The Center for Budget and Policy Priorities says I'm wrong. Donald Trump's "Penny Plan" wouldn't cut domestic spending by 25 percent. It would cut it by 29 percent.

Oh well, what's a few percentage points among friends? Either way, the question is: What is Trump going to cut? He'll never, ever tell us, of course, but I thought I could help everyone understand a bit better what we're talking about here. The big ticket items in the budget are defense and the big mandatory domestic programs (Social Security, Medicare/Medicaid, SNAP, interest on the debt, etc.). That's about 88 percent of the budget. The 12 percent that's left over is domestic discretionary: the FBI, NASA, courts and prisons, and so on. This is the part that Trump wants to cut.

Roughly speaking, what Trump wants to do is slice about $150 billion out of these programs. I can't create one of those fancy tools where you get to create your own budget, but I can at least give you a sense of where this money goes. It's in the chart below (all numbers are approximate). So have at it. Cut $150 billion and create your very own Trumpian budget.

MoJo's editor-in-chief is in trouble over this tweet:

Now, you'd think that because Clara is my boss, I'm going to defend her over this. But I'm not! Not totally, anyway. Let's break down what's actually going on here.

First, Atrios is upset because he doesn't like criticism of young people. Why? Beats me. As near as I can tell, millennials don't actually attract any more abuse than any other age cohort. I'm not sure why they should be any more immune to criticism than anyone else.

Second, and more important, this poll result seems like a bit of an outlier. On average, other polls seem to show Johnson and Stein getting about a quarter of the millennial vote, not 36 percent. What's more, a lot of that is coming from Trump voters. Defecting millennials seem to be split nearly evenly between lefty Clinton defectors and center-right Trump defectors.

That said, Clinton is clearly doing worse among millennials than Obama did four years ago. But it's a very restricted group of millennials. Over at 538, Harry Enten lays out some survey data which suggests that virtually all of the defection is in the 18-24 age group. Older millennials are supporting Clinton at about the rate you'd expect.

So what's the deal with this very young age group? Here's where I part from Clara: I reserve most of my frustration for Bernie Sanders. He's the one who convinced these folks that Clinton was in the pocket of Wall Street. She gave a speech to Goldman Sachs! He's the one who convinced them she was a tool of wealthy elites. She's raising money from rich people! He's the one who convinced them she was a corporate shill. She supported the TPP! He's the one who, when he finally endorsed her, did it so grudgingly that he sounded like a guy being held hostage. He's the one who did next to nothing to get his supporters to stop booing her from the convention floor. He's the one who promised he'd campaign his heart out to defeat Donald Trump, but has done hardly anything since—despite finding plenty of time to campaign against Debbie Wasserman Schultz and set up an anti-TPP movement.

There's a reason that very young millennials are strongly anti-Clinton even though the same age group supported Obama energetically during his elections—and it's not because their policy views are very different. A small part of it is probably just that Clinton is 68 years old (though Sanders was older). Part of it is probably that she isn't the inspirational speaker Obama was. But most of it can be laid at the feet of Bernie Sanders. He convinced young voters that Hillary Clinton was a shifty, corrupt, lying shill who cared nothing for real progressive values—despite a literal lifetime of fighting for them. Sadly, that stuck.

Donald Trump released a fancifully-named "fact sheet" today about his economic plan. He says it's going to be great!

Trump has clearly internalized the lesson of PT Barnum: if you're going to lie, you might as well lie big. So why not say his tax plan will create 25 million jobs? Hell, why not a hundred million? Today's announcement is a shiny new tax plan that's apparently scaled back from his old tax plan, but the Tax Policy Center figures that even Trump's old plan would likely create no jobs at all because its huge deficits would outweigh the impact of its tax cuts. Even the conservative Tax Foundation, after waving some dynamic scoring pixie dust around, could only bring itself to suggest it might create 5 million jobs. (All of these numbers are over ten years.) Since the new plan is smaller, its impact would be smaller too.

As for "unbridled" economic growth, Trump's team actually means 3.5 percent growth per year for a decade. This is equally ridiculous. The TPC figured Trump's old plan would likely have no impact on growth at all. And once again: since the new tax plan is smaller, its impact will be smaller too.

But there are a few things that everyone agrees on. Both TPC and the Tax Foundation say that Trump's plan would blow up the deficit. The old plan was a $10 trillion budget buster, while the new plan apparently clocks in at about $4.4 trillion. As for who benefits, both agreed that under Trump's old plan the biggest tax reductions go to the very rich. The chart on the right is from the TPC, which figures the poor would gain about 1 percent while the top earners would gain about 21 percent. The Tax Foundation is on the same page. Even after they spray the pixie dust around, the rich still do far better than the poor. I gather that the new plan doubles the standard deduction as a way of throwing a bigger bone to the poor and middle class, but the odds are slim that this will make up for Trump's huge giveaway to the rich.

