Things We Can Do Without

Megan McArdle discusses why we're unlikely to see the Postal Service disappear soon enough, even though it's an anchronism and a budget drain. Personally, if we can save $23 billion a year in spending, I'll gladly forego the need to send and receive Christmas cards. Shouldn't we be sending those via email anyway?

A Good Start, Mr. McDonnell

My new governor takes on some sacred cows in his first budget proposal...

Virginia Gov. Robert F. McDonnell (R) has privately recommended cutting $730 million from K-12 education and $300 million from health programs, as well as changing the state retirement system and requiring 10 days of furloughs for state employees, all to help offset a $2.2 billion budget shortfall over two years, according to sources familiar with the plan.

The K-12 reductions would loosen the state's basic educational standards while reducing funds for support staff, supplemental salaries for coaches and teachers who serve as club sponsors, and health insurance for teachers.

The health cuts would reduce mental-health treatment beds by 232, take 5 percent in funds from community service boards that offer substance abuse and mental health treatment programs, and freeze enrollment for a program that provides insurance to low-income children.

The governor is also recommending millions of dollars in trims to public libraries, shuttering some state parks and phasing out all public broadcasting support over four years.

My biggest complaint is that he isn't cutting enough, but this is hopefully just a start. The actual budget is slightly different than those reported cust, but it's still a better than decent start. And McDonnell's rhetoric, while sympathetic, is a lot better than the woe-is-me stuff from the other side...

"All the cuts gave me heartburn,'' McDonnell said. "All of them were difficult because I know that behind every cut there is a Virginian -- somebody in this room or somebody out of the 7.8 million people we have -- that might be affected by that."

Reponse to the proposed reductions was swift.

"We're really throwing kids in the poorest districts under the bus,'' said Robley S. Jones, director of government affairs for the Virginia Education Association, which represents teachers. ''Honestly, I don't know what school systems like Lee and Petersburg are going to do."

"Governor McDonnell, state legislators, and other officials must be aware that cutting funding to community mental health services, reducing Medicaid provider reimbursement rates, and eliminating acute inpatient beds puts extraordinary pressure on an already overburdened system," said Mira Signer, executive director of NAMI Virginia. "Individuals with serious mental illness need to be able to access treatment and services at the time when they go looking for them; if they aren't available due to waiting lists or too few providers, there are consequences."

"Virginia ranks 48th among the states for Medicaid spending per capita and 45th in Medicaid spending as a share of the state budget," says Laurens Sartoris, president of the Virginia Hospital & Healthcare Association. "Virginia's Medicaid program already is extraordinarily lean. There comes a point when cuts of this magnitude will hurt all Virginians and cause long-term damage to Virginia's health care delivery system."

You know what, guys? Make do with less. The money funding these budgets comes out the pockets of people who have to do that in the midst of a recession. They lose their jobs, take pay cuts, and work harder for less. Unlike the federal government, states can't print money, and raising taxes drives people (and jobs with tax revenue) out of state. Kudos, Governor. Now let's cut some more.

The Latest Reason Why Unions Continue To Become Less Popular

Watching this report pisses me off to no end.



Forced unionization of child-care providers via the state legislature -- this is exactly the type of stuff that leaves people thinking their politicians are corrupt to the core and working solely for special interests. To be perfectly fair, the child care providers are receiving taxpayer subsidies, so it's within the government's right to restrict how much money they should receive. But handing that taxpayer money to a union doesn't exactly strike me as something taxpayers want -- at least the subsidies for low-income taxpayers to get child care services might be something the majority supports. Having a portion of those subsidies directly sent to a union strikes me as something even a majority of union members would oppose. And yet Michigan's government does it.

Oh, well it's not like Michigan has any examples of industries that might have been adversely impacted by unions.

The Narrative

John Ellis does a good job encapsulating what I was trying to say before about messaging not being Obama's problem, but does so in a much grander way and gets to a more important point...

It's not a staff issue that is causing the President's political deflation. And it's not a communications issue (as in: if only the Obama Administration communicated their ideas better, everything would be okay). It's not even a political issue; the GOP doesn't have a national act to speak of and Democrats continue to hold solid majorities in both Houses of Congress. The Obama Administration's problem is narrative.

Specifically, the Grand Narrative of our time is The Reckoning and the Restructuring. The Reckoning is all this debt coming home to roost. The Restructuring is what we're going to do about it.

The Reckoning is plain for all to see. Consumers are broke, companies are reeling under massive debt loads, and the US government is underwater as never before. Compounding these problems is an avalanche of unfunded liabilities that will soon come due. To cite just one small example, for the first time in its history, Social Security will run cash negative this year. The cost of Medicare is set to explode as baby boomers retire. You know all this. There's no point repeating all the scary numbers.

The Reckoning requires restructuring. Restructuring is not avoidable, it is inevitable. The sooner we do it, the less painful it will be for all concerned. Specifically, we must decide how to make our pension system (Social Security) and our current national health care system (Medicare and Medicaid) sustainable. We must restructure our debt. We must get 15% more performance out of our military on 15% less budget. We must get 25% more performance out of all other government services on 25% less expenditure.

In addition, we need to think about what taxes to raise, whether we sell land, whether we acquire nation-states or territories (Africa states? Siberian land?), whether we merge with Canada to form a more robust (and energy independent) mega-nation. These are the big issues of US restructuring. And they are all on the table.

Except they are not. The Obama Administration keeps talking at us like its 1998 and we can have a "green" jobs program and national health insurance and "cap and trade" legislation and $250 million criminal proceedings for homicidal Islamic psychopaths in downtown Manhattan. We don't have $250 million for the KSM trial in Manhattan. Everybody knows that except, apparently, the Obama Administration.

