For those who are interested, I'm posting two schedules. The first concerns a conference to be held on May 4-5, 2006 at NYU (I should mention sponsorship by NYU, the American Enterprise Institute, the Burch Center for Tax Policy and Public Finance at Berkeley, and the Fund for Tax and Fiscal Research at Harvard Law School). Alan Auerbach and I are collaborating to do the heavy lifting in terms of setting it up.
Tentatively, and I admit not very interestingly, entitled "Key Issues in Public Finance," it is in fact a conference in honor of David Bradford, but one that is intended to be serious and substantive, looking primarily forward at issues that interested David.
The paper topics, each with an author and two discussants, are as follows
1) ISSUES OF BUDGET MEASUREMENT - author is Laurence Kotlikoff, Boston University; discussants are myself and Kent Smetters, University of Pennsylvania.
2) CONSUMPTION TAX IMPLEMENTATION - author is David Weisbach, University of Chicago; discussants are Edward McCaffrey, USC, and Joel Slemrod, University of Michigan.
3) ISSUES OF TRANSITION TO A CONSUMPTION TAX - author is Louis Kaplow, Harvard University; discussants are James Hines, University of Michigan, and Kyle Logue, University of Michigan.
4) THE NEW VIEW OF CORPORATE DIVIDENDS - author is Roger Gordon, UC San Diego; discussants are William Andrews, Harvard University, and George Zodrow, Rice University.
5) THE CHOICE BETWEEN INCOME TAXATION AND CONSUMPTION TAXATION - author is Alan Auerbach, UC Berkeley; discussants are Glenn Hubbard, Columbia University, and Alvin Warren, Harvard University.
6) FISCAL DECENTRALIZATION - author is Wallace Oates, University of Maryland; discussants are Harvey Rosen, Princeton University, and Charles McLure, Hoover Institution.
Conference volume tentatively set to be published by the Harvard University Press. I believe that interested people will generally be welcome to attend the conference.
Monday, October 03, 2005
Sunday, October 02, 2005
1 + 1 = unindicted co-conspirators??
Read this and this, and there would seem to be a definite chance that, under Fitzgerald's theory of the Plame case, there was a criminal conspiracy involving, not just Rove and Libby, but also Bush and Cheney. This suggests the possibility that Fitzgerald will go beyond indicting Rove and Libby to name Bush and Cheney as unindicted co-conspirators.
This presumably would be accompanied by a formal referral to the House Judiciary Committee, not that they would do anything with it.
Quite a turn of the screw if it happens.
This presumably would be accompanied by a formal referral to the House Judiciary Committee, not that they would do anything with it.
Quite a turn of the screw if it happens.
Thursday, September 29, 2005
Chief Justice Roberts
Despite being a law professor, I'm really not all that interested in the Supreme Court. Questions such as, "What do you think of Justice Kennedy's view of federalism, as set forth in his concurrence in the Blah Blah case?" strike me as distinctly less intellectually rewarding than [fill in the blank - Watching paint dry? Too cliched. Memorizing Ramones lyrics? At least they're funny sometimes. Reading airport fiction? At least it might be titillating.]
That being said, it's fine with me that Roberts was confirmed by a large vote. While presumably not the person I would have picked, he does at least appear to be highly qualified (a rarity in Bush appointees to anything), not to mention a thoughtful individual rather than a mad dog.
That being said, it's fine with me that Roberts was confirmed by a large vote. While presumably not the person I would have picked, he does at least appear to be highly qualified (a rarity in Bush appointees to anything), not to mention a thoughtful individual rather than a mad dog.
Partisanship
In today's New York Times, David Brooks, in keeping with his self-placement as a quasi-independent-minded Republican, issues a quasi-criticism of Tom DeLay. Although Tom is a lovely man, we are told, he is simply too partisan. But this is an endearing flaw in a way, because it shows selfless enthusiasm to help the team. Brooks notes that DeLay is charged with shenanigans to help his team win, not with stealing money for himself.
Let's leave aside all those lobbying junkets, which certainly had something in it for ol' Tom. This is not actually all that endearing. Would partisanship and the selfless desire to help the team be a satisfying defense of Bin Laden, Joseph Goebbels, or Communists around the world during the Stalin era? The U.S. political system cannot and will not survive if enough people take partisanship to the lengths that DeLay has.
Brooks quasi-acknowledges this, and ends with a quasi-dig at the Democrats suggesting that they will be as bad in their turn as DeLay. I suppose one can't rule this out, but it would take some doing.
Let's leave aside all those lobbying junkets, which certainly had something in it for ol' Tom. This is not actually all that endearing. Would partisanship and the selfless desire to help the team be a satisfying defense of Bin Laden, Joseph Goebbels, or Communists around the world during the Stalin era? The U.S. political system cannot and will not survive if enough people take partisanship to the lengths that DeLay has.
Brooks quasi-acknowledges this, and ends with a quasi-dig at the Democrats suggesting that they will be as bad in their turn as DeLay. I suppose one can't rule this out, but it would take some doing.
Just asking
Why does the New York Times keep saying that the recent Republican scandals include the arrest of a "former White House budget official" (David Safavian)? That makes it sound as if some person who once had been in the White House had later gotten into trouble. In fact, the guy resigned on a Friday and was indicted the folllowing Monday.
Wednesday, September 28, 2005
Every cloud has a silver lining (for someone)
From today's Washington Post:
[A relatively budget-conscious Republican Congressman], lunching with reporters at Charlie Palmer Steak, accepted that Congress would not find cuts to pay for the $62 billion spent so far on Katrina -- much less the $250 billion more that Louisiana wants from the feds. If "we find $20 billion in offsets, we'll probably declare victory," said the congressman, who spoke on the condition that he not be named.
As fiscal hawks surrendered, would-be government contractors were meeting in the Hart Senate Office Building to figure out how to get a share of the money. A "Katrina Reconstruction Summit," hosted by Sen. Mel Martinez (R-Fla.) and sponsored by Halliburton, among others, brought some 200 lobbyists, corporate representatives and government staffers to a room overlooking the Capitol for a five-hour conference that included time for a "networking break" and advice on "opportunities for private sector involvement."
Senate Majority Leader Bill Frist (R-Tenn.) sent his budget director, Bill Hoagland, who cautioned that federal Katrina spending might not exceed $100 billion. But John Clerici, from a law firm that helped sponsor the event, told the group that spending would "probably be larger" than $200 billion. "It's going to be spent in a fast and furious way," Clerici said.