What else? Trump, of course, wants to do away with all sorts of environmental rules. In fact, those are pretty much the only rules he wants to get rid of. Except for this one:

The FDA Food Police, which dictate how the federal government expects farmers to produce fruits and vegetables and even dictates the nutritional content of dog food. The rules govern the soil farmers use, farm and food production hygiene, food packaging, food temperatures, and even what animals may roam which fields and when. It also greatly increased inspections of food “facilities,” and levies new taxes to pay for this inspection overkill.

So that's that. Our food supply has been so trouble free lately that Trump figures we can just do away with the FDA "police" who are constantly whinging on about hygeine and storage temperature and other nonsense.

Finally, Trump introduces his "penny plan": a reduction in non-defense spending of 1 percent per year for ten years. You will be unsurprised to learn that this is a trick: it's not adjusted for inflation. Trump says that over a decade his plan will reduce domestic spending from $518 billion to $468 billion. But if you account for inflation over the next decade (I used 2 percent per year as a guess), this produces a whopping cut of 25 percent in domestic spending. I am very eager to hear which quarter of our domestic spending Trump plans to cut.

But I'm not holding my breath.

POSTSCRIPT: By the way, even if Trump did somehow cut a quarter of domestic spending, that's $130 billion. He's got about $310 billion to go if he wants his spending cuts to match his tax cuts.

POSTSCRIPT 2: I know none of this matters. It's math! Math is hard! And nobody believes that Trump is serious about all this anyway. It's just random words on a page to show that he's presidential. Still, it's what I do.

Is Donald Trump's lack of transparency really not hurting him?

That's true. But what's remarkable is that after over a year of nonstop campaigning, Trump's negatives have barely budged. The reason they're high is that Trump was famous before he ran for president and lots of people had pegged him for an asshole all along:

Over the past twelve months, both candidates have seen their unfavorables rise, but only slightly and by about the same amount. It's almost as though campaigns don't matter at all.

Barack Obama and the "Post-Racial" Myth

Meghan Daum today:

It sounds laughable now, but remember back when we thought a black president portended a “post-racial society”?

Daum goes on to make a point about a post-sexist society, which I think we all agree isn't going to happen anytime soon. "Is there a woman on Earth who could check enough boxes to make people think, even for a fleeting and foolhardy second, that a post-sexist society was possible?" Daum asks. Indeed not. But what I'm curious about is her contention about Obama. Back in 2008, did anyone really think that an Obama presidency meant that a post-racial society was just around the corner?

This is a serious question. I have a bad memory for this kind of thing, and that's on top of the fact that I tend to filter out obvious political hyperbole. Presidential candidates are always blabbing on about how great America will be if they're elected, but I never take this kind of rhetoric seriously.

So then: were there really lots of people who thought Obama was a harbinger of a post-racial society? Not just "it's a turning point in American politics," or "we should be proud," or any of that. I'm talking about people claiming that his election genuinely represented America coming to terms with its racist past and becoming truly colorblind in the future. Who were these people? And what do they have to say for themselves today?

What Is Donald Trump Hiding?

From the Washington Post:

Trump remains the least transparent major presidential nominee in modern history. He is the first since 1976 to refuse to release his tax returns. He has declined to provide documentation of the “tens of millions” of dollars he claims to have donated to charity. He has yet to release a comprehensive accounting of his health. And, while Wednesday’s letter about Melania Trump’s immigration from her home country offers a few new details, there is no documentation to back up the claims.

In summary:

  • Trump says he's a billionaire, but refuses to release his tax returns to prove it.
  • He says he's a brilliant businessman but refuses to release any corporate financials to prove it.
  • He says he gives millions to charity, but refuses to release any records to prove it.

In the end, though, he gets away with this because everyone sort of assumes he's just bullshitting about this stuff anyway. That's too bad. It's pretty obvious that these records would put Trump in a bad light, and the reason he doesn't release them is that he figures the hit from being non-transparent is less than the hit he'd take from voters knowing the truth. He's almost certainly right about that, but only because he's not really taking much of a hit from being non-transparent. The only way to force candidates to be accountable is to hold their feet to the fire if they aren't, and this just isn't happening with Trump.

