Monday, April 18, 2011

Heritage: An Open Letter to Paul Krugman

From "An Open Letter to Paul Krugman" from Bill Beach, Director of the Center for Data Analysis at the Heritage Foundation:

"Over the past two weeks, you have relentlessly engaged in dishonest, deceptive and factually incorrect critiques of Heritage’s recent analysis of the Ryan budget plan, and they need to be addressed. With all of the work good people of every political stripe need to be doing in Washington today, the last thing we all have time for is correcting your typically contrived commentary. But when The New York Times gives you such a platform to spread distortions, they necessitate a response.


26 Comments:

At 4/18/2011 7:01 PM, Blogger VangelV said...

It won't matter because the media and the public have no interest in the truth. Those that supported Paul Ryan's false cuts will continue to think that the Republicans put their necks out to save money for taxpayers. Those that think that they went too far will continue to accept Krugman's lies. Meanwhile the economy is heading towards the abyss and the USD is about to collapse after the usual dead cat bounce or two.

 
At 4/18/2011 7:05 PM, Blogger Benjamin said...

Vange-

In one year, what will the dollar trade for, against some major currencies?

 
At 4/18/2011 7:39 PM, Blogger AIG said...

"Vange-

In one year, what will the dollar trade for, against some major currencies?"

You're asking the man who measures inflation by the weight of cheddar cheese packets.

 
At 4/18/2011 8:01 PM, Blogger Paul said...

Vangel,

There's nothing false about Ryan's cuts, regardless of what Lew Rockwell tells you. The cuts could be deeper, I agree, but the real problem is Benji's boyfriend and the Democrat brick wall in the Senate.

 
At 4/18/2011 9:19 PM, Blogger Hydra said...

Vange zero, AIG -1, Paul -2.

 
At 4/19/2011 7:41 AM, Blogger VangelV said...

Vange-

In one year, what will the dollar trade for, against some major currencies?


It all depends on the currency. As much as I hate the USD, many other currencies seem to be in worse shape. All fiat currencies have constituencies that want them to go down so I would avoid them. It is my guess that the best place to be will continue to be the precious metals, particularly if you want to look out two or more years into the future. The key to the volatility will be the perception of what happens to the quantitative easing measures and the budgets. I say perception because the math makes it impossible to avoid a collapse of the markets OR the currency. The way I see it, it is hard to go wrong betting on the voter doing something stupid.

 
At 4/19/2011 7:45 AM, Blogger VangelV said...

There's nothing false about Ryan's cuts, regardless of what Lew Rockwell tells you. The cuts could be deeper, I agree, but the real problem is Benji's boyfriend and the Democrat brick wall in the Senate.

Under the Ryan plan you will spend about $150 billion more than in the previous year. That is not a cut. I see that many others have figured this out.

http://www.youtube.com/watch?v=GsQlkU3eN-c&feature=player_embedded

 
At 4/19/2011 8:07 AM, Blogger Paul said...

Vangel,

"Under the Ryan plan you will spend about $150 billion more than in the previous year. That is not a cut."


Under the Ryan plan governmment spending, and the deficit shrinks as a % of GDP. That is indeed a cut. This is a great step in the right direction.

 
At 4/19/2011 8:29 AM, Blogger VangelV said...

Under the Ryan plan governmment spending, and the deficit shrinks as a % of GDP. That is indeed a cut. This is a great step in the right direction.

Spending more money is not a cut. If Americans are serious about budget cuts they need to shrink the size of government, not assume that it will grow less than the real economy. Ryan failed miserably. He presented a plan that does nothing to reduce spending. As such, Republicans have given up the moral high ground and lost political points to Obama, who will continue to duck and wave but gain as he paints Republicans as trying to kill off grandma's Medicare support and give money to millionaires. From what I saw, Obama's disingenuous speech scored big among the independents and his base. That may be enough to win him another election and postpone the needed corrective action until it is far too late to mitigate the damage. I am assuming that he will score another point or two by changing his position on taxes. Rather than go after people who made more than $250K he will go after tax increases for people who make more than $1 million. That will leave Republicans caving on taxes or wind up being accused of defending millionaires even as they try to get the middle class to pay more.