Sipping coffee from china cups and munching on doughnuts, the corporate crowd heard Joe McInerney, president of the American Hotel and Lodging Association, predict: "I think we'll see Mardi Gras in New Orleans to some extent this year."
[A relatively budget-conscious Republican Congressman], lunching with reporters at Charlie Palmer Steak, accepted that Congress would not find cuts to pay for the $62 billion spent so far on Katrina -- much less the $250 billion more that Louisiana wants from the feds. If "we find $20 billion in offsets, we'll probably declare victory," said the congressman, who spoke on the condition that he not be named.
As fiscal hawks surrendered, would-be government contractors were meeting in the Hart Senate Office Building to figure out how to get a share of the money. A "Katrina Reconstruction Summit," hosted by Sen. Mel Martinez (R-Fla.) and sponsored by Halliburton, among others, brought some 200 lobbyists, corporate representatives and government staffers to a room overlooking the Capitol for a five-hour conference that included time for a "networking break" and advice on "opportunities for private sector involvement."
Senate Majority Leader Bill Frist (R-Tenn.) sent his budget director, Bill Hoagland, who cautioned that federal Katrina spending might not exceed $100 billion. But John Clerici, from a law firm that helped sponsor the event, told the group that spending would "probably be larger" than $200 billion. "It's going to be spent in a fast and furious way," Clerici said.
Sipping coffee from china cups and munching on doughnuts, the corporate crowd heard Joe McInerney, president of the American Hotel and Lodging Association, predict: "I think we'll see Mardi Gras in New Orleans to some extent this year."
Monday, September 26, 2005
Bruce Bartlett on the fiscal situation
Others, such as Brad DeLong, have posted this as well, but Bruce Bartlett's statement before the Senate Democratic Policy Committee on 9/23/05 deserves to be widely read. The solution to the U.S. fiscal problems can only be bipartisan, and that means two are needed to play. Until the Republicans come to their senses and throw out the current crew, there will be no way of knowing if the Democrats are willing to cooperate as well.
Statement by Bruce R. Bartlett
September 23, 2005
Thank you for the opportunity to testify before you this morning. As you know, I testify as a Republican—I have served in senior political positions in Ronald Reagan’s White House and George H.W. Bush’s Treasury Department, and as executive director of the Joint Economic Committee, a cosponsor of this hearing. However, I do not represent the Republican Party or any organization with which I may be associated. I am here speaking only for myself.
I testify as someone who is very disenchanted with his party’s fiscal policy since 2001. Unlike the other witnesses, I am less concerned about the deficit per se or about the size of the tax cuts enacted over the last five years. Rather, what really bothers me is the increase in spending and expansion of government that my party has been responsible for.
I used to believe that the Republican Party was the party of small government. That’s why I became a Republican. I don’t believe that the federal government has the right to one penny more than absolutely necessary to fulfill its essential functions as spelled out in the Constitution. I think government is over-intrusive and could do what it has to do far more efficiently and at lower cost, which means with lower taxes.
Therefore, it bothers me a great deal when Republicans initiate new entitlement programs, massively expand pork-barrel spending, and show the most callous disregard for fiscal integrity. Not too many years ago, Ronald Reagan vetoed a politically popular highway bill because it contained 157 pork-barrel projects. The latest bill contained at least 5,000. Yet President Bush signed this $295 billion bill into law, despite having promised repeatedly to veto a bill larger than $256 billion.
For the life of me, I cannot understand why President Bush seems so incapable of using his veto pen. His father knew how to veto bills. He vetoed 29 of them in his four years in office. But in his first four-plus years, this President Bush has vetoed nothing. He is the first president since John Quincy Adams to serve a full term without vetoing anything. Curiously, Adams is also the only other son of a former president to become president—and his father, John Adams, didn’t veto anything, either.
When I complain about this to the White House, they tell me that it is very hard to veto bills when your party controls both Congress and the White House. But this explanation is simply implausible. Franklin D. Roosevelt had huge Democratic majorities, yet vetoed a record 372 bills. John F. Kennedy, Lyndon Johnson and Jimmy Carter also had large majorities of Democrats, yet Kennedy vetoed 12 bills during his short presidency, Johnson vetoed 16, and Carter vetoed 13.
I won’t bore this committee with numbers. You know them as well as I do. Suffice it to say that our fiscal situation is dire and growing worse by the day. My principal concern, however, is not with today’s deficits—even if they are swollen by Katrina and Rita-related emergency spending. What worries me is the retirement of the baby boom, the first of which turns 62 in 2008. I’m not saying that we are close to driving off a fiscal cliff, but clearly the implications of this event have not impacted on policymakers in any way whatsoever.
I have struggled with a way to illustrate the consequences of an aging population and its effect on the budget. This is the best I have been able to do. Social Security’s unfunded liability comes to 1.2 percent of GDP in perpetuity (1.4 percent without the trust fund)—about what is raised by the corporate income tax—according to that program’s actuaries. The comparable number for Medicare is 7.1 percent of GDP—about what is raised by the individual income tax. And remember that these figures are for the unfunded portion of these programs, so they are over and above payroll taxes.
The chilling conclusion, therefore, is that virtually 100 percent of all federal taxes, on a present value basis, do nothing but pay for Social Security and Medicare. Unless there are plans to abolish the rest of the federal government, large tax increases are inevitable.
Let me be clear that I am no advocate of higher taxes. I’m the one who drafted the Kemp-Roth bill back in the 1970’s and I have spent most of my career looking for ways to cut tax levels and tax rates. But that was predicated on an assumption those supporting tax cuts also wanted to downsize government. I never saw tax cuts as a substitute for spending cuts, but more as sugar to make the medicine go down. My ultimate goal was to reduce both taxes and spending.
Unfortunately, few in my party seem to share this philosophy any longer. For many, tax cuts have become a substitute for spending cuts. It truly amazes me how often I hear people on my side talk about cutting taxes as if this is the only thing necessary to downsize government. They seem genuinely oblivious to the fact that the burden of government is largely determined by the level of spending, not taxes. Nor do they understand that in the long-run, all spending must be paid for one way or another. Increasing spending today, therefore, absolutely guarantees that taxes will have to be raised in the future.
I am often criticized by friends on my side of the aisle for implicitly endorsing tax increases. I do no such thing. I am simply adding two and two and getting four while my friends seem to think there is some way of only getting three.
