OK, so why does everyone think the deficit is out of control and a threat to the existence of the republic? Good question. It's probably way too late to pull us out of the rabbit hole we've collectively dived into, but anyone reporting on this really owes it to their readers to explain the basic political dynamics at work. So why do Republicans and Democrats both think the deficit is a problem?

Answer for Republicans: They don't think the deficit is a problem. If they did, they'd favor tax increases, Pentagon cuts, and Medicare cuts, since even the most dimwitted among them knows that cutting domestic discretionary spending won't make a dent in the deficit. But they favor none of these things.

Rather, they think federal spending on liberal social programs is a problem, and yammering about the deficit is a good way to force cuts to these programs. And there's nothing wrong with this. It's good politics. Why waste a crisis, after all? But anyone reporting on this issue really needs to be honest about what's going on. Republicans want to cut social spending. The deficit is just a handy cudgel to make this happen.

Answer for Democrats: I'm actually a little stumped here. I think most Democrats understand that the short-term deficit really isn't a problem, and they also understand (I hope) that allowing the Bush tax cuts to expire and letting the economy recover will get us very close to eliminating the primary deficit (i.e., the deficit minus interest payments). If we do that, then publicly held debt as a percent of GDP stabilizes and the deficit problem becomes pretty manageable. The chart on the right from CBPP shows this graphically.

In the longer term, Medicare growth is a problem — which is just another way of saying that healthcare spending in general is a problem. This needs to be addressed, but it needs to be addressed for its own sake, not just because it affects the federal deficit.

So why have Democrats joined the deficit chorus? I'm not sure, really. I'd guess it's mainly just fear that they've been outflanked on the issue, and if they want to stay in office they have to yammer about it. But that's just a guess.

In any case, Republicans are wrong: we don't have a spending problem, we have an aging problem. As America ages, Social Security and Medicare are going to cost more, and unless you want to start killing off old people Soylent Green style there's no way to avoid this even if we do get a handle on rising healthcare costs. This in turn means we're going to need more revenue to care for the elderly. As Jon Cohn says today, "It's ridiculous to have a conversation about balancing the budget that won't even contemplate higher taxes."

A perpetually growing deficit will eventually drive up interest rates and slow economic growth, so it's something we should take seriously. But slashing social programs is exactly the opposite of taking it seriously. We need to let the Bush tax cuts expire, get out of Iraq and Afghanistan, keep working hard on reining in healthcare costs, and accept the fact that we're going to need to fund an aging population whether we like it or not. Do that, and all we'll need is modest discipline in the rest of the budget. The long-term deficit is a problem, but it's not a crisis.

I don't have any real comment to make about this, but the LA Times has an interesting story today about Egyptian politics in the post-Mubarak era:

The new breed of professionals who helped topple President Hosni Mubarak is watching its rebellion turn into a political struggle among the country's splintered opposition forces....The major rift in the youth movement is between the Coalition for the Jan. 25 Revolution Youth and a clique of urban professionals led by Google executive Wael Ghonim and dentist Mustafa Nagar. The two groups had shared strategies in a ransacked travel agency and under a tent during protests in Tahrir Square that began in late January. But talks with the government involving members of the latter group in the last days of Mubarak's rule angered some members of the coalition.

"The guys from the coalition didn't like it," said Nagar, who has a persistent cough after inhaling tear gas during demonstrations. "They accused us of selling out the blood of the martyrs. And now that same coalition is trying to meet and talk to anyone they can. We are split from them completely."

....The split in the youth movement began when members of Ghonim's group met with the government to protect protesters from security forces and resolve the crisis in the days before Mubarak fell. It was further aggravated when Ghonim, who was arrested Jan. 27, was released from jail 12 days later and instantly became the new face of the revolution after an emotional television interview.

Unlike a number of coalition members, Ghonim did not have a long history in the dissident camp. One coalition member referred to the Google executive as "just the support" because he posted a Facebook page that helped provide a catalyst for the demonstrations.

I don't think there's anything unusual about this. It's just normal politics. Still, it's also fairly predictable, and there's not much question that this kind of infighting gives the Egyptian military a lot more leverage over the future of the country than they'd otherwise have. And since they'd have a lot of influence even under the best of circumstances, this probably means their political role really isn't going to change much. The whole piece is worth a read.