My approach would have been different. I would have given American voters a real choice. Make serious cuts as proposed by Rand Paul's budget. Cut aid for billionaires by reducing subsidies for the agricultural sector, green energy companies, GM, AIG, C, the sugar industry, timber interests, oil, mining, and other sectors of the economy. Cut the military budget by pulling the troops back home. The US taxpayer should not pay to defend Germany, Japan, South Korea, or the Middle East. Cut federal programs on education, energy, housing, and all other activities not approved by the Constitution. Some issues are best settled at the local level. Ensure competition by permitting insurance to be sold across state lines. Stop the massive waste by reducing spending on defensive medicine by reforming the laws. Get rid of 90% of regulations and fire 90% of federal employees. End the drug war by decriminalizing possession and by allowing commercial sales of narcotics just as you do for alcohol and tobacco. End the monopoly on education by giving parents the right to choose the schools where their kids can go to. While states and counties will still run education pass a law that ensures that the funding is attached to the students, not the schools.

If voters choose to reject real cuts in spending and taking the country back to what it used to be it will be up to the people that they elect to come up with real solutions. We all know that cannot and will not happen because the left has no real solutions. It is time to stop dancing and prostituting principles and stand up as real leaders should.

 
At 4/19/2011 10:13 AM, Blogger Paul said...

Thanks, Hydra! I consider the source.

 
At 4/19/2011 10:30 AM, Blogger NormanB said...

If Krugman is even one-half as smart as he thinks he is why can't he fix the NYT?

And remember his answer when his Keynesian prescription didn't work: "We've got to spend even more." The guy is never wrong.

 
At 4/19/2011 1:08 PM, Blogger AIG said...

"Cut the military budget by pulling the troops back home. "

Way to go! You just saved about 50 billion dollars

" End the drug war by decriminalizing possession and by allowing commercial sales of narcotics just as you do for alcohol and tobacco"

Holy molly!! Thats a cool 5 billion you'll be saving right there!

This is why Lew Rockwell type clowns are more counterproductive to "libertarians" and fiscal conservatives, than helpful. Sprinkled in along with all the real significant and broad cuts, which can gain the approval and acceptance of the broadest base of people...they throw in some idiotic ideological tidbits about drugs and war. They make these completely insignificant and highly polarizing topics...their MAIN points, and eventually drive away any sane person from the table.

Just clowns are left.

 
At 4/19/2011 1:54 PM, Blogger Angela said...

I disagree. It's the crazy ideologues who are leaving the table in your scenario. Either you want a smaller government or you don't. As long as the GOP won't stop fighting unwinnable wars, and cowering from the Democrats never-ending demands for more and more entitlements, we're screwed.

 
At 4/19/2011 2:26 PM, Blogger Ron H. said...

AIG

"" End the drug war by decriminalizing possession and by allowing commercial sales of narcotics just as you do for alcohol and tobacco"

Holy molly!! Thats a cool 5 billion you'll be saving right there!
"

I'm not sure what your source is for that $5 billion figure, but you are likely off by an order of magnitude. The 2010 budget for the DEA alone was $15.5 Billion.

Here's an AP article on the subject. You can question the source, or the numbers, if you like, but I don't think you can wave it aside completely. It gives some idea of just how costly Nixon's "war on drugs" really is.

When the hundreds of thousands of lives lost over the years is also considered, one must really question the wisdom of continuing such a massive effort that appears to be missing its intended goals completely. By most estimates, drug use and availability in the US is as high as it ever was.

I realize this is a little preachy, but when considering wasteful programs to cut, this one should be right near the top.

 
At 4/19/2011 2:43 PM, Blogger Ron H. said...