They also criticize me for implicitly abandoning the fight to cut spending and downside government. Again, I plead innocent. It is not I who has abandoned the fight, but my party. I don’t need to remind anyone here that the biggest spending increases in recent years passed Congresses with Republican majorities largely without Democratic votes. Nor do I need to remind anyone here that during the Clinton years we not only went from budget deficits to budget surpluses, but did so to a large extent by cutting spending—something my conservative friends seldom acknowledge.
Here’s the basic accounting. Defense spending fell by 1.4 percent of GDP between 1993 and 2000, and domestic discretionary spending fell from 3.8 percent to 3.3 percent. Even spending on entitlements fell for temporary demographic reasons, from 10.2 percent of GDP to 9.8 percent. Finally, interest on the debt fell, largely because of falling interest rates, from three percent of GDP to 2.3 percent. The result was an overall decline in spending of three percent of GDP, from 21.4 percent to 18.4 percent, the lowest level since 1966, before the Great Society geared up.
On the revenue side, individual income taxes rose by 2.5 percent of GDP, mainly as the result of rising incomes that pushed people up into higher tax brackets and higher capital gains taxes from the booming stock market. Corporate income taxes and payroll taxes added another 0.8 percent, for a total revenue increase of 3.3 percent of GDP. Thus lower spending and higher revenues constituted a fiscal turnaround of 6.3 percent of GDP, which explains how a deficit of 3.9 percent of GDP in 1993 became a budget surplus of 2.4 percent by 2000.
I don’t give President Clinton full credit for this performance. I think most of the credit goes to gridlock. Mr. Clinton wouldn’t support the Republican Congress’s spending and it wouldn’t support his. So for a blessed six years, government effectively was on automatic pilot. Sadly, unified government has led to an utter lack of restraint by my party that is simply inexcusable. It is extremely dismaying for me to hear House Majority Leader Tom Delay say that there is no fat in the budget and that Republicans have cut it to the bone. This is, quite frankly, ludicrous. My real fear, however, is that he may actually believe it.
I remain convinced that given the total lack of fiscal responsibility demonstrated by the Republican Party that very large tax increases are inevitable. I believe that the fiscal hole is now so large that it is unrealistic to think that we can just tinker with the tax system, as we did so often in the 1980’s, and raise enough revenue to pay for spending commitments that have been made. And under the circumstances, I have no faith whatsoever that spending will be significantly restrained—at least not by my side. They would first have to admit error and beg for forgiveness from people like me, something I don’t expect to be forthcoming any time soon.
Therefore, like it or not, we must travel the same route taken by the Europeans, who long before us made peace with the welfare state and tried to figure out how to pay for it with the least negative impact on economic growth and incentives. They all imposed a broad-based consumption tax called the value-added tax as an add-on tax to all the others. I think it is only a matter of time before we are forced to do the same thing and the longer we wait the more painful it will be when it is finally done. Unfortunately, we are more than likely going to have to be forced into it by a financial crisis of some sort. It would be better to avoid that cost and deal with our fiscal situation rationally. But I see no leadership on either side that would allow that to happen.
I don’t know when, where or how a financial crisis will develop. I only know that trends that can’t continue don’t. Since it is unlikely that the vast fiscal imbalance will be resolved with a whimper, it becomes a certainty that it will end with a bang. Among the areas ripe for triggering a crisis are a popping of the housing bubble, a crash of the dollar, a mistake by some big hedge fund, excessive tightening by the Fed and others too numerous to mention. It will take extraordinary luck and skill to avoid every boulder in the stream and I have little confidence that this administration has the personnel to even give us a fighting chance. There are too many Michael Browns at senior levels of the government today and too few Bob Rubins or Alan Greenspans.
Contrary to popular belief, I don’t think the American people are a bunch of children who only want hand-outs from the government and will only reward the party that promises them something for nothing. Experience and academic research confirm that they are more likely to support the candidate who treats the public purse with prudence and trust and not as a piggy bank to be routinely broken on a whim. In short, I think there is a political market for the party and the candidate who speaks honestly about the nature of the fiscal crisis that is looming. The payoff may not be immediate and the public trust has to be earned by more than just rhetoric. But if, as I believe, some event will eventually change the political landscape, voters will remember who spoke the truth and who mouthed the platitudes.
It’s dirty work, but someone has to do it. Since my party won’t do it, yours is going to have to. If it’s done right, your party will gain at the expense of mine and you will deserve the benefits and my party will deserve the electorate’s disdain.
Statement by Bruce R. Bartlett
September 23, 2005
Thank you for the opportunity to testify before you this morning. As you know, I testify as a Republican—I have served in senior political positions in Ronald Reagan’s White House and George H.W. Bush’s Treasury Department, and as executive director of the Joint Economic Committee, a cosponsor of this hearing. However, I do not represent the Republican Party or any organization with which I may be associated. I am here speaking only for myself.
I testify as someone who is very disenchanted with his party’s fiscal policy since 2001. Unlike the other witnesses, I am less concerned about the deficit per se or about the size of the tax cuts enacted over the last five years. Rather, what really bothers me is the increase in spending and expansion of government that my party has been responsible for.
I used to believe that the Republican Party was the party of small government. That’s why I became a Republican. I don’t believe that the federal government has the right to one penny more than absolutely necessary to fulfill its essential functions as spelled out in the Constitution. I think government is over-intrusive and could do what it has to do far more efficiently and at lower cost, which means with lower taxes.
Therefore, it bothers me a great deal when Republicans initiate new entitlement programs, massively expand pork-barrel spending, and show the most callous disregard for fiscal integrity. Not too many years ago, Ronald Reagan vetoed a politically popular highway bill because it contained 157 pork-barrel projects. The latest bill contained at least 5,000. Yet President Bush signed this $295 billion bill into law, despite having promised repeatedly to veto a bill larger than $256 billion.
For the life of me, I cannot understand why President Bush seems so incapable of using his veto pen. His father knew how to veto bills. He vetoed 29 of them in his four years in office. But in his first four-plus years, this President Bush has vetoed nothing. He is the first president since John Quincy Adams to serve a full term without vetoing anything. Curiously, Adams is also the only other son of a former president to become president—and his father, John Adams, didn’t veto anything, either.