Sam Wang Wants Everyone to Settle Down

Polling guru Sam Wang thinks you're all being ridiculous:

My reason for generating the best prediction I can is to reduce the noise of campaign news. I thought it would clear mental space for thinking about policies, or downticket issues....The calculation says that Clinton’s win probability is 90%....Still, the comment section is still peppered with anxious questions about Clinton’s chances. Honestly, some liberals can be total ninnies.

When he's right, he's right, amirite? We really can be ninnies sometime. So go read Sam. Longtime readers know that although I normally post snapshots of the race from Pollster—mainly because they produce pretty pictures that are easy to manipulate—Sam is my go-to pollster. If he says Hillary Clinton has a 90 percent chance of winning, then she's got a 90 percent chance of winning.

So let's clear some mental space for downticket news. How are things going in the House these days? Jonathan Bernstein reports:

We’re about to see if House Republicans have learned anything in the last few years. That is, we’ll see if the small group of radicals can bully mainstream conservatives into casting irresponsible and counterproductive votes on two measures.

First, the House Freedom Caucus zealots are intent on forcing a vote this week on impeaching the Internal Revenue Service commissioner, John Koskinen. Even if they had a case against him — and they don’t — it’s an abuse of their power to go through with an impeachment procedure with no chance for a conviction in the Senate, and with limited time before the end of the current Congress.

Then sometime before the end of the month, the House will need to bring up a bill to keep the government running after the current fiscal year ends on Sept. 30. Since it has run out of time to pass regular appropriations bills (none have been sent to Barack Obama so far, even for a veto), the House will need to pass a “continuing resolution” to give itself more time....The obvious compromise, and one the Senate appears to be working toward, is a continuing resolution....But the House Freedom Caucus members will oppose any continuing resolution that doesn’t give them 100 percent of what they want.

For mainstream conservatives, both the impeachment decision and the continuing resolution will be tough votes. Though there is nothing substantive to be gained by voting with the radicals, it requires standing up to them and risking being called a “moderate” or “RINO.”

The Koskinen impeachment is completely ridiculous, nothing but a sop to the fever swamps. The budget bill, on the other hand, is the primary duty of the House—as Republicans are constantly reminding us. If Paul Ryan stands up to the zealots, he can easily get enough Democratic votes to pass a reasonable continuing resolution. But will he?1

1Probably not.

Over at Wonkblog, Carolyn Johnson writes about a new Kaiser study showing that deductibles have skyrocketed over the past few years:

During the past five years, deductibles have grown 10 times faster than inflation and nearly six times faster than wages, according to the new report....For the first time, employer-sponsored health plans also reached a new benchmark: Half of all workers who receive insurance through their employers faced a deductible of at least $1,000 a year for individual coverage — up from just 10 percent of workers in 2006,

"We've been so fixated on the Affordable Care Act, we've missed a gradual sea change in what health insurance is for most Americans," said Drew Altman, president of the Kaiser Family Foundation. "It's why, if we were ever to tell an average person that we’re living in a period of historic moderation in health care costs, they would probably think we’re out of our minds — because what they pay out of pocket has been going up over time....That’s kind of the pain index for people."

This isn't quite right, I think. Deductibles have gone up, but total out-of-pocket spending hasn't. Here's what personal spending on medical care looks like:

There's nothing fancy here. Out-of-pocket spending comes from the National Health Expenditure Accounts. Premium cost is an average of the worker share of single and family premiums from the Kaiser Family Foundation. Both are adjusted for inflation using the CPI.

The worker share of premiums has gone up considerably since 1999. However, out-of-pocket costs have stayed remarkably stable. Deductibles may be going up, but the amount people actually spend on medical care out of their own pockets hasn't.

Despite this, I think Altman is basically right. What's happening is that higher deductibles are making people far more aware of health care costs. They feel like they're constantly weighing whether or not to skip something their doctor recommends. Or they're shopping around for a better price. Or spending the money but then having to pay the bill. This makes them feel pinched even if, in the end, they're spending the same amount as always.

On a national level, the growth rate of health care costs has eased off considerably. But on a personal level, that's invisible. Premiums really are going up a lot, while high deductibles make OOP spending seem like it's rising even though it isn't.

So what's the direction of causation? Is the worker share of premiums going up because companies can't afford ever higher health care costs? Or is the growth rate of medical costs leveling off because consumers are getting pinched and starting to fight back? Yes and yes. Which is just another way of saying that medical costs will continue to rise until, collectively, we're not willing to spend any more. We're not quite there yet, but I don't think we're very far off.

