The Charles Munch 1959 recording of the Berlioz Requiem has been reissued in SACD hybrid form. Finally we can answer whether all the fuzziness of the original LP's owed to the limitations of diamond stylus on vinyl, or whether the microphones of the time were taxed beyond their limits by the huge chorus, orchestra, extended percussion, and augmented brass of this massive and glorious piece of music.
And the answer is: the microphones were okay indeed. Everything now sounds open, sweet, unstrained, and beautifully undistorted.
"Taken as a whole, Antarctica is so cold that our present efforts to raise its temperature might be regarded as fairly puny. Change is undoubtedly occurring: in the collapse of the northerly Peninsula ice shelves, and elsewhere in the West Antarctic Ice Sheet, where the circumpolar current appears to reached the ice edge and is eating away drastically at the ice shelves. One cannot be certain, because packets of heat in the atmosphere do not come conveniently labelled 'the contribution of anthropogenic warming'.
"But the warming of the Peninsula has been going on for a considerable time, and the pattern of regional change is variable, and neither of these is favorable to the notion we are seeing the results of global warming".
At the US station at the South Pole, temperatures have in fact fallen by a degree since 1957. "The Antarctic Peninsula is exceptional because it juts out so far north," Wingham explained.
The professor continued: "I am not denying global warming. For instance, Greenland, in the northern hemisphere, does seem to be going. But Greenland's ice cap - Greeland is quite far south - is a last survivor from the ice age and only its height protects it. The more that cap melts, the more it will continue to melt as it gets lower and warmer. But Antarctica is different. Even in the Arctic I am sceptical of some claims that 40 per cent of the sea ice has already vanished, and that what remains is drastically thinning.
One reason that the dollar can fall sharply on news like Korea's announcement, even when analysts said immediately that it had been misinterpreted, is that currency traders and speculators thrive on market volatility. In addition, many traders have sell or buy orders already set up at certain dollar levels to protect their profits or reduce their losses. When these levels are passed, a dollar move can accelerate, as it did on Tuesday.
But of course it is found at the end, not the beginning. Everything in front of this paragraph is innuendo, suggesting (but never really coming right out with it) Tuesday's price shift indicated weakness in the US economy.
As I read this I imagined a hearing being disrupted by chanting:
Privatizers are even having a hard time pretending that they want to strengthen Social Security, not dismantle it. At one of Senator Rick Santorum's recent town-hall meetings promoting privatization, college Republicans began chanting, "Hey hey, ho ho, Social Security's got to go."
President Bush, who has pledged to reform the U.S. tax code in his second term, today praised the flat tax implemented by Prime Minister Mikulas Dzurinda of the Slovak Republic. During their meeting in Bratislava, Bush, without prompting, made a point of touting the flat tax:
"I complimented the Prime Minister on putting policies in place that have helped this economy grow. The most important responsibility we have at home is to make sure our people can find work. And the president put a flat tax in place; he simplified his tax code, which has helped to attract capital and create economic vitality and growth. I really congratulate you and your government for making wise decisions."
Has any non-Anglo European politician said anything during the past decade -- on any subject -- that captures the imagination half so well as Walid Jumblatt's "Berlin Wall" statement?
This is like living in the Age of Heroes. Doing one thing or another can make genuine historical changes for thousands -- for the Good, or for the Bad. Or at least this is how it feels to those with "neocon historical imagination."
So, to all my friends on the Left, those who celebrate Europe and its lifestyle: Where are your Heroes? What are your Values? What captures your imagination the way Global Democratic Revolution captures mine?
Am I supposed to get excited about vacations? Paid maternity leave? Job seniority? Stuff like that?
Or is there something else? Please, tell me, and I will eagerly try it!
Aside from self-pity and anger, what drug can you possibly offer me that's more exciting than Democracy?
UPDATE: A reader responds: "How about world empire and domination?"
EconoPundit answers: "Funny how the socialists always think that's what capitalism is about. Actually, even Marx recognized capitalism's basis was freedom of purchase and sale."
Reader's response to EconoPundit's response: "You don't have to be a socialist to wonder about the likes of Perle and Wolfowitz -- I'm certainly not a socialist -- And I am four-square for democracy after having grown up in Latin American police states. But if you listen to what the neocons are saying, don't you even wonder a little if that isn't their goal? There is more to their agenda than "freedom of'purchase and sale" (which I am entirely in favor of and run around promoting in foreign countries as an economist). When we are supporting countries like Egypt and Saudi Arabia you have to wonder at what point spreading democracy is trumped by geopolitical concerns (or imperial ones if you want to sound like a paranoid socialist)?"
EconoPundit's response to Reader's response to EconoPundit's response: Yes, America supports dictators. This seems an all-purpose response to virtually any policy question. ("The Bush Administration favors lowering farm subsidies...Yes, but America supports dictators!" The Bush Administration has changed lettering on doors to the mens' washrooms. Yes, but America supports dictators!")