When I complain about this to the White House, they tell me that it is very hard to veto bills when your party controls both Congress and the White House. But this explanation is simply implausible. Franklin D. Roosevelt had huge Democratic majorities, yet vetoed a record 372 bills. John F. Kennedy, Lyndon Johnson and Jimmy Carter also had large majorities of Democrats, yet Kennedy vetoed 12 bills during his short presidency, Johnson vetoed 16, and Carter vetoed 13.
I won’t bore this committee with numbers. You know them as well as I do. Suffice it to say that our fiscal situation is dire and growing worse by the day. My principal concern, however, is not with today’s deficits—even if they are swollen by Katrina and Rita-related emergency spending. What worries me is the retirement of the baby boom, the first of which turns 62 in 2008. I’m not saying that we are close to driving off a fiscal cliff, but clearly the implications of this event have not impacted on policymakers in any way whatsoever.
I have struggled with a way to illustrate the consequences of an aging population and its effect on the budget. This is the best I have been able to do. Social Security’s unfunded liability comes to 1.2 percent of GDP in perpetuity (1.4 percent without the trust fund)—about what is raised by the corporate income tax—according to that program’s actuaries. The comparable number for Medicare is 7.1 percent of GDP—about what is raised by the individual income tax. And remember that these figures are for the unfunded portion of these programs, so they are over and above payroll taxes.
The chilling conclusion, therefore, is that virtually 100 percent of all federal taxes, on a present value basis, do nothing but pay for Social Security and Medicare. Unless there are plans to abolish the rest of the federal government, large tax increases are inevitable.
Let me be clear that I am no advocate of higher taxes. I’m the one who drafted the Kemp-Roth bill back in the 1970’s and I have spent most of my career looking for ways to cut tax levels and tax rates. But that was predicated on an assumption those supporting tax cuts also wanted to downsize government. I never saw tax cuts as a substitute for spending cuts, but more as sugar to make the medicine go down. My ultimate goal was to reduce both taxes and spending.
Unfortunately, few in my party seem to share this philosophy any longer. For many, tax cuts have become a substitute for spending cuts. It truly amazes me how often I hear people on my side talk about cutting taxes as if this is the only thing necessary to downsize government. They seem genuinely oblivious to the fact that the burden of government is largely determined by the level of spending, not taxes. Nor do they understand that in the long-run, all spending must be paid for one way or another. Increasing spending today, therefore, absolutely guarantees that taxes will have to be raised in the future.
I am often criticized by friends on my side of the aisle for implicitly endorsing tax increases. I do no such thing. I am simply adding two and two and getting four while my friends seem to think there is some way of only getting three.
They also criticize me for implicitly abandoning the fight to cut spending and downside government. Again, I plead innocent. It is not I who has abandoned the fight, but my party. I don’t need to remind anyone here that the biggest spending increases in recent years passed Congresses with Republican majorities largely without Democratic votes. Nor do I need to remind anyone here that during the Clinton years we not only went from budget deficits to budget surpluses, but did so to a large extent by cutting spending—something my conservative friends seldom acknowledge.
Here’s the basic accounting. Defense spending fell by 1.4 percent of GDP between 1993 and 2000, and domestic discretionary spending fell from 3.8 percent to 3.3 percent. Even spending on entitlements fell for temporary demographic reasons, from 10.2 percent of GDP to 9.8 percent. Finally, interest on the debt fell, largely because of falling interest rates, from three percent of GDP to 2.3 percent. The result was an overall decline in spending of three percent of GDP, from 21.4 percent to 18.4 percent, the lowest level since 1966, before the Great Society geared up.
On the revenue side, individual income taxes rose by 2.5 percent of GDP, mainly as the result of rising incomes that pushed people up into higher tax brackets and higher capital gains taxes from the booming stock market. Corporate income taxes and payroll taxes added another 0.8 percent, for a total revenue increase of 3.3 percent of GDP. Thus lower spending and higher revenues constituted a fiscal turnaround of 6.3 percent of GDP, which explains how a deficit of 3.9 percent of GDP in 1993 became a budget surplus of 2.4 percent by 2000.
I don’t give President Clinton full credit for this performance. I think most of the credit goes to gridlock. Mr. Clinton wouldn’t support the Republican Congress’s spending and it wouldn’t support his. So for a blessed six years, government effectively was on automatic pilot. Sadly, unified government has led to an utter lack of restraint by my party that is simply inexcusable. It is extremely dismaying for me to hear House Majority Leader Tom Delay say that there is no fat in the budget and that Republicans have cut it to the bone. This is, quite frankly, ludicrous. My real fear, however, is that he may actually believe it.
I remain convinced that given the total lack of fiscal responsibility demonstrated by the Republican Party that very large tax increases are inevitable. I believe that the fiscal hole is now so large that it is unrealistic to think that we can just tinker with the tax system, as we did so often in the 1980’s, and raise enough revenue to pay for spending commitments that have been made. And under the circumstances, I have no faith whatsoever that spending will be significantly restrained—at least not by my side. They would first have to admit error and beg for forgiveness from people like me, something I don’t expect to be forthcoming any time soon.
Therefore, like it or not, we must travel the same route taken by the Europeans, who long before us made peace with the welfare state and tried to figure out how to pay for it with the least negative impact on economic growth and incentives. They all imposed a broad-based consumption tax called the value-added tax as an add-on tax to all the others. I think it is only a matter of time before we are forced to do the same thing and the longer we wait the more painful it will be when it is finally done. Unfortunately, we are more than likely going to have to be forced into it by a financial crisis of some sort. It would be better to avoid that cost and deal with our fiscal situation rationally. But I see no leadership on either side that would allow that to happen.
I don’t know when, where or how a financial crisis will develop. I only know that trends that can’t continue don’t. Since it is unlikely that the vast fiscal imbalance will be resolved with a whimper, it becomes a certainty that it will end with a bang. Among the areas ripe for triggering a crisis are a popping of the housing bubble, a crash of the dollar, a mistake by some big hedge fund, excessive tightening by the Fed and others too numerous to mention. It will take extraordinary luck and skill to avoid every boulder in the stream and I have little confidence that this administration has the personnel to even give us a fighting chance. There are too many Michael Browns at senior levels of the government today and too few Bob Rubins or Alan Greenspans.
Contrary to popular belief, I don’t think the American people are a bunch of children who only want hand-outs from the government and will only reward the party that promises them something for nothing. Experience and academic research confirm that they are more likely to support the candidate who treats the public purse with prudence and trust and not as a piggy bank to be routinely broken on a whim. In short, I think there is a political market for the party and the candidate who speaks honestly about the nature of the fiscal crisis that is looming. The payoff may not be immediate and the public trust has to be earned by more than just rhetoric. But if, as I believe, some event will eventually change the political landscape, voters will remember who spoke the truth and who mouthed the platitudes.