Angela

"As long as the GOP won't stop fighting unwinnable wars, and cowering from the Democrats never-ending demands for more and more entitlements, we're screwed."

I'm not sure you can still characterize these "un-winnable wars" as GOP projects. For 2 years from Jan 2009 until Jan 2011 the Dems had control of the White House, and both houses of Congress. They had every opportunity to end them, if they had wished.

I'm not sure the GOP is "cowering" either, as they seem to have the same propensity to spend taxpayer money, just on different things.

There doesn't appear to be much difference between the two parties. That should be obvious when you consider the mind numbing size* of the $38 billion in "budget cuts", that aren't really cuts, exhaustively hammered out between the two parties.

*please note the sarcasm tag.

 
At 4/19/2011 3:07 PM, Blogger AIG said...

"I disagree. It's the crazy ideologues who are leaving the table in your scenario."

No. When adults come to the table to agree on cuts, they look at a pareto chart. There are obvious large drivers and contributors to the spending problem, and both sides on the table realize that entitlements, welfare, and bureaucratic entanglements are those main drivers.

A lot of different programs and issues fall under these, and more or less both sides are forced to agree that the focus should be here.

Now when children, like Ron Paul and friends, come to the table, they go straight for two completely wrong targets, which both polarize everyone on the table, and do absolutely nothing to address the problem; they go for the "drug war", and for "foreign military deployment".

This is chicken s**t. Durg war costs 15 billion (as you said, except that not all 15 billion goes directly to "drugs", so eliminating the "war on drugs" wouldn't really cut 15 billion from the budget. It would cut a lot less). Foreign military deployment are not only insignificant contributors to cost, but they are NOT for the defense of other countries (as Mr. Vangel keeps repeating, while it has been pointed to him on countless times that he is wrong), but are mainly logistical bases to facilitate US movements.

Basically, going after defense by addressing its TACTICAL and technological aspects, instead of its financial aspects, is both silly and counterproductive. Its silly because silly people like Ron Paul and Lew Rockwell shouldn't get to make tactical and technological decisions, and its counterproductive because all you are saying is, lets remove a capability or service without providing an alternative.

But of course, these people are ideological children who incessantly keep ignoring reality on military issues and keep repeating like a parrot the words of Lew Rockwell.

So while these issues should be low on the priority list, way low, they are instead made the MAIN talking points of ideological children at the table. And thats supposed to be a sign of seriousness...that the most pressing and important and the top 1 or 2 issue for "Libertarians" of the nut-job type, is "drugs"?

And I agree 100% that we ought to end the war on drugs and cut defense spending. Its just that these issues are not all that important right now.

 
At 4/19/2011 3:11 PM, Blogger AIG said...

"When the hundreds of thousands of lives lost over the years is also considered,"

Hundreds of thousands of what? Are you counting everyone who has died from overdoses and premature deaths from drugs? They would not have died if drugs were legal?

"I realize this is a little preachy, but when considering wasteful programs to cut, this one should be right near the top."

Not really. Its both tiny in actual savings, and its the hardest one to try and get through. So why waste time and get everyone in their trenches, over an issue only a bunch of hippies give a damn about?

 
At 4/19/2011 3:18 PM, Blogger AIG said...

"Either you want a smaller government or you don't. As long as the GOP won't stop fighting unwinnable wars, and cowering from the Democrats never-ending demands for more and more entitlements, we're screwed."

Agreed. But these are different issues. Once we agree that cuts need to be made, then we need to start looking at the biggest and easiest to address cuts...first. If you go for the most contested and least important cuts first, you're dooming the conversation from the start.

 
At 4/19/2011 11:08 PM, Blogger Ron H. said...

"Hundreds of thousands of what? Are you counting everyone who has died from overdoses and premature deaths from drugs? They would not have died if drugs were legal?"

No, I'm counting only to those killed directly in drug violence, including 28,000 in Mexico since 2006.