The eternal wait for Donald Trump's "pivot" for the general election has become something of an inside joke among campaign reporters. People keep saying Trump will pivot any day now, and then he turns right around and says something typically Trumpish that makes it clear he has no plans to ever change.

But the other day it struck me that while we were all mocking him, he did pivot. Sure, a Trump pivot is like a battleship pivot, and it takes a while to make the turn. That's probably why we haven't noticed. But ever since he hired Steve Bannon and Kellyanne Conway, he really has calmed down on the stump and changed his persona. Today, Monica Langley of the Wall Street Journal takes note:

The new team, said supporters, has fostered a more disciplined candidacy. “Actually I’m freer now, relying on my instincts and working with a team I trust,” Mr. Trump said in an interview.

....After Mrs. Clinton’s campaign announced late Sunday that she had been diagnosed with pneumonia, many expected Mr. Trump to pounce on the news, arguing that it proved his claim she lacks the stamina to be president. Instead, Mr. Trump told campaign advisers deluged with media calls to stand down. The response struck opponents as uncharacteristic, and some supporters attributed Mr. Trump’s restraint to his new campaign organization.

Mr. Trump said efforts by previous campaign leaders to remake him into a politician were “dishonest.” And, Mr. Trump said, he resisted at times by going off script.

The Republican nominee said he was more comfortable with his new team, which, ironically, has succeeded in some of the same changes sought by former campaign chairman Paul Manafort: Mr. Trump is sticking closer to a teleprompter, giving more policy details in speeches—and making fewer off-the-cuff remarks, which hurt his campaign after the GOP convention this summer.

This is actually kind of scary. I still doubt that Trump can keep this up, but if he does, he could be dangerous. I've always figured that if Trump really did manage to calm down a bit, it wouldn't take more than a few weeks for him to put his old reputation to rest. Pundits would start saying the campaign had "matured" him. Skeptical voters would move in his direction. Republicans would breathe a sigh of relief and embrace him.

Can he keep it up? No telling. But if he does, it will be the greatest con job ever from a man whose entire career has been built on conning the public. He'd probably enjoy that.

Macroeconomics is the study of big stuff: interest rates, recessions, unemployment, inflation, long-term economic growth, etc. It didn't exactly bowl anyone over with its predictive success during the Great Recession, and ever since economists have been locked in an epic existential struggle. What's wrong with macroeconomics? Paul Romer—former renowned academic and now chief economist of the World Bank—suggests that the answer is simple. It's all bullshit:

Once macroeconomists concluded that a macroeconomic aggregate could fluctuate in the absence of any decision by any person, macroeconomists piled on extra imaginary driving forces. The resulting menagerie, together with my suggested names now includes:

  • A general type of phlogiston that increases the quantity of consumption goods produced by given inputs
  • An “investment-specific” type of phlogiston that increases the quantity of capital goods produced by given inputs
  • A troll who makes random changes to the wages paid to all workers
  • A gremlin who makes random changes to the price of output
  • Aether, which increases the risk preference of investors
  • Caloric, which makes people want less leisure

With the possible exception of phlogiston, they assumed that there is no way to directly measure these forces. In principle, phlogiston can in measured using the methods of growth accounting. In practice, the calculated residual is very sensitive to mismeasurement of the utilization rate of inputs in production so that even in this case, direct measurements are frequently ignored.

Well, this isn't going to make him any friends, is it? But he doesn't care:

When the person who says something that seems wrong is a revered leader of a group...there is a price to be paid for disagreeing with openly. This price is lower for me because I am no longer an academic. I am a practitioner, by which I mean that I want to put useful knowledge to work. I care little about whether I ever publish again in leading economics journals or receive any professional honor because neither will be of much help in putting useful insights to work.

For the record, Romer is calling out one theory and one mathematical construct. The theory is RBC, or Real Business Cycle theory, which suggests that fluctuations in growth are caused by external shocks (oil prices, new inventions, etc.) not by anything central banks do. The mathematical construct is DSGE, or Dynamic Stochastic General Equilibrium. Dynamic means that lots of things are changing over time. Stochastic means random, as in random shocks to the economy. General Equilibrium means that the theory produces a result in which the broad economy is in equilibrium.

Do you want to read Romer's paper? That depends. I found it bracing to read a famous economist trash the entire output of his own field over the past few decades, and do it with the acid tongue that only someone retired from academia can bring to bear. On the other hand, is he right? Are RBC and DSGE complete dead ends? Or are they merely in need of improvement and Romer is being crotchety about it? Beats me. The famous economists are going to have to hash that out among themselves.