It’s dirty work, but someone has to do it. Since my party won’t do it, yours is going to have to. If it’s done right, your party will gain at the expense of mine and you will deserve the benefits and my party will deserve the electorate’s disdain.
Friday, September 23, 2005
Budget politics then and now
From Fox News of all the unlikely places:
The Washington Post reports that in 1987, President Ronald Reagan vetoed a transportation bill passed by Congress because it had 157 "earmarks"— money set aside for Congress members' pet projects that would ostensibly be considered too wasteful to pass as laws on their own merit.
Reagan made a show of his veto. It was a symbolic stroke against government waste, against the Democrats’ tradition of, for example, diverting every federal highway through West Virginia, then naming it after Sen. Robert Byrd.
Fast-forward to 2005. Republicans control the White House and both houses of Congress. Early on a Saturday morning in August — the day of the week, and the month of the year, least likely to attract media attention — President Bush signed into law a highway bill passed by his own party with more than 6,000 earmarked projects.
Bush signed the bill after sternly telling his party he'd veto any highway bill that spent more than $256 billion. He promptly "adjusted" that figure to $284 billion after complaints from party leaders. The bill Bush ultimately signed came at a price of $286 billion, $295 billion if you count a few provisions disguised to make the bill look cheaper than it actually is. Not exactly holding the line.
The Washington Post reports that in 1987, President Ronald Reagan vetoed a transportation bill passed by Congress because it had 157 "earmarks"— money set aside for Congress members' pet projects that would ostensibly be considered too wasteful to pass as laws on their own merit.
Reagan made a show of his veto. It was a symbolic stroke against government waste, against the Democrats’ tradition of, for example, diverting every federal highway through West Virginia, then naming it after Sen. Robert Byrd.
Fast-forward to 2005. Republicans control the White House and both houses of Congress. Early on a Saturday morning in August — the day of the week, and the month of the year, least likely to attract media attention — President Bush signed into law a highway bill passed by his own party with more than 6,000 earmarked projects.
Bush signed the bill after sternly telling his party he'd veto any highway bill that spent more than $256 billion. He promptly "adjusted" that figure to $284 billion after complaints from party leaders. The bill Bush ultimately signed came at a price of $286 billion, $295 billion if you count a few provisions disguised to make the bill look cheaper than it actually is. Not exactly holding the line.
Thursday, September 22, 2005
Two musical recommendations out of left field for the likeminded
The first is John Cale, "The Island Years," a compilation of 3 early to mid-70s albums. Much more conventional rock'n'roll than Cale's work with the early Velvet Underground, but very good nonetheless.
The other is "The Psychedelic Sounds of the 13th Floor Elevators," from 1967 or so. Despite the well-earned album title, this is not a time capsule (except perhaps if you listen to the lyrics, which I mostly haven't made out). Tough rather than hippy-dippy, with r & b roots that make it more a cousin of the Rolling Stones than of the Grateful Dead, albeit original and very much its own thing.
Not to wallow too much in the older stuff, I would also rate the New Pornographers' just-released "Twin Cinema" as good clean fun.
The other is "The Psychedelic Sounds of the 13th Floor Elevators," from 1967 or so. Despite the well-earned album title, this is not a time capsule (except perhaps if you listen to the lyrics, which I mostly haven't made out). Tough rather than hippy-dippy, with r & b roots that make it more a cousin of the Rolling Stones than of the Grateful Dead, albeit original and very much its own thing.
Not to wallow too much in the older stuff, I would also rate the New Pornographers' just-released "Twin Cinema" as good clean fun.
Monday, September 19, 2005
Excessive senses of entitlement
Bush isn't the only one; Derek Jeter is another.
In yesterday's game, he came up in the 9th inning with 2 outs, tying run on second. On the 1 and 2 count, he was leaning out over the plate, well into the strike zone. The pitcher threw a pitch on the inside half, clearly over the plate by several inches. Jeter jackknifed back like it was a brushback pitch. Called strike three, game over.
Jeter, in the locker room afterwards: "It was a ball."
In yesterday's game, he came up in the 9th inning with 2 outs, tying run on second. On the 1 and 2 count, he was leaning out over the plate, well into the strike zone. The pitcher threw a pitch on the inside half, clearly over the plate by several inches. Jeter jackknifed back like it was a brushback pitch. Called strike three, game over.
Jeter, in the locker room afterwards: "It was a ball."
Sunday, September 18, 2005
Understatement of the day
From David Brooks in today's New York Times: Bush has "never resolved the contradiction between his compassionate spending policy and his small-government tax policy."
Saturday, September 17, 2005
Why didn't I think of that?
Grover Norquist (aka Bathtub Boy) has suggested using tax cuts to pay for the Gulf Coast reconstruction.
The plan
From Mark Schmitt:
"While we're all [anticipating] ... even more cronyism with Karl Rove in charge of the reconstruction effort, let's not lose sight of the real reason Rove is the right man for the job.
"Ask yourself, what do you think Rove is thinking about right now? My guess: The 2006 election, and specifically, how they can set up a situation in which Democrats vote against or seem to oppose some sort of Gulf Coast reconstruction package."
As I read about Bush's speech, I actually found it distressing, hardened though I am by now, to think that there probably wasn't even the slightest modicum of good faith in his talk about rebuilding the Gulf Coast. Couldn't he limit his cynicism to doing a good job there, even if he wouldn't have bothered to otherwise, just because it might be good for him politically? But doing things well to get the credit is not how these guys operate. In the aftermath of a horrific disaster with people suffering and needing help, it is acutely painful to realize this.
I am reminded of the right-wing traitors in France 1940 who preferred losing to the Nazis to letting the left have any chance of holding power in a flourishing independent France. No foreign power here, but the vicious psychology is the same.
"While we're all [anticipating] ... even more cronyism with Karl Rove in charge of the reconstruction effort, let's not lose sight of the real reason Rove is the right man for the job.
"Ask yourself, what do you think Rove is thinking about right now? My guess: The 2006 election, and specifically, how they can set up a situation in which Democrats vote against or seem to oppose some sort of Gulf Coast reconstruction package."
