Mark Thoma’s spending cuts

Here is a Mark Thoma comment on my recent column, here is the introduction:

I’m all for more cuts to defense too, but it’s only fair to note that some cuts have been made there already.

Also, why are only spending cuts mentioned when the discussion is the budget? Please don’t tell me that if it’s not spending cuts, i.e. if it’s a tax increase, it doesn’t count for budget discussions (and Keynesian economics, which is part of his discussion, does not make this distinction). Thus, note also that the American Taxpayer Relief Act (ATRA) added another half trillion in deficit reduction. Together, the $1.5 trillion in appropriations cuts, plus the $.5 trillion in tax increases in the ATRA, plus the $300 billion in interest savings amount to around a bit over $2.3 trillion in deficit reduction…

Not once in Mark’s post does the word “baseline” appear.  In fact I covered the defense “appropriations cuts” in my piece, noting that relative to baseline, even with the sequester (much less without) defense spending is roughly constant in real terms.  Mark simply doesn’t recognize I made that point but instead portrays me as oblivious to the issue.  (Additional comments from Angus here).  I don’t see that as much evidence for our fiscal rectitude.

Or let’s look at the bigger picture of the back and forth.  Take Mark’s sentence: “Also, why are only spending cuts mentioned when the discussion is the budget?”, after which he refers to tax increases.  My very last column I called for tax increases, a bit now and more later.  Mark covered that column.  What was Mark’s reaction then?  He complained that I didn’t also call for rectification of the content of government spending decisions and income shares, in both cases toward greater egalitarianism.

I see Mark as falling into a bad habit here, namely he encounters a specific argument which makes him uncomfortable and then looks around for reasons to reject or downgrade the source of that argument, rather than focusing on the argument itself.

Mark also accuses me of being ideological.  That’s in the eye of the beholder.  In this week’s column I called for cuts in farm subsidies (or abolition), Medicare, and defense, and switching out of any possible cuts in infrastructure or support for basic research.  That’s pretty close to the consensus of economists.  Elsewhere I’ve called (repeatedly) for significant increases in science funding and the fixing of LaGuardia airport, among other infrastructure projects.  In the column I argue that there are both demand-side and supply-side reasons for drawing the distinctions I do between which parts of spending should be boosted and which should be cut.  I argue that Keynesian economics is valid if applied correctly.  Ryan Avent, not a member of the Tea Party, says he has “some sympathy” for my views on the sequester.  I don’t doubt that I am to the libertarian side of Mark, but if he finds that all too ideological, and worthy of a calling out, I think he is skating at a margin where he will find it very difficult to learn from the people who disagree with him.


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