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Econ With Attitude

May 17, 2011

I admit that I’m an engineer.  While the basics of calculus (Area under the curve!  Slope of the line! Yay, TEAM!) have always seemed pretty easy to me, I have no clue about economics.  I suppose I just need to immerse myself in some Friedman and Hayek to get over it, but I’ve got work to do…

So anyway, when I find someone I can understand, and who’s also funny, I go for it.  And I just wanted to say that Kevin Williamson doesn’t get enough kudos for both.  I highly recommend the Exchequer Blog at National Review Online, which has such gems as:

Repeat as necessary: Medicare, Medicaid, Social Security, and national defense is where the spending is. Raising taxes enough to cover that spending and stabilize the debt would mean an 88 percent increase in every federal tax — not just for “the rich,” but for everybody, according to IMF estimates. Raising taxes on the middle class to support Social Security and Medicare for the middle class is a shell game. You may as well just cut the benefits: essentially the same outcome, but more cleanly executed.

You are not going to balance the budget on tax hikes only on people you do not like. You are not going to balance the budget on pulling out of Afghanistan (wise as that might be) or on eliminating foreign aid (desirable as that is) or on shuffling Uncle Sam’s real-estate portfolio (prudent though that may be). You are not going to balance the budget on eliminating waste, fraud, and abuse.

…which helps put spending in perspective.  Or this:

The U.S. government is not very good at being in the mortgage business. The GSEs have been sties of corruption and fraud, staffed by the worst sort of bottom-feeding political careerists this country is capable of producing. The distortions that government policy introduced in the housing and mortgage markets were a key factor (though not the only factor) in the housing bubble and the financial crisis of 2008.

Rather than liquidate the portfolios of Fannie Mae and Freddie Mac as a prelude to shutting down these government-backed financial malefactors and allowing the market to price mortgages (and houses) as it will, a bill unveiled today would replace the two GREs with five GREs, the securities of which would be explicitly guaranteed by the federal government. This is a “bipartisan compromise,” meaning that it is the product of roughly equal inputs from the Stupid Party and the Evil Party.

…which, besides making me snort out loud amidst the cubcles, starts to make sense.

Anyway, I just thought I’d point that out for those of you who check in.

2 Comments leave one →
  1. May 17, 2011 11:16 am

    Jim, I created fictional economic and fiscal models to support my upcoming novel, so I know quite a bit about the budget. The first quote from EB is spot-on. I slashed all discretionary spending (defense and non-defense), cut mandatory spending outside the big 3 entitlements, eliminated mid-year appropriations (impossible), and raised revenues to record levels, and we still reach dangerous debt levels within 20 years.

    There’s no way to keep the entitlement programs off the table.

  2. ellend permalink
    May 17, 2011 10:33 am

    That last paragraph makes me shake my head. Maybe the catastrope predicted for 2012 is complete global economic meltdown. That would create as much hardship and chaos as a physical disaster.

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