As I read about Bush's speech, I actually found it distressing, hardened though I am by now, to think that there probably wasn't even the slightest modicum of good faith in his talk about rebuilding the Gulf Coast. Couldn't he limit his cynicism to doing a good job there, even if he wouldn't have bothered to otherwise, just because it might be good for him politically? But doing things well to get the credit is not how these guys operate. In the aftermath of a horrific disaster with people suffering and needing help, it is acutely painful to realize this.
I am reminded of the right-wing traitors in France 1940 who preferred losing to the Nazis to letting the left have any chance of holding power in a flourishing independent France. No foreign power here, but the vicious psychology is the same.
Friday, September 16, 2005
Never lose hope
According to the NY Times, Bush has ruled out tax increases to pay the Katrina bills, and says federal spending must be cut instead.
I guess this means he'll be announcing $200 billion in federal spending cuts for the current fiscal year any day now.
I guess this means he'll be announcing $200 billion in federal spending cuts for the current fiscal year any day now.
Thursday, September 15, 2005
President Mobutu
Bush's political strategy to deal with the political fallout from Katrina is now clear. Demand vast seas of spending that are called responses to Katrina. Make it so large, so totally without financing (or offsetting spending cuts of any kind), and in some other way so unacceptable to the Democrats that he can posture as the one who wants to do something about Katrina while they don't. This is the analogue to calling them soft on terrorism. The money itself will be wasted or looted by cronies, and spent on political and ideological goals having little to do with Katrina, on at least an Iraq war scale and perhaps even beyond that, since there's more you can do with the money at home and since, so far as they are concerned, they got away unscathed with the fraud and waste in Iraq.
You could call it politically brilliant, but it isn't really. It's simply the audacity, hard for the rest of us to imagine, that comes with a complete lack of civic virtue.
You could call it politically brilliant, but it isn't really. It's simply the audacity, hard for the rest of us to imagine, that comes with a complete lack of civic virtue.
Wednesday, September 14, 2005
Taking care of the really important stuff
From Robert Scheer in the LA Times, a snapshot of how the Bush Administration approaches disaster relief:
"After riding in a helicopter with the president and seeing machinery apparently working on the breached 17th Street levee, [Sen. Mary Landrieu of Louisiana] was shocked the next day to find the work mysteriously stopped. 'Flying over this critical spot again this morning, less than 24 hours later, it became apparent that yesterday we witnessed a hastily prepared stage set for a presidential photo opportunity; and the desperately needed resources we saw were this morning reduced to a single, lonely piece of equipment,' said the senator in a press release."
"After riding in a helicopter with the president and seeing machinery apparently working on the breached 17th Street levee, [Sen. Mary Landrieu of Louisiana] was shocked the next day to find the work mysteriously stopped. 'Flying over this critical spot again this morning, less than 24 hours later, it became apparent that yesterday we witnessed a hastily prepared stage set for a presidential photo opportunity; and the desperately needed resources we saw were this morning reduced to a single, lonely piece of equipment,' said the senator in a press release."
Tuesday, September 13, 2005
Departure of George Yin from the Joint Committee on Taxation
Courtesy of Paul Caron's TaxProf blog, I note that George Yin is leaving the position as Chief of Staff of the Joint Committee on Taxation that he has held since 2003, in order to return to the University of Virginia Law School. The departure is effective November 18, by which time I presume the powers that be (the heads of the House Ways and Means and Senate Finance Committees) will be eager to have found a new JCT Chief of Staff.
I am glad for George, since the pressures of being JCT Chief of Staff in the current tax policy environment strike me as rather high relative to the rewards (which clearly had to be psychic rather than monetary). I am also glad for myself and the others in our biz, who will welcome George back to the academic world. On the other hand, this may be bad news from the standpoint of tax policymaking in the U.S. Congress. George was undoubtedly a force for good, whether the influence he could exert through his position was great or small.
When the position of JCT Chief opened up a few years ago, I was concerned that the leadership of the tax committees would be eager to appoint a hack. I had two reasons for expecting this. The first was that, with both houses under the control of the same party, one of the past reasons for picking a reputable and independent chief - that he or she would be a trustworthy arbiter between the two Houses, rather than being politically beholden or motivated - might no longer apply. To be sure, JCT reputability and independence have survived past instances of one-party control. But the second reason was that the central Republican leadership in Congress, which often exercises a tight rein over committee chairs, strikes me as having, like the Bush Administration, very little interest in independent or (as liberal bloggers are fond of saying) reality-based) policy input from experts.
Given this, I was very pleasantly surprised, verging on shocked, when someone as honorable, reputable, independent, and expert in tax policy as George was picked for the job. Since they picked a good person once, maybe they will do it again. For that matter, if the Republican Congressional leadership is serious about the fundamental tax reform process that the Bush Administration purports to be serious about, then a reputable, independent expert is exactly what they need. But we will see. I suspect that many of the qualified candidates for the job would be skeptical that the position is worth taking unless they not only get good assurances but also believe that there will be a serious tax reform process - which there may not be, what with Katrina, Bush's apparent political decline, etc., even if the Republicans do seriously intend it.
I am glad for George, since the pressures of being JCT Chief of Staff in the current tax policy environment strike me as rather high relative to the rewards (which clearly had to be psychic rather than monetary). I am also glad for myself and the others in our biz, who will welcome George back to the academic world. On the other hand, this may be bad news from the standpoint of tax policymaking in the U.S. Congress. George was undoubtedly a force for good, whether the influence he could exert through his position was great or small.
When the position of JCT Chief opened up a few years ago, I was concerned that the leadership of the tax committees would be eager to appoint a hack. I had two reasons for expecting this. The first was that, with both houses under the control of the same party, one of the past reasons for picking a reputable and independent chief - that he or she would be a trustworthy arbiter between the two Houses, rather than being politically beholden or motivated - might no longer apply. To be sure, JCT reputability and independence have survived past instances of one-party control. But the second reason was that the central Republican leadership in Congress, which often exercises a tight rein over committee chairs, strikes me as having, like the Bush Administration, very little interest in independent or (as liberal bloggers are fond of saying) reality-based) policy input from experts.
Given this, I was very pleasantly surprised, verging on shocked, when someone as honorable, reputable, independent, and expert in tax policy as George was picked for the job. Since they picked a good person once, maybe they will do it again. For that matter, if the Republican Congressional leadership is serious about the fundamental tax reform process that the Bush Administration purports to be serious about, then a reputable, independent expert is exactly what they need. But we will see. I suspect that many of the qualified candidates for the job would be skeptical that the position is worth taking unless they not only get good assurances but also believe that there will be a serious tax reform process - which there may not be, what with Katrina, Bush's apparent political decline, etc., even if the Republicans do seriously intend it.