Deficit Fever

John Dickerson wants someone to explain a little better why deficit reduction is suddenly so important:

Politicians haven't gotten better at delivering this message to people. Why do we have to reduce the deficit? And do we have to do it quickly? How will a smaller deficit improve the life of the average citizen?

It's an assumption of the current debate that these questions have already been answered. Politicians have jumped ahead to stage two of the debate: the competition over who can do more deficit-reducing. But both parties should go back to square one: Here's why we need to do it in the first place. The party that wins the political battle will be the one that makes this case most clearly to the public, because if people buy the diagnosis they'll be more likely to buy the prescription.

Dickerson has been a reliable deficit scold recently, and a friend of mine is annoyed. "It's almost as if he's saying 'Will somebody please explain to me what these parroted lines of mine mean?' " he says.

I guess I'd be a wee bit more charitable. Presumably Dickerson himself thinks he knows why the deficit is so important, but also thinks that the good word hasn't soaked through to the common man yet. And without that, our all-important budget cutting will never have enough public support to happen.

But if that's what he thinks, I'll bet he's wrong. So here's a challenge to Dickerson: without making any phone calls or doing any Google searches, write 500 words on why deficit reduction is so important. Write that speech you think the president should give! But lock yourself in your office and do it off the top of your head. Demonstrate to us that you really do understand why deficit reduction is so critical. Ten bucks says you don't get it right.

(Hint: your answer should not contain the words hyperinflation or Greece. It should contain the word healthcare.)

Atrios says there's not much point in trying to save money by cutting Social Security benefits for rich people:

There's No Money In Means Testing

You just can't save any money worth the additional administrative burden by depriving a few rich people of their Social Security and Medicare benefits. There aren't that many rich people! Now, those not many rich people make a hell of a lot of money so you can raise revenue by increasing tax rates on them, but it isn't worth bothering going after their Social Security checks.

This is probably true. If you make the means testing stringent enough so it applies only to the genuinely well off, it wouldn't hit enough people to matter much. Conversely, if you make the means testing loose enough to matter, it would bite into a lot of ordinary middle class earners, and that's neither fair nor politically feasible.

Want some evidence? Well, it turns out that Social Security is already means tested: your benefit level is calculated as 90% of your first $749 in monthly pre-retirement earnings, 32% of earnings up to $4,517, and 15% of your earnings above that. This means that high-income earners get a smaller benefit as a percentage of their income than low earners do.

One way to means test even more would be to reduce the third "bend point" to, say, 10% of earnings above $4,517. This would decrease benefits for the well off without touching benefits for anyone else, and it's easy to do since the system is already built with this structure in place. In fact, this is exactly the recommendation of the Rivlin-Domenici deficit reduction report.

So how much does it save? Answer: $59 billion in 2040, which is a grand total of 1.6% of the savings in their entire Social Security plan. You could reduce the third bend point to 0% and it still wouldn't be more than a nit. And note that this starts to bite at an income of $54,000 per year, which is hardly anyone's idea of rich. Raise that limit even to upper middle class territory and you'll save even less.

So why bother? To save real money, you'd have to get way more drastic, which means not just a lower cap on benefits, but actually reducing benefits for anyone with even modest retirement savings, and that would have the unhealthy side effect of reducing incentives to save for retirement as a supplement to Social Security. I don't think anyone is up for that.

Over at the Economist, Erica Grieder has given up on Social Security:

Every so often I get a document from the Social Security Administration in a green-edged envelope, and I open it straight away, thinking it might be important. Instead, I find that it's just a statement of my Social Security earnings and future benefits, a concept so absurd that I immediately recognise it for fiction....If I stopped working now, this document says, I would receive a couple thousand dollars a month in benefits at whatever age it is they suggest I retire, something I obviously do not expect to ever be able to do.

I just don't get it. Why do smart people keep saying stuff like this? Medicare is a problem. But unless you believe that the United States is literally going to collapse in the near future, Social Security isn't. Period.

The weird thing about this is that Social Security isn't even hard to understand. Taxes go in, benefits go out. Unlike healthcare, which involves extremely difficult questions of technological advancement and the specter of rationing, Social Security is just arithmetic. The chart on the right tells you everything you need to know: Right now, Social Security costs about 4.5% of GDP. That's going to increase as the baby boomer generation retires, and then in 2030 it steadies out forever at around 6% of GDP.

