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Don't Worry About the Deficit

Your Humble Blogger should probably join Left Blogovia in saying the things that aren’t showing up in the news and analysis of politics just now.

First: Nobody cares about the deficit. This is, of course, not fully true—but as a matter of the Will of the People, the deficit consistently polls as a fairly low priority.

B: Lots of people do say they care about the deficit, but most of those people don’t really care very much about the deficit. Or, rather, most people who say they care about the deficit don’t really care very much about the gap between the federal revenues and the federal expenditures. They care about other things that they call the deficit, or they care about the policies that they believe (sometimes baselessly, sometimes with reason) must follow an actual deficit, or they feel that they ought to care about the deficit, or they think that the deficit necessarily implies moral turpitude on the part of legislators or bureaucrats. Or that they think they ought to care about the deficit, or that somebody has told them that the deficit is super-important, or (most of all) that they are simply expressing disapproval of the government generally. That’s all fine, but from a political point of view, it would be a mistake to think that closing (or narrowing) the gap between the federal revenues and the federal expenditures will please those people.

III: Independent of the opinion and priority of the populace (and democratic representation and all that cal), neither our national deficit nor our national debt are at dangerous levels at this time. We could tell that, presumably, by the bond market, which is where the debt is sold and where the real trouble, if there is to be any, will surface. We can predict that if current trends continue, they will be at dangerous levels within a generation, but of course current trends never do continue. Nearly one in ten people looking for work being unable to find it over the last year is an actual problem, both with politics and policy. The deficit is a potential problem. While potential problems need attention as well, it’s not usually a good idea to exacerbate actual problems with your solutions to potential problems.

Also: To the extent that the current trends abovementioned are worrisome, not only is the cost of health care the primary factor, it is essentially the only factor worth sweating over, by a factor of something silly like five to one over other entitlements (see the CBO Director’s Blog on the long-term budget outlook). Thus, any policy that does not address health care spending is not addressing the projected deficit. Again: any policy that does not address health care spending is not addressing the projected deficit. No austerity plan, no tax reform, no grand bargain.

Penultimately: In the short term, a largish chunk of the deficit is caused by the evaporation of revenues attributable to (a) our reluctance to collect taxes from people who have incomes, and (2) our inability to collect taxes from the large number of people who (because of the hijjus job market) don’t have incomes. While I am not bothered about this, particularly, it is true that any policy that does not increase spending on employment and collection does not address the short-term deficit.

In conclusion: Current estimates have the ratio of bullshit-to-reality in talk about the deficit to be well over 1,000 to one. This is not significantly higher or lower a ratio than at any time in my political memory, but the ratio means that the increase in the absolute quantity of bullshit broadcast has not accompanied a visible (or audible) increase in the quantity of reality broadcast.

Not altogether unrelatedly: Current long-term budget projections do not include the cost of slashing CO2, or of refugees from parts of the world where resources will be scarce, or underwater. Of course, climate change might be a myth, or alternatives to coal and oil may be provided free gratis, or all the refugees may go elsewhere. But then, it’s possible that magic pills may be free gratis, or that the bird flu will quickly and cheaply kill the elderly and vulnerable, or that the singularity will happen, or that the invasion of Iraq will, in fact, pay for itself. But you know? Probably not. So to make it clear: we are filling our news and legislatures with babble about The Deficit, which may be an actual problem in forty years, long after the projected tipping point for doing anything about something which is projected to be a catastrophic problem.

Tolerabimus quod tolerare debemus,
-Vardibidian.

Comments

You forgot really to rant about how our children and our children's children (since that is more rhetorically powerful than grandchildren) will suffer undue burdens because of our unbridled deficit spending...


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