Right Thinking From The Left Coast
Reality is merely an illusion, albeit a very persistent one. - Albert Einstein

Sunday, February 13, 2011

Baby Steps

This is somewhat promising:

White House Budget Director Jacob Lew said the Obama administration’s 2012 budget would save $1.1 trillion over the next 10 years by cutting programs to rein in a deficit that may reach a record $1.5 trillion this year.


Democratic President Barack Obama sends the third budget of his presidency to Congress tomorrow. About two-thirds of the savings would come from a five-year spending freeze and cuts in domestic programs and an additional one-third would come from revenue increases, including limiting itemized tax deductions for the wealthy, an administration official said.


Lew, on CNN, said that by 2015, the budget deficit would decline to about 3 percent of U.S. economy, from an estimate of about 9.8 percent this year, according to the Congressional Budget Office. Trimming the budget deficit to 3 percent of the nation’s gross domestic product is a level most economists deem sustainable.

This doesn’t go far enough.  And it doesn’t address the $100 trillion in entitlement obligations. Tax reform is not out there yet—something that could counteract the economic impact of any tax hikes.

But it’s a shuddering baby step in the right direction.  It encourages me because we’re not really debating whether to cut spending any more.  We’re debating how much to cut it and where.  That’s a good debate to have.  (Also, I must admit that I’m guilty of looking forward to the explosion from the Left.  Look for Paul Krugman to post a spittle-flecked rant by noon tomorrow.)

Hopefully, the Republicans will up the ante.  Hopefully, they’ll touch the third rail of entitlements.  I don’t want to jinx it.  But the mere thought is beginning to speculate about the merest possibility of crossing my mind that we might find a way to fix this thing.

Update: Obama is also proposing malpractice reform.  I like the idea in principle.  To give a personal example of why this matters: Texas has one of the best malpractice environments in the country; Pennsylvania one of the worst.  We had no problem finding great doctors in Texas and getting appointments.  In Pennsylvania, we struggle to find good doctors and have seen several move their practices to more welcoming states.

However, I think this is a state issue, not a federal one.  Reform of class actions and the federal courts is a good idea.  But malpractice reform should stay at the state level.

Update: Krugman does not disappoint, although the spittle quotient is low for him.  This just shows the lie behind Keynesianism.  The idea is that you run deficits during recessions but run surpluses during good times to make it up.  Funny, how they never want to do that second part.

Posted by Hal_10000 on 02/13/11 at 08:20 PM in Politics   Law, & Economics  • (0) TrackbacksPermalink
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