That's it. That's the story. Our choices are equally simple. If, about ten years from now, we slowly increase payroll taxes by 1.5% of GDP, Social Security will be able to pay out its current promised benefits for the rest of the century. Conversely, if we keep payroll taxes where they are today, benefits will have to be cut to 75% of their promised level by around 2040 or so. And if we do something in the middle, then taxes will go up, say, 1% of GDP and benefits will drop to about 92% of their promised level. But one way or another, at some level between 75% and 100% of what we've promised, Social Security benefits will always be there.

This is not a Ponzi scheme. It's not unsustainable. The percentage of old people in America isn't projected to grow forever. Lifespans will not increase to infinity.1 Taxes go in, benefits go out. It's simple.

Now, Social Security is not a very generous program, so it's possible that you won't want to retire on its modest benefits. But short of some kind of financial apocalypse — in which case we've got way bigger things to worry about anyway — Social Security benefits will be there for everyone alive today. Why is it that so few people seem to get this?

1Well, sure, they might. Who knows what medical breakthroughs we'll come up with? But lifespans have been increasing at a very slow rate for many decades now, and there's nothing on the horizon that suggests this will change suddenly. If it does, we'll have to deal with it when it happens, but there's no reason to think we should plan for it now.

Jamelle Bouie is puzzled:

By disposition, I'm not that worried about the debt. But even if I were, I have yet to hear a compelling reason for why now is the time to be hyper-concerned about the debt.

Because a Democrat is president, that's why. Any other questions?

Last year, as I'm sure you'll recall, Andrew Breitbart posted an edited videotape of a speech by Shirley Sherrod. He presented this video as proof positive that Sherrod, the USDA's Georgia Director of Rural Development, was herself a racist and, furthermore, executed her job in an overtly racist way. Needless to say, it showed nothing of the kind. In fact, it showed just the opposite.

So should Sherrod sue Breitbart for defamation? At the time, Mark Thompson thought such a suit was ill-advised, but now that Sherrod has indeed sued Breitbart and Thompson has seen the actual complaint, he's done a U-turn: "Having now reviewed some of the concrete allegations in her complaint and some other important factors, I’d like to walk that original assessment back a few miles. I have no idea how this case is ultimately going to play out, but Breitbart’s going to have a far tougher road to hoe on this than I anticipated."

bmaz has more, including the fact that Sherrod is being represented by a very big gun indeed:

Lastly, the complaint is telling for just who Shirley Sherrod’s attorneys are, and it is a very significant point. There are a team of four attorneys at the DC office of Kirkland & Ellis, Thomas Clare, Michael Jones and Beth Williams with the lead being one Thomas D. Yannucci. And who is Tom Yannucci? Glad you asked. He is, if not the preeminent, one of the most preeminent plaintiffs defamation attorneys in the United States....Yannucci is the attorney who embarrassed and gutted NBC’s Dateline on the fraudulent GM exploding gas tank story and who obtained a page one above the fold retraction from Gannett Newspapers and the Cincinnati Enquirer, and reportedly $18 million, in the Chiquita Brands story.

....Shirley Sherrod is quite a woman, and she has come to the dance locked and loaded and with a very compelling story. Andrew Breitbart better strap in, it could be a bumpy ride.

I can't think of a more deserving recipient of a bumpy ride.

I was channel surfing last night when Inkblot jumped into my lap and trapped me on the couch. As a result I ended up watching most of Bill O'Reilly's show,1 one segment of which was dedicated to Bill flipping out over the nerve of NBC's David Gregory asking John Boehner to unequivocally denounce birtherism. To my surprise, Juan Williams disagreed (mildly) with O'Reilly, while Mary Katherine Ham, of course, egged him on. Only pinheads believe in the whole birther thing, Bill said. It was ridiculous to even bring up the subject.

I was reminded of O'Reilly this morning by the results of the latest PPP poll:

Birtherism is alive and well within the GOP ranks....Birthers make a majority among those voters who say they're likely to participate in a Republican primary next year. 51% say they don't think Barack Obama was born in the United States to just 28% who firmly believe that he was and 21% who are unsure.

