Tuesday, November 16, 2010

Can you balance the U.S. budget in 5 minutes?

The New York Times has posted a budget simulator that allows you to mess around with the current U.S. budget deficit by cutting programs and salaries or by raising taxes. 

This being the New York Times, they don't acknowledge that if you raise too many taxes to a higher level, the amount of revenue drops. 
The Bush tax cuts raised the amount of money coming into the Treasury. 
The percentage of the total taxes paid by the evil top earners increased after the Bush tax cuts. 
Getting the NYT to admit this would be like getting them to acknowledge the effectiveness of HUD.  Or busing.  Or rent control. 

The simulator won't allow you to cut military spending by 75%, bring the boys and girls back home, and have the remaining troops defend the borders.  (Our borders.  Not Korea's.)

You can't legalize weed, allowing for a 50% cut in police, judges, narcotics agents, border guards, parole officers, probation specialists, jailers, counselors, piss-testers, urine samplers, stool-sniffers, and Sharia Law enforcers. 
You can't eliminate the Departments of Energy or Education.
You can't sell off the prime real estate currently occupied by the U.N. 
Other than that, it is a interesting little exercise. 

My employer, Jukt Micronics, went through a similar exercise a couple of years ago.  The only difference?  It was real.  We had to cut employees.  We had to examine every penny in purchasing.  For the second time in the company's existence, some people had to take pay cuts.  Forget about pay raises.  The percentages in cuts that we had to deal with were twice as large as the cuts proposed by the Times.  We sold off every unnecessary asset.  We sold off some assets that were necessary.  (Lee, I'm still pissed off about those 8 tires of mine that you sold.) 

If we hadn't done these things, we would be out of business.  (We can't print money.  Go here to see how Fed Chairman Ben Bernanke is trying to harm low income people for the benefit of those at the top who want the spending orgy to continue.)

If you take the test, you'll see that Starving The Beast won't be easy,but it should be simple.  We just have to decide when we're going to do it.  So why the delay?  Here's a comment from an Instapundit reader:
I think they are sending the wrong message with this calculator– it shows me how easy it is to eliminate the deficit! I was able to do so in a few minutes, even within the constraints imposed by the NYT’s calculator. If I can do it so easily, why can’t the politicians?

That’s a rhetorical question– the answer is that there are not enough opportunities for graft in deficit elimination.
There you have it. 

The cartoon came from here.  The "grim reaper on a budget" poster came from here


Nick Rowe said...

This is exactly like the financial models that wouldn't permit negative house price appreciation.

If I were dictator of the country, I'd actually increase the deficit in the short run.

First, I'd hire a lot more lawyers for the Justice Department and prosecute thousands of bankers, mortgage brokers, borrowers, lawyers, and other scoundrels in the housing and financial crisis. I'd also have to build more jails and hire more guards to house them.

I'd institute a proportional tax which would likely reduce tax revenues in the short run. We might have to have a relatively high tax rate until we pay off our national debt.

I'd rebuild a lot of roads and bridges which have been neglected for decades.

I'd privatize Social Security, and we'd have to bear the initial costs of the transformation.

But I have no doubt I could find huge amounts of waste, fraud, unnecessary, and prohibited spending in our budget.

I would call that a cleansing.

The Whited Sepulchre said...

Wow. I think you've thought about this issue before !