Monday, September 12, 2005
Boris Bittker
Boris Bittker, the eminent tax law professor who was at Yale Law School for almost 60 years, died last week at the age of 88. He was an extraordinary man whose work continues to interest younger generations of tax academics despite all the changes in intellectual life over the last few decades.
I never knew Bittker personally, even though I attended Yale Law School while he was still teaching. I took all of my tax courses with Marvin Chirelstein, whose delightful wit made me think him the preferable choice. When I was a student there, Bittker had a reputation as a bit of a curmudgeon, although actually not in a way that did him personally any discredit. The story was that he was more or less tired of spending his time talking to people who didn't know or understand the subject nearly as well as he did. So in a way it was a tribute to his intelligence and knowledge, as well as his taste for more penetrating conversation than we callow twenty-somethings could offer him.
In a recent article of mine, concerning tax expenditures and published in a recent Tax Law Review, I invoked the old Isaiah Berlin phrase about the fox who knows many things and the hedgehog who knows one big thing. Bittker was the fox, and Stanley Surrey the hedgehog. Bittker is famous for his naysaying when people such as Surrey tried, as he saw it, to over-simplify in support of big themes. I do feel that Bittker was a bit too much of a nihilist, sometimes overly pooh-poohing important things in the interest of contrarian exactitude. But on the other hand, this is a man who, in the 1960s, before economics reasoning and training had greatly penetrated law schools, outpointed leading public economics figures in economics. I am thinking of the "comprehensive tax base" debate, where he hit them with the theory of the second best (under which minimizing total distortion need not imply minimizing the number of separately countable errors). But still I think he was on the wrong side of that fight overall. Another thing I said about him in that TLR article was that his response to Surrey, in their debate concerning tax expenditures, was a "yes, but" that read like a "no."
While Bittker sometimes pushed his contrarianism too far, obscuring important points because they needed to be qualified in this way or that, his stance was quite aesthetically appealing. He also had a distinctive voice as a writer, witty and controlled, that made a striking contrast with the usual run of the mill. He was a person who we contrarian younger folk, not always very impressed with the immediately preceding generation, admired even if, with the passage of time, we were going a different way.
I never knew Bittker personally, even though I attended Yale Law School while he was still teaching. I took all of my tax courses with Marvin Chirelstein, whose delightful wit made me think him the preferable choice. When I was a student there, Bittker had a reputation as a bit of a curmudgeon, although actually not in a way that did him personally any discredit. The story was that he was more or less tired of spending his time talking to people who didn't know or understand the subject nearly as well as he did. So in a way it was a tribute to his intelligence and knowledge, as well as his taste for more penetrating conversation than we callow twenty-somethings could offer him.
In a recent article of mine, concerning tax expenditures and published in a recent Tax Law Review, I invoked the old Isaiah Berlin phrase about the fox who knows many things and the hedgehog who knows one big thing. Bittker was the fox, and Stanley Surrey the hedgehog. Bittker is famous for his naysaying when people such as Surrey tried, as he saw it, to over-simplify in support of big themes. I do feel that Bittker was a bit too much of a nihilist, sometimes overly pooh-poohing important things in the interest of contrarian exactitude. But on the other hand, this is a man who, in the 1960s, before economics reasoning and training had greatly penetrated law schools, outpointed leading public economics figures in economics. I am thinking of the "comprehensive tax base" debate, where he hit them with the theory of the second best (under which minimizing total distortion need not imply minimizing the number of separately countable errors). But still I think he was on the wrong side of that fight overall. Another thing I said about him in that TLR article was that his response to Surrey, in their debate concerning tax expenditures, was a "yes, but" that read like a "no."
While Bittker sometimes pushed his contrarianism too far, obscuring important points because they needed to be qualified in this way or that, his stance was quite aesthetically appealing. He also had a distinctive voice as a writer, witty and controlled, that made a striking contrast with the usual run of the mill. He was a person who we contrarian younger folk, not always very impressed with the immediately preceding generation, admired even if, with the passage of time, we were going a different way.
Approaching budgetary calamity
Stan Collender, a leading budgetary expert, has the following to say about Katrina's likely influence on federal budgetary politics:
"A $500 billion deficit in fiscal 2006, which begins in about two weeks, not only would be not surprising, at this point it should probably be anticipated ...
"But a higher deficit isn’t the only thing that was changed by Katrina: Federal budget politics and procedures have clearly been altered as well. Indeed, the revised rhetoric of the past week or so, the still dazzlingly and dizzyingly demands for all types of federal aid, and the weakened position of the Bush administration mean that Katrina is likely to be looked at as a defining moment for fiscal as well as physical reasons.
"The first big change is that the deficit is now even less of an issue in Washington than it was before Katrina hit.
"In the short term, which in this case will likely last at least all the way through fiscal 2006, concern about the deficit easily and continuously will be trumped by the need to respond to the situation in the Gulf states.
"Some Katrina-related spending, such as what is now expected to be a significant increase in the budget for the Federal Emergency Management Agency and other types of disaster planning and assistance, will be permanent rather than one-time changes. And if history is any guide, some spending that should end relatively quickly -- such as aid for industries whose operations supposedly have been affected in some way by the hurricane, will continue long after Katrina has ceased to have any appreciable impact.
"The federal budget process will also be affected significantly, perhaps even overwhelmingly, because most of the additional spending will be approved throughout the year in supplemental appropriations. As the Bush administration has shown with its funding for activities in Iraq, this additional spending does not need to be included in the president’s budget, and it almost certainly will not be assumed by Congress when it considers the congressional budget resolution each year.
"As a result, the official deficit forecasts are very likely to be wildly wrong. The claims the White House and Congress make about the projected deficit when the president’s budget is released or budget resolution adopted will not, therefore, be as accurate or newsworthy as they have been up to now.
"And they haven’t been that accurate up to now.
"The growing use of supplemental appropriations may make both the president’s budget and congressional budget resolutions into nonevents. This will be even more true if, as typically happens, emergency supplemental appropriations become legislative trains for spending that has little to do with Katrina or Iraq. For example, there is little doubt that a good deal of ongoing funding for various departments and agencies will be approved in supplementals rather than in their regular annual appropriation. This will allow everyone to claim he or she is holding the line on spending when the truth will be just the opposite.