And of course, that's not all. There's also this:

As state legislatures across the country begin their 2011 sessions, there is one lingering issue that simply won’t die. Conservative legislators in several states have already proposed more “birther bills” that allude to the conspiracy theory alleging that President Obama is foreign-born....In the last month, bills have appeared in Connecticut, Tennessee, Arizona, Indiana, Nebraska, Missouri and Montana that would all require anyone running for elected office to furnish a long-form birth certificate before being declared eligible as a candidate. Oklahoma, home to several attempts at pushing birther bills through the legislature, has no fewer than three birther bills currently under review....and still other states, including Texas, are carrying on discussions of birther bills from earlier legislative sessions.

To summarize: a majority of likely Republican voters think Barack Obama wasn't born in the United States and upwards of a dozen state legislatures are considering birther-inspired bills. But Bill O'Reilly thinks this is just a nothingburger that the liberal press is blowing all out of proportion. I wonder how big it has to get before he thinks it's legitimate news that the leaders of the Republican Party steadfastly refuse to denounce a lunatic theory that's literally sweeping through their own party?

1I know, I shouldn't blame this on poor Inkblot. But if it weren't for him, I wouldn't have watched.

Ezra Klein:

Perhaps it's the mark of a good book that after you read it, you begin seeing evidence for its thesis in lots of different areas. Since reading Tyler Cowen's "The Great Stagnation," I've been seeing a lot of support for a claim that I'd initially resisted: the idea that the technological advances of the 19th and early 20th centuries were far more important to both the economy and quality of life than what's come since.

I myself never found this thesis hard to accept in the first place, but I'd toss in an additional aspect to ponder. Roughly speaking, I'd say there have only been three big GDP-busting inventions over the past few centuries: the steam engine, electrification, and the digital computer. There have been plenty of related spinoffs (internal combustion engines, the internet) and plenty of important but smaller inventions (penicillin, radio). But the big three are the big three.

So in some sense, the problem here is with our expectations. World-changing inventions just don't come around all that often, and when they do it takes a long and variable time for them to become integrated enough and advanced enough to have an explosive economic effect. Steam took the better part of a century, electrification took about half that, and computers — well, we don't really know yet. So far it's been about 60 years and obviously computers have had a huge impact on the world. But I suspect that even if you put the potential of AI to one side, we're barely halfway into the computer revolution yet. To a surprisingly large extent, we're still using computers to automate stuff we've always done instead of actually building the world around what computers can do.

In any case, regardless of how computerization unfolds in the future, it's hardly surprising that we haven't yet had a fourth great invention. They only come around once a century or so, after all. Give it time.

This is lovely, isn't it?

A law under consideration in South Dakota would expand the definition of "justifiable homicide" to include killings that are intended to prevent harm to a fetus—a move that could make it legal to kill doctors who perform abortions. The Republican-backed legislation, House Bill 1171, has passed out of committee on a nine-to-three party-line vote, and is expected to face a floor vote in the state's GOP-dominated House of Representatives soon....If the bill passes, it could in theory allow a woman's father, mother, son, daughter, or husband to kill anyone who tried to provide that woman an abortion—even if she wanted one.

This is from Kate Sheppard, who reports that South Dakota already has no abortion providers and relies on a Planned Parenthood doctor who flies into a clinic once a week. Presumably that doctor is pretty well guarded, but still: if this law passes would you want to fly into South Dakota once a week knowing that every wannabe 007 in the state now feels like he has a license to kill? Nope. Which, of course, is the whole point.

UPDATE: The sponsor of the legislation says this is all a bunch of hooey. Greg Sargent:

I just had a spirited conversation with the bill's chief sponsor, State Representative Phil Jensen, and he defended the bill, arguing that it would not legalize the killing of abortion doctors. "It would if abortion was illegal," he told me. "This code only deals with illegal acts. Abortion is legal in this country. This has nothing to do with abortion." In other words, since abortion is not "homicide," the law could not apply.

....When I asked Jensen what the purpose of the law was, if its target isn't abortion providers, he provided the following example: "Say an ex-boyfriend who happens to be father of a baby doesn't want to pay child support for the next 18 years, and he beats on his ex-girfriend's abdomen in trying to abort her baby. If she did kill him, it would be justified. She is resisting an effort to murder her unborn child."

I report, you decide.