Kevin Drum - July 2011

Quote of the Day: Hating on Dave

| Thu Jul. 21, 2011 1:06 PM EDT

From Felix Salmon, who doesn't like the government finance = family finance comparison no matter who's making it:

I’m beginning to think that the most politically corrosive movie of the past 20 years was Ivan Reitman’s Dave, from 1993, where the president, armed with nothing but his neighborhood accountant and a couple of bratwursts, manages to fix the budget over dinner.

Hey! We like that movie around this house. But yeah, like so many other Hollywood versions of politics, it sure does make things look a lot easier than they really are.

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Fun With Numbers!

| Thu Jul. 21, 2011 12:39 PM EDT

The chart below is dedicated to the Heritage Foundation. Thanks go to Matt Yglesias, Karl Smith, and Stan Collender.

Less Lead, Better Kids

| Thu Jul. 21, 2011 11:39 AM EDT

Matt Yglesias points to a welcome bit of good news reported in the New York Times today. The EPA, it seems, is field testing a new way of using fish bones to clean up lead contamination in urban areas:

Today, there is more lead contamination in America’s cities than any federal or state agency could ever afford to clean up and haul away. So scientists and regulators are trying a new strategy, transforming the dangerous metal into a form the human body cannot absorb, thus vastly reducing the risk of lead poisoning.

The principle is straightforward, said Victor R. Johnson, an engineer with Civil & Environmental Consultants Inc. “The fish bones are full of calcium phosphate,” he said. “As they degrade, the phosphates migrate into the soil.” The lead in the soil, deposited by car exhaust from the decades when gasoline contained lead or from lead-based paint residue, binds with the phosphate and transforms into pyromorphite, a crystalline mineral that will not harm anyone even if consumed.

Evidence mounts almost daily about the damage that the modern environment does to our children. Lead, small particulates in the air, phthalates and other endocrine disruptors, sugar-heavy diets that promote Type 2 diabetes, and lousy conditions in the home all combine to make our children far more vulnerable to chronic problems, both physical and cognitive, than they need to be. It's nice to see that at least one of these things is being addressed in a creative new way.

Rick Perry's Team Takes Shape

| Thu Jul. 21, 2011 10:01 AM EDT

Texas Gov. Rick Perry, based on everything I've read about him, is not very bright. Not merely incurious or overly reliant on his gut, like George Bush, but genuinely just sort of dimwitted.

Andy McCarthy of National Review, based on everything I've read of his, ought to be locked up in a mental ward somewhere. I really, sincerely, don't understand why NR continues to associate itself with him. There's gotta be a line somewhere, after all.

But guess what? Perry and McCarthy have apparently teamed up! If Perry decides to run, this really has the makings of an epic disaster. I can hardly wait.

Wall Street Starts to Hear Footsteps

| Wed Jul. 20, 2011 11:44 PM EDT

The New York Times reports that Wall Street folks are really, truly, finally starting to come to grips with the fact that Republican lunatics in Congress might actually refuse to raise the debt ceiling on August 2nd:

Even though many on Wall Street believe that a default remains unlikely, the financial markets are starting to become agitated. Volatility in stocks has soared, and some investors say stock prices are falling because a United States default could severely raise companies’ costs of doing business. In the Treasury market, investors are starting to sell, fearing that the government will not make good on some interest payments that will be due next month. And complex financial instruments that will pay out if the United States defaults have become twice as expensive to buy as they were at the start of the year.

....“The metaphor is a pile of sand,” said Mark Zandi, the chief economist at Moody’s Analytics. “You keep putting one piece of sand on the pile, nothing happens, and then, all of the sudden it just caves.”

Wall Street helped elect 'em, and only now are they finally figuring out what they got themselves into. Who knows? If the GOP wackos really do run the train off the cliff, maybe rich people will finally figure out that paying a few more percentage points in income taxes isn't such a high price to pay for sanity after all.

Bachmann's Migraines: Infrequent, Well Controlled

| Wed Jul. 20, 2011 4:30 PM EDT

I wasn't really planning to write again about Michele Bachmann's migraines, but since she's now released this letter from her physician I have to admit that I'm curious to know what the "known trigger factors" are. Probably none of my business, though, unless it's something like "having to make difficult decisions that affect millions of people."

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Yet Another Proud Moment in Congressional History

| Wed Jul. 20, 2011 2:05 PM EDT

James Fallows sums up a recent — bipartisan! — bill that harnesses no-nothing jingoism to kill off joint research into clean carbon technology with China:

So, the Democrat makes sure the U.S. doesn't do clean energy research with the one partner that matters most. And the Republican makes sure we don't do it anywhere else, except with Israel.

In fairness to Rep. Sherman, his comments on the floor make clear that he was offering his "don't deal with China" amendment as a "moderate" alternative to Harris's "don't deal with anyone (except Israel)." This is the state of bipartisan debate: the alternative to complete, destructive flat-Earthism (the Harris amendment) is targeted, specific, "moderate" flat-Earthism (the Sherman amendment). Rather than choose, the House embraces them both.

Yay Congress! Yet another legislative moment for us all to be proud of.

