathema to Democrats. The 12-member panel is to report its recommendations in late November, and the Congress is to vote on them in December. This mechanism is of course crude, but may be just the sort of thing we need to force individual congressmen to confront arithmetic.
Some have asked how this panel will differ from the ill-fated Simpson-Bowles commission. A critical difference is the requirement that the Congress must vote up-or-down on the recommendations. (This was also a feature of the original version of what became the National Commission on Fiscal Responsibility and Reform; but the provision was voted down by Senate Republicans, including some who had sponsored the proposal until President Obama came out in favor of it in January 2010.)" Link here: http://content.ksg.harvard.edu/blog/jeff_frankels_weblog/

We'll see how long before reality sets in, but in the meantime, you should know, that the 16% cuts are coming, regardless of what base you include in your chart.

I am unsympathetic to the y-axis complaint from the other day in any case. People are free to imagine the rest of the graph, and if they are too stupid to do that, then why in hell should anyone give a damn? As for this entry, all you had to write was that the cuts are all from the discretionary budget, and that was a bad thing overall. You did not have to go on and on and on claiming that Tabarrok or Roberts were producing a misleading graph. Their point was the the cuts from total government spending were minor. They simply don't agree with you that where the cuts came from matter all that much in the scheme of things, and they are free to make that point without being accused of malfeasance.

Bill, all government spending is discretionary. The folks who would compare 46.1 trillion to 43.7 and say that the cut was miniscule tend to think that the US gov't spends too much in general. They're not keen to support the idea of part of the budget being "untouchable" while another part can be voted on every now and again.

By the way, this graph says what it is and is what it says. If you can work that into "deceptive", we simply don't speak the same language.

Yancey's point about imagining the rest of the graph is a good one. Too many people think to themselves, "the author tried to exaggerate the point. Therefore, there can be no point."

Yancey,

Where I differ with you is that I think people, when they look at this chart and the difference, without considering much more, get the impression that this is not much of a cut.

What they fail to consider is what is included in the base. Once they consider what the chart is, and is not, then we got a different discussion of whether the cuts are too big, or should be taken somewhere else, or spread out etc. What interests me, frankly, are the comments that a cut of 16% of discretionary defense and non-defense spending is not enough.

Bear in mind that the 16% cut is relative to the CBO baseline, which is somewhat arbitrary. I don't mean that the CBO was pulling numbers out of a random number generator, but rather that the CBO baseline was itself a significant increase over typical levels of discretionary spending over the recent past. The value of the CBO baseline is that is in reference to something (current law), not that is was ever realistic or even meaningful. It's like book value accounting - it may bear no relationship to the actual value of an asset, but we all can agree on how we got there.

In 2008 discretionary spending was around $1.14 trillion and I think that was a 3% bump from the previous year. Was life so intolerable in 2007 or 2008 that cutting modestly from that level would be unthinkable? When I consider that the Department of Education is probably something north of $500 billion of discretionary spending and it does absolutely nothing of value as near I can tell, I don't really believe that the cuts are going to hurt that much.

If only they could read the title of the chart, they would know this is the total budget. But unfortunately for him, the person in your example is tragically illiterate.

I blame our public schools.

Readers can decide whether, after disclosure that the cuts were 16-17% of discretionary defense and non-defense spending, they look small or not.

If you would rather they not be told what the charts do not disclose, or how their disclosure tilts you one way or the other when you don't consider other facts, thats your choice but not mine.

Ridiculous. They only need to read the title to know what it discloses and doesn't.

It also doesn't disclose (for instance) that federal spending has doubled since 2001. I imagine that's not a source of outrage to you. Neither do I imagine the fact a graph that only showed discretionary spending would fail to disclose the total budget is a source of concern.

This chart would be much more informative if it included information on expected revenues.

Ok, so we spend $43 trillion over 9 years. If the govt brings in $100 trillion in revenue over the same 9 years (obviously not, but still) then there is no problem.

Duh.

Wow. Really the most disturbing thing on this graph is the use of a "baseline." I guess it's even more disturbing that everyone just goes along with it. Will the government spend more money next year than this? Yes. And in 2013 then in 2012? Yes. What kind of cut is that? Fraud. There isn't anything anywhere in sight that remotely approaches a "cut" in a world where 2+2 is still agreed to equal 4. Lemmings.

Considering that the base includes social security and medicare, and that the baby boom will be retiring over this period, and since you define spending to include ss, what did you expect? Was it any demographic surprise that there would be a large retiring generation? If you knew it was coming, was it such a smart idea to run $6 T in deficits from 2001-2007?

Your response assumes there is a mandate for certain spending when there is none. That is exactly my point. I could rephrase your reply as "surely, you don't mean to cut SS or Medicare, do you?" But, of course, there is nothing that would make me happier than to cut the benefits of current SS recipients by a modest 5% to help balance the budget.

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