(hat tip: Jim Geraghty, whose post about this is equally worthwhile of a read). I'm not endorsing a call to merge with Canada, unless they agree to ban curling first. Seriously, Ellis is on to something important here. People who work in private industry have seen friends, colleagues, competitors, etc. all lose their jobs. They have cut back on spending at the personal level, and small businesses have tightened their belt. But what they see from government spending and future deficits scares the hell out of them. I know, because I'm legitimately worried. Our politicans are not solving the problem of fiscal solvency -- they're simply kicking the can down the road. They may claim that the problem is systemic, and they maybe right. But the system needs a repair, or our children really will see a lower standard of living and less opportunity.

Maybe He Meant 250,000 Pennies

Hmmm. I remember this pledge...



Now this was already proven wrong when federal taxes on tobacco were raised, but the President skated by on that one. But why do I get to read this today?

President Barack Obama said he is “agnostic” about raising taxes on households making less than $250,000 as part of a broad effort to rein in the budget deficit.

Obama, in a Feb. 9 Oval Office interview, said that a presidential commission on the budget needs to consider all options for reducing the deficit, including tax increases and cuts in spending on entitlement programs such as Social Security and Medicare.

“The whole point of it is to make sure that all ideas are on the table,” the president said in the interview with Bloomberg BusinessWeek, which will appear on newsstands Friday. “So what I want to do is to be completely agnostic, in terms of solutions.”

Obama repeatedly vowed during the 2008 presidential election campaign that he would not raise taxes on individuals making less than $200,000 and households earning less than $250,000 a year. When senior White House economic adviser Lawrence H. Summers and Treasury Secretary Timothy F. Geithner suggested in August that the administration might be open to going back on that pledge, White House press secretary Robert Gibbs quickly reiterated the president’s promise.

In the interview, Obama said that putting preconditions on the agenda of a bipartisan advisory commission, which he said he would soon establish, would just undermine its purpose.

Remember, it's not his fault, it's the fault of that nasty commission. Ed Morrissey breaks it down...

What changed? Obama’s economic policies have had the effect that we predicted they would during the campaign. The White House sees trillion-plus budget deficits for most of the next ten years, thanks to massively expanding federal budgets and the drag they put on economic growth. Either Obama has to drastically reduce federal spending and the intrusion it creates in American lives, or he has to hike taxes in a broad manner to generate enough income to offset the spending. Taxing just the upper 5% isn’t an option.

I like Jim Geraghty's idea about reporters finding a way to bring YouTube clips to press conferences. The truth is, this is the sort of promise people will hold a politician to -- it's pretty easy to know whether your taxes went up or down and what your salary was. All politicians renege on promises made to get elected -- but reneging on ones that affect voter pocketbooks isn't the best idea.

Great News To Start A Depressing Month

Depressing budget news to start the month of February...

President Barack Obama sent Congress a $3.83 trillion budget on Monday that would pour more money into the fight against high unemployment, boost taxes on the wealthy and freeze spending for a wide swath of government programs.
The deficit for this year would surge to a record-breaking $1.56 trillion, topping last year's then unprecedented $1.41 trillion gap. The deficit would remain above $1 trillion in 2011 although the president proposed to institute a three-year budget freeze on a variety of programs outside of the military and homeland security as well as increasing taxes on energy producers and families making more than $250,000.

Echoing the pledge in his State of the Union address to make job creation his top priority, Obama put forward a budget that included a $100 billion jobs measure that would provide tax breaks to encourage businesses to boost hiring as well as increased government spending on infrastructure and energy projects. He called for fast congressional action to speed relief to millions left unemployed in the worst recession since the 1930s.

After a protracted battle on health care dominated his first year in office and led to a string of Democratic election defeats, the administration hopes its new budget will convince Americans the president is focused on fixing the economy.

Republicans complained about Obama's proposed tax increases and said the huge projected deficits showed he had failed to get government spending under control. But administration officials argued that Obama inherited a deficit that was already topping $1 trillion when he took office and given the severity of the downturn, the president had to spend billions of dollars stabilizing the financial system and jump-starting growth.

Obama's job proposals would push government spending in 2010 to $3.72 trillion, up 5.7 percent from last year. Obama's blueprint for the 2011 budget year, which begins Oct. 1, would increase spending further to $3.83 trillion, 3 percent higher than projected for this year.

Much of the spending surge over the past two years reflects the cost of the $787 billion economic stimulus measure that Congress passed in February 2009 to deal with the worst economic downturn since the Great Depression. The surge in the deficits reflects not only the increased spending but also a big drop in tax revenues, reflecting the 7.2 million people who have lost jobs since the recession began and weaker corporate tax receipts.

Shocking that a weak economy might produce lower tax receipts. I'm sure raising taxes will solve the problem. Meanwhile, Glenn Reynolds publishes my favorite depressing chart ever once again, along with this comment...

Notice anything? Like maybe how Bush’s deficits are dwarfed by Obama’s? And maybe how the deficit was falling throughout Bush’s second term? Until the very end, when TARP — hardly popular with the Tea Party crowd — rolled out. The “Bush was as big a spender as Obama” line is just a flat-out lie, which the apologists for the powers that be hope you’ll buy because . . . well, because a lie is pretty much all they’ve got at this point.

The chart's depressing, but at least we've got the spending freeze, right? Oh, wait...



(hat tip: Jonah Goldberg at the Corner) I will say that the spending freeze illustration made me want to do some Jello shots. Or just get drunk. So it's not all bad.

Econ Nerds Have Their Anthem

The fact that I enjoyed this video probably makes me more of a nerd than I ever believed.



(hat tip: Megan McArdle) I would make this an annoying song post, except that this is so original that the refrain won't annoy me for at least another day or so. Nice touch in naming the bartenders Tim and Ben, by the way.