Category Archives: Economics

Business, Economics, Media Criticism, Political Commentary

The President’s “Default”

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There’s no reason to default, even without an increase in the debt ceiling:

Failing to cut Social Security checks does not constitute “default.” Neither does withholding checks intended for bureaucrats, veterans, or contractors. In the context of the federal government, “default” means a failure to make good on your debt-service payments. Our interest payments run about $30 billion a month, easily paid out of the roughly $3 trillion (or $250 billion a month) in revenue the federal government is expected to collect this year. You can do rather a lot with $3 trillion a year, but not as much as you can do with $3 trillion a year and a limitless line of credit. There certainly is no reason to default on $360 billion in interest payments when you have $3 trillion in revenue.

What can you do with $3 trillion a year? You can have Social Security ($880 billion), Medicare/Medicaid/HHS ($940 billion), Department of Defense and additional war spending ($672 billion), Veterans’ Affairs ($140 billion), NASA ($18 billion), Homeland Security ($55 billion), Transportation ($99 billion), Commerce ($9 billion), the Army Corps of Engineers Civil Works ($8 billion), Interior ($13 billion), State and international aid ($59 billion), Justice ($36 billion), the Small Business Administration ($1.4 billion), the EPA ($9 billion), the National Science Foundation ($7.5 billion), the Department of Energy ($33 billion), and the FDA ($4.5 billion) — and still have enough money to triple the budget at the National Park Service, because people love Yogi Bear and Booboo. Yeah, you’d have to close down the Department of Education, which does not one useful thing, and downsize the Treasury Department, perhaps even to the radical extent of shutting down its Healthy Food Financing Initiative (my apologies to the first lady), sell off the housing projects and close down HUD, and a few other things. I know, I know: radical austerity.

Rather, you could do all of that on $3 trillion — if you didn’t have $360 billion in payments on interest from past spending weighing down the budget. But since you do, take away the State Department and international relations, Homeland Security, Energy, Justice, NASA, DOT, Interior, Commerce, Civil Works, EPA, NSF, and SBA, say goodbye to the national parks and the guys who maintain our nuclear arsenal — all to finance past spending excesses.

Put another way, $3 trillion a year in revenue gets you federal spending at 2008 levels plus a small surplus. Not savage austerity, not the Hobbesian state of nature, not Somalia. That is what we are talking about in the debt-ceiling debate. Republicans are being criticized because they are demanding some modest spending cuts in exchange for raising the debt ceiling. But refusing to raise it at all would simply necessitate balancing the budget at pre-Obama levels of spending. Of course, the deficits we have run since then mean that about $100 billion more of that spending will have to go toward debt service in 2013 than in 2008. We are spending on spending.

And as the president used to claim to believe, before he doubled down on the spending, it’s “unpatriotic.”

Business, Economics, Education, Media Criticism, Political Commentary, Social Commentary

Affirmative Action

The sad irony:

The biggest change since Grutter, though, has nothing to do with Court membership. It is the mounting empirical evidence that race preferences are doing more harm than good — even for their supposed beneficiaries. If this evidence is correct, we now have fewer African-American physicians, scientists, and engineers than we would have had using race-neutral admissions policies. We have fewer college professors and lawyers, too. Put more bluntly, affirmative action has backfired.

As do many “progressive” policies. And it’s sometimes not clear what the real intentions were.

Business, Economics, Health, Media Criticism, Political Commentary, Science And Society, Technology and Society

Starving People For A Green Ideology

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…for a green ideology, and corporate greed:

…many worry that Guatemala’s poor are already suffering from the diversion of food to fuel. “There are pros and cons to biofuel, but not here,” said Misael Gonzáles of C.U.C., a labor union for Guatemala’s farmers. “These people don’t have enough to eat. They need food. They need land. They can’t eat biofuel, and they don’t drive cars.”

This isn’t a market failure. It’s a deliberate distortion of markets through government policy. In some sense, it’s almost as criminally egregious as the behavior of the British during The Hunger in Ireland.

Economics, Media Criticism, Philosophy, Political Commentary, Social Commentary

Communism

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…and fascism:

One of the features that distinguished Bolshevism from Tsarism was the insistence of Lenin and his followers on the need for a complete overhaul of society. Old-fashioned despots may modernize in piecemeal fashion if doing so seems necessary to maintain their power, but they do not aim at remaking society on a new model, still less at fashioning a new type of humanity. Communist regimes engaged in mass killing in order to achieve these transformations, and paradoxically it is this essentially totalitarian ambition that has appealed to liberals. Here as elsewhere, the commonplace distinction between utopianism and meliorism is less than fundamental. In its predominant forms, liberalism has been in recent times a version of the religion of humanity, and with rare exceptions – Russell is one of the few that come to mind – liberals have seen the Communist experiment as a hyperbolic expression of their own project of improvement; if the experiment failed, its casualties were incurred for the sake of a progressive cause. To think otherwise – to admit the possibility that the millions who were judged to be less than fully human suffered and died for nothing – would be to question the idea that history is a story of continuing human advance, which for liberals today is an article of faith. That is why, despite all evidence to the contrary, so many of them continue to deny Communism’s clear affinities with Fascism. Blindness to the true nature of Communism is an inability to accept that radical evil can come from the pursuit of progress.

And like “progressive,” “progress” is in the eye of the beholder.