"It will also severely limit the amount of oversight on what is being spent. Especially when they are supposedly related to an emergency, supplemental appropriations virtually never receive the same level of review or scrutiny as other bills. They are typically drafted, debated, adopted and signed quickly -- either because the funds are needed within a very narrow timeframe or because the leadership doesn’t want people to see what the bills actually include ...
"Barring some type of unexpected offsetting event such as Wall Street demanding the deficit be reduced, [the deficit] issue is simply gone for the foreseeable future."
Back to me. Given that we had about a $70 trillion fiscal gap before any of this happened, I would say that a calamitous Weimar Germany-style crisis involving hyper-inflation and the collapse of US government credit has become both significantly more likely to happen, and likely to happen sooner. Barring a dramatic change in the rate of healthcare expenditure growth, which would have to happen on its own since no one in Washington is addressing it, we have known for quite a while that the US is going to face fiscal collapse UNLESS Congress and the President address it responsibly in time, and in the interim retain credibility with financial markets as planning to address it responsibly.
That seems less likely than ever.
The Bush Administration's total lack of concern about this is truly astounding. The Reagan and Bush I Administrations were run by grown-ups who took much less adverse fiscal situations very seriously. But the current Administration never has addressed, and never will address, any crisis, no matter how predictable, until it has hit in full force (and even then not until it has My Pet Goat-ed for a while). "Bin Laden Determined to Attack in US" didn't do it. Warnings that Iraq would have postwar unrest and a likely insurgency didn't do it. And needless to say, days of warning about the hurricane, and even the first few days after the levees burst, didn't do it.
A budgetary crisis is completely predictable, but there will be no planning for it and absolutely no consideration given to heading it off until either (1) it is too late, or (2) some other Administration that has both the will and the political leeway to start addressing it is on the scene.
"A $500 billion deficit in fiscal 2006, which begins in about two weeks, not only would be not surprising, at this point it should probably be anticipated ...
"But a higher deficit isn’t the only thing that was changed by Katrina: Federal budget politics and procedures have clearly been altered as well. Indeed, the revised rhetoric of the past week or so, the still dazzlingly and dizzyingly demands for all types of federal aid, and the weakened position of the Bush administration mean that Katrina is likely to be looked at as a defining moment for fiscal as well as physical reasons.
"The first big change is that the deficit is now even less of an issue in Washington than it was before Katrina hit.
"In the short term, which in this case will likely last at least all the way through fiscal 2006, concern about the deficit easily and continuously will be trumped by the need to respond to the situation in the Gulf states.
"Some Katrina-related spending, such as what is now expected to be a significant increase in the budget for the Federal Emergency Management Agency and other types of disaster planning and assistance, will be permanent rather than one-time changes. And if history is any guide, some spending that should end relatively quickly -- such as aid for industries whose operations supposedly have been affected in some way by the hurricane, will continue long after Katrina has ceased to have any appreciable impact.
"The federal budget process will also be affected significantly, perhaps even overwhelmingly, because most of the additional spending will be approved throughout the year in supplemental appropriations. As the Bush administration has shown with its funding for activities in Iraq, this additional spending does not need to be included in the president’s budget, and it almost certainly will not be assumed by Congress when it considers the congressional budget resolution each year.
"As a result, the official deficit forecasts are very likely to be wildly wrong. The claims the White House and Congress make about the projected deficit when the president’s budget is released or budget resolution adopted will not, therefore, be as accurate or newsworthy as they have been up to now.
"And they haven’t been that accurate up to now.
"The growing use of supplemental appropriations may make both the president’s budget and congressional budget resolutions into nonevents. This will be even more true if, as typically happens, emergency supplemental appropriations become legislative trains for spending that has little to do with Katrina or Iraq. For example, there is little doubt that a good deal of ongoing funding for various departments and agencies will be approved in supplementals rather than in their regular annual appropriation. This will allow everyone to claim he or she is holding the line on spending when the truth will be just the opposite.
"It will also severely limit the amount of oversight on what is being spent. Especially when they are supposedly related to an emergency, supplemental appropriations virtually never receive the same level of review or scrutiny as other bills. They are typically drafted, debated, adopted and signed quickly -- either because the funds are needed within a very narrow timeframe or because the leadership doesn’t want people to see what the bills actually include ...
"Barring some type of unexpected offsetting event such as Wall Street demanding the deficit be reduced, [the deficit] issue is simply gone for the foreseeable future."
Back to me. Given that we had about a $70 trillion fiscal gap before any of this happened, I would say that a calamitous Weimar Germany-style crisis involving hyper-inflation and the collapse of US government credit has become both significantly more likely to happen, and likely to happen sooner. Barring a dramatic change in the rate of healthcare expenditure growth, which would have to happen on its own since no one in Washington is addressing it, we have known for quite a while that the US is going to face fiscal collapse UNLESS Congress and the President address it responsibly in time, and in the interim retain credibility with financial markets as planning to address it responsibly.
That seems less likely than ever.
The Bush Administration's total lack of concern about this is truly astounding. The Reagan and Bush I Administrations were run by grown-ups who took much less adverse fiscal situations very seriously. But the current Administration never has addressed, and never will address, any crisis, no matter how predictable, until it has hit in full force (and even then not until it has My Pet Goat-ed for a while). "Bin Laden Determined to Attack in US" didn't do it. Warnings that Iraq would have postwar unrest and a likely insurgency didn't do it. And needless to say, days of warning about the hurricane, and even the first few days after the levees burst, didn't do it.
A budgetary crisis is completely predictable, but there will be no planning for it and absolutely no consideration given to heading it off until either (1) it is too late, or (2) some other Administration that has both the will and the political leeway to start addressing it is on the scene.
Sunday, September 11, 2005
Bush's budget plans
According to an article in Time Magazine, Bush's main plan to dig himself out of political trouble on the New Orleans catastrophe is to "[s]pend freely, and worry about the tab and the consequences later. 'Nothing can salve the wounds like money,' said an official who helped develop the strategy."
Also - big surprise - "[t]here are no plans to delay tax cuts to pay for the New Orleans reconstruction or the Iraq war."
Why worry about paying for things when you can simply go on issuing debt and printing money?
Also - big surprise - "[t]here are no plans to delay tax cuts to pay for the New Orleans reconstruction or the Iraq war."
Why worry about paying for things when you can simply go on issuing debt and printing money?
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