You are correct that of the $15.5 bn DEA budget, only $10 Bn goes directly to interdiction. This is already twice the lowball number you originally asserted, and is only the DEA budget itself.

Add to that the $20 bn spent in the last 40 years fighting gangs in their own countries, including $6 bn in Colombia alone, $450 bn to incarcerate drug offenders in federal prisons, $49 bn for law enforcement along US borders, And the amounts become nontrivial.

And, that's only some of the larger examples of federal spending on drug enforcement. There are also considerable state and local expenses to consider, although obviously not in a discussion of federal budget cuts.

"So why waste time and get everyone in their trenches, over an issue only a bunch of hippies give a damn about?"

You might be surprised.

Did you read the article at the link I provided?

If something is a waste of taxpayer money, and you and I may only disagree over the amount of that waste, then it seems worthwhile to discuss eliminating it.

To claim as you do that the amounts spent enforcing drug laws shouldn't be considered for elimination, because it involves a controversial subject, means that the primary consideration isn't cutting unnecessary spending, but whether or not someone might get upset.

By the way, I don't think cuts to military spending and the drug war are at the top of anybody's list, and I agree that they shouldn't be, despite what I said earlier. What I meant was that money spent on the drug war is a waste, as no reduction in drug use or traffic is evident, and the program is meeting none of its goals after 40 years. This should be easy to demonstrate, and the program eliminate.

Everything should be on the table for discussion. Any suggested cuts will be upsetting to someone.

"When adults come to the table to agree on cuts, they look at a pareto chart."

I don't believe politicians care about that, or even know what a pareto chart is. You have a higher opinion of them than I do.

"Foreign military deployment are not only insignificant contributors to cost, but they are NOT for the defense of other countries ... but are mainly logistical bases to facilitate US movements."

This is problematic. What US movements are you talking about, and why would the US need such movements facilitated if not in defense of other countries?

 
At 4/19/2011 11:43 PM, Blogger VangelV said...

Way to go! You just saved about 50 billion dollars

You can't count. The Iraq and Afghan wars have cost more than a trillion so far. The current cost for the Afghan war is around $9 billion a month. That is more than $100 billion saved each year.

 
At 4/20/2011 3:24 AM, Blogger Ron H. said...

This comment has been removed by the author.

 
At 4/20/2011 3:26 AM, Blogger Ron H. said...

This comment has been removed by the author.

 
At 4/20/2011 6:58 AM, Blogger VangelV said...

Add to that the $20 bn spent in the last 40 years fighting gangs in their own countries, including $6 bn in Colombia alone, $450 bn to incarcerate drug offenders in federal prisons, $49 bn for law enforcement along US borders, And the amounts become nontrivial.

I think that our friend will never accept the reality and will never look at the big picture. He is a right wing statist who argues for more and more government even as he claims to be a fiscal conservative. The simple fact is that taxpayers spend massive amounts of money to fund the government's war on drugs both directly and indirectly. The misallocated resources are taken from productive uses and go to create an environment in which drug lords, terrorists, and government workers thrive.

 
At 4/21/2011 12:28 AM, Blogger Hydra said...

And I agree 100% that we ought to end the war on drugs and cut defense spending. Its just that these issues are not all that important right now.

================================

Both of those policy choices have the effect of putting a price on lives.

If you believe that everyone has certain inalienable rights, then putting a higher price on one life than another is immoral.

TC = PC + EC + GC

If you minimize that, you equalize the effect of policy choices.

 
At 4/21/2011 12:30 AM, Blogger Hydra said...

"Either you want a smaller government or you don't"


==============================

I want he right size government, not too big and not too small.

Efficient would help, too.

 
At 4/21/2011 7:25 AM, Blogger VangelV said...

I want he right size government, not too big and not too small.

Many would argue that the right size for the federal government is about 10% of the current size. And they would still be considered statists among many circles. Where does that put you?

 

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