$1 Trillion vs. $1 Trillion

| Wed Jul. 20, 2011 12:34 PM EDT

The "Gang of Six" plan unveiled yesterday offers $1 trillion in new revenue as part of its deficit-reduction package. However, CBPP's Robert Greenstein explains that this is not the same thing as the $1 trillion in new revenue from the previous grand bargain that House Speaker John Boehner walked away from. The grand bargain plan assumed that the Bush tax cuts for the rich would be made permanent (thus reducing revenue by $700 billion) and then added $1 trillion on top of that, for a net total of $300 billion in new revenue. The Gang of Six plan assumes the Bush tax cuts for the rich are allowed to expire and then adds $1 trillion more, for a net total that's genuinely $1 trillion.

In other words, regardless of any legerdemain with CBO scoring, the Gang of Six plan raises taxes way more than the plan Boehner rejected because his conference was dead set against it. And that's in addition to the fact that it's obviously far too complex to be put into legislative language, scored, and moved through Congress in less than two weeks. So explain to me again why everyone was so excited about this?

I suppose one advantage of the G6 plan is that it makes only a few cuts immediately and basically punts everything else into the future, including the tax hikes. And since conservatives, in addition to being anti-tax, are also convinced that spending cuts promised for the future are just a sham, maybe they figure that tax hikes promised for the future are also a sham. So the G6 plan allows them to vote for kicking the can down the road without any intention of ever voting for the future tax hikes.

Or something. Frankly, I'm not really sure what's going on anymore and I'm not sure anyone else is either. For now, I'm going to stick with my guess that we'll blow by the August 2nd deadline, markets will go nuts, and we'll end up with some kind of debt ceiling increase by August 7th. We'll see.

40 Percent Less Government Will Be Fun!

| Wed Jul. 20, 2011 11:24 AM EDT
A classroom in a place with a lot less government.

So suppose the debt-ceiling deadline passes. Nothing to worry about, right? There's still enough money for Social Security, Medicare, interest payments, military payrolls, and veterans benefits, isn't there? That's more or less true, but unfortunately, that's all there's money for. Megan McArdle runs down a small sample of the things that will have to be zeroed out:

  • You just cut the IRS and all the accountants at Treasury, which means that the actual revenue you have to spend is $0.
  • The nation's nuclear arsenal is no longer being watched or maintained
  • The doors of federal prisons have been thrown open, because none of the guards will work without being paid, and the vendors will not deliver food, medical supplies, electricity, etc.
  • The border control stations are entirely unmanned, so anyone who can buy a plane ticket, or stroll across the Mexican border, is entering the country. All the illegal immigrants currently in detention are released, since we don't have the money to put them on a plane, and we cannot actually simply leave them in a cell without electricity, sanitation, or food to see what happens.
  • All of our troops stationed abroad quickly run out of electricity or fuel. Many of them are sitting in a desert with billions worth of equipment, and no way to get themselves or their equipment back to the US.
  • Our embassies are no longer operating, which will make things difficult for foreign travellers
  • No federal emergency assistance, or help fighting things like wildfires or floods. Sorry, tornado people! Sorry, wildfire victims! Try to live in the northeast next time!
  • Housing projects shut down, and Section 8 vouchers are not paid. Families hit the streets.
  • The money your local school district was expecting at the October 1 commencement of the 2012 fiscal year does not materialize, making it unclear who's going to be teaching your kids without a special property tax assessment.
  • The market for guaranteed student loans plunges into chaos. Hope your kid wasn't going to college this year!
  • The mortgage market evaporates. Hope you didn't need to buy or sell a house!
  • The FDIC and the PBGC suddenly don't have a government backstop for their funds, which has all sorts of interesting implications for your bank account.
  • The TSA shuts down. Yay! But don't worry about terrorist attacks, you TSA-lovers, because air traffic control shut down too. Hope you don't have a vacation planned in August, much less any work travel.
  • Unemployment money is no longer going to the states, which means that pretty soon, it won't be going to the unemployed people.

How about if we just call this the "Republican Budget Plan"? If you'd like it to be permanent, you can call it the "Michele Bachmann Plan."

Bachmann and the Debt Ceiling

| Wed Jul. 20, 2011 10:59 AM EDT

This should go without saying — which means, of course, that it has to be said — but any presidential candidate whose position is flat-out opposition to raising the debt ceiling under any circumstances should be immediately asked:

So which 40% of the federal government do you plan to permanently cut starting on August 2nd?

Demagogues like Michele Bachmann are allowed to earn swooning cheers from tea party crowds with cross-of-gold-like proclamations that "I. Will. Not. Vote. To. Increase. The. Debt. Ceiling." — but are then allowed to avoid answering the obvious followup question. Keep in mind: Bachmann's position isn't that she wants a balanced budget in 2020, or 2015, or even next year. She wants one starting in two weeks. That means big cuts in at least one of three areas: Social Security, Medicare, and the Pentagon. If she plans to keep any of the rest of the government around, it means even bigger cuts in those three areas.

For some reason, the press has long been willing to give a pass to conservative crazies because, hey, that's just how they are. (In Bachmann's case, it also helps to have a flying wedge of bouncers to keep pesky reporters at bay.) Still, she has to answer questions eventually. And the first and only question she should be asked, over and over and over again, is: Which 40% of the federal government do you plan to permanently cut starting on August 2nd?

She'll never reply, of course, since her adoring crowds might be slightly less adoring if she was willing to tell them the truth about what her priorities are. But it would still be nice to see professional reporters act like profesisonal reporters and refuse to stop asking until she gives a real answer.