Maybe it's just ethnic prejudice, but Perle and Wolfowitz just don't look as evil to me as some see them. I kind of suspect they represent movement away from support of Egypt, Saudi Arabia, and their ilk. (I just knew if I kept up EconoPundit long enough I'd sooner or later find a choice opportunity to use that word "ilk"!)
Doesn't Tom Friedman know this same editorial has been written hundreds of times since 1985? By lots of people? Including Paul Krugman?
O well, here we go again:
Ever talk to someone who trades currencies? "Orderly" is not always in the playbook. I make no predictions, but this could start to get very "disorderly." As a former Clinton Commerce Department official, David Rothkopf, notes, despite all the talk about Social Security, many Americans are not really depending on it alone for their retirement. What many Americans are counting on is having their homes retain and increase their value. And what's been fueling the home-building boom and bubble has been low interest rates for a long time. If you see a continuing slide of the dollar - some analysts believe it needs to fall another 20 percent before it stabilizes - you could see a substantial, and painful, rise in interest rates.
"Given the number of people who have refinanced their homes with floating-rate mortgages, the falling dollar is a kind of sword of Damocles, getting closer and closer to their heads," Mr. Rothkopf said. "And with any kind of sudden market disruption - caused by anything from a terror attack to signs that a big country has gotten queasy about buying dollars - the bubble could burst in a very unpleasant way."
Hmmmm, "a kind of sword of Damocles..." Sounds somehow familiar...
UPDATE: Don't want to sound too professional here, but Friedman and the NYT folks don't know enought economics to know when and whether the tail is wagging the dog. For example:
Why is that sword getting closer? Because global markets are realizing that we have two major vulnerabilities that this administration doesn't want to address: We are importing too much oil, so the dollar's strength is being sapped as oil prices continue to rise.
Well, ignoring for a moment the question of expanded domestic supply (you know, Alaska, stuff like that) consider the counter possibility: aren't those oil price increases being "sapped" by the dollar rather than the other way around?
And we are importing too much capital, because we are saving too little and spending too much, as both a society and a government.
Sorry Tom, but this can work exactly the other way around. A current account deficit can just as easily be created by a capital account surplus. In other words: we may be buying "too much" from the rest of the world simply because they are too eager to send their savings here for safekeeping. (Scroll to bottom of this post for more info.)
UPDATE: For anyone still harbouring doubts, via Sandy Pederson and Inside Iberian Notes there's this. Read the whole thing, and as as you do pay special attention to passages like the following:
But even if such a sharp break occurs -- which is less likely than a gradual adjustment of exchange rates and interest rates -- market-based adjustments will mitigate the consequences. Responding to a relative price decline in U.S. assets and likely Federal Reserve action to raise interest rates, U.S. investors (arguably accompanied by bargain-hunting foreign investors) would repatriate some of their $4 trillion in foreign holdings in order to buy (now undervalued) assets, tempering the price decline for domestic stocks and bonds. A significant repatriation of funds would thus slow the pace of the dollar decline and the rise in rates. The ensuing recession, combined with the cheaper dollar, would eventually combine to improve the trade balance. Although the period of global rebalancing would be painful for U.S. consumers and workers, it would be even harder on the European and Japanese economies, with their propensity for deflation and stagnation. Such a transitory adjustment would be unpleasant, but it would not undermine the economic foundations of U.S. hegemony.
Levey and Brown understand (as Friedman clearly does not) how markets work. In addition, they sense the importance of the mildness of the last recession -- following as it did (as Friedman may simply not remember or deem important) closely on the heels of 9/11 and the tech stock crash.
Polipundit finds less worry about indoctrination of the sixth grade letter-writers than about their basic lack of education regarding the role of the military in US society:
The kids that wrote anti-war stuff to the soldier could have been parroting their parents’ or even Michael Moore’s statements. They would not have, however, included those statements in a letter to a soldier, though, unless they had no understanding of that soldiers' role. Someone commenting on this post mentioned that their child was taught two things about WWII -- internment and the horror of the atom bomb. That reminded me of Betsy Newmark's brilliant (as usual) post last year about the way military history has been replaced by social history in the schools. It is no wonder that so many people were declaring Afghanistan a disaster and a hopeless quagmire when we had not taken over the country in the first few days. Too many of the highly educated are just completely ignorant about these matters because it was never included in their curriculum.
Actually, all the Krugmanesque wigging notwithstanding (think about that -- isn't it pathetic NYT unsigned editorials are beginning to read, stylistically, like Paul Krugman?) the writers seem to "get it":
The idea of making the private accounts part of one's estate is particularly appealing to low- and middle-income earners, who may not have all that much to leave to their heirs under normal circumstances. But those are exactly the people who would have to use the largest share of their accounts to buy annuities. The government would require that annuities be large enough to keep recipients above the poverty line for life. The less you had to start with, the less you'd have left over after buying the mandatory annuity.
What if you died before you retired? As with many claims Mr. Bush makes about Social Security privatization, the fate of your private account in the event of your untimely death is unclear. But one issue that raises big doubts about whether that money could be inherited is the question of how the trillions of dollars the government would have to borrow to set up a privatized system would be repaid.
The devil is always in the details. However, EconoPundit is happy to see the NYT finally acknowledging the importance of intergenerational wealth accumulation and retention as part of any healthy system of public social insurance.
Talented economists speak out while others only cough...
Cough slighly improved, fever still at 100 or so.
David Malpass sends the following thoughts:
Financial markets took a hard hit on February 22.
The dollar and equities weakened sharply, while gold, oil and commodities rose. The CRB commodity index jumped to its highest level since 1981. The Bank of Korea said it would diversify its international reserves away from dollars.
We think this is a jittery reaction to low interest rates and the growing inflation problem. The Fed's testimony last week didn't quell these concerns, while the February 18 PPI data added to them.
CPI data comes out on February 23. Whatever the outcome, inflation-related uncertainty will likely persist:
If core inflation is above the 0.2% monthly consensus, it will raise concerns about inflation, Fed rate hikes, and a slower economy.
If inflation is at or below the consensus, it will raise concerns that the Fed won't hike enough to deal with inflation.
Why the Jitters?
Inflation is the key variable in the 2005 outlook. Though always hard to predict, the uncertainty is more now because of the unique circumstances -- the late 1990s dollar strength, the deflation, the 1% interest rate, the massive dollar weakness since 2001, the tolerance of the U.S. government for dollar instability (and therefore price instability).
The Fed is following a self-described "accommodative" monetary policy after three years of fast economic growth, adding to the inherent uncertainty in predicting inflation after a deflation.
Further, the Fed says that inflation is well contained after rising substantially in 2004. In testimony last week, Fed Chairman Greenspan said: "All told, the economy seems to have entered 2005 expanding at a reasonably good pace, with inflation and inflation expectations well anchored. On the whole, financial markets appear to share this view."
It's tough to measure inflation expectations. We don't think TIPS inflation-indexed bonds or the level of bond yields are useful indicators of inflation expectations since both are heavily influenced by current liquidity conditions.
We think we will have a moderate-sized inflation problem due to dollar weakness in 2004, with year-over-year core CPI rising above 3% in 2005.
Will It End Badly?
The inflation-related uncertainty subtracts some from growth and equities, but we don't see the inflation bulge ending badly unless the U.S. allows a weak-dollar trend.
Better for growth and equities would be for the Fed to reduce the uncertainty about the dollar's future value and therefore the inflation outlook.
More likely is that the inflation-related uncertainty continues for a while. If inflation rises or growth data is strong, the Fed would become more hawkish. We think the economy would take faster rate hikes in stride as it did in 2004.
The result is a continued expansion, but with jitters due to low interest rates, dollar instability, and inflation-related uncertainty.
EconoPundit's flu-wracked two cents: at long last dollar hawks have the rudements of an argument!
In a related note: I checked the data yesterday and they say there's absolutely no doubt Americans prefer buying their own home or condo instead of playing it safe and renting. To me this suggests we'll all laugh about this in years to come, and wonder how can anyone ever have doubted people prefer private accounts?
UPDATE: Reader Joe Blalock says I'm missing quite a bit here:
I like your Blog but I was surprised you let the link to "New Editor" slip by. They make a completely backward analysis of the payoff from Social Security. People who are making $1,000/mo now were not paying in $5,000/yr on a $44,000 salary. They might have been paying in less than $1,000/yr on a $15,000 salary.
My grandfather, an educated man who has long since passed, thought social security was miraculous because he had paid in, say, $5/mo back in the 30s-50's and he was getting many hundreds of dollars a month years later.
The appaling thing about social security is not the low benefit it pays given the money it takes in. Historically, it has paid an internal rate of return (IRR) on the participant's invested money that is wildly in excess of what that same amount of money would earn in any kind of private pension account. The scandal is that these returns are based on a Ponzi scheme: people who paid in very little get a great return because "new [investors']" money is given to them. Like any Ponzi scheme this requires more and more new investors paying in higher amounts of money, and our capacity to do that is coming to an end.
P.S. New Editor arrives at $5,000 social security tax on a $44,000 salary at 12.4%. In reality, the half of the 12.4% that one's employer pays is on top of your salary. The employer-paid $2700 or so of SocSec tax actually grosses up [your] salary [implicitly], so [you're] really paying $5,000 of payroll tax on the equivalent of $46,700 -- though it would be nice if your employer would simply give you the money, not the government. Forgive the math, but those of us who want to challenge the SocSec aplogists should be wary of Krugmanesque sloppiness in our arguements.
EconoPundit's two cents: Social Security as presently constituted involves not only the Ponzi Principle, but also the Tontine Template. I was happy to hear Greenspan emphasize the survivors' benefits/family savings aspect of the issue.
1. Crispy duck in mandarin pancakes with hoisin, scallions, and cucumber 2. Egg drop soup 3. Scallops, mushrooms, and sweet peppers in lobster sauce (hot pepper oil on the side for those who wish to dip) 4. Stir fried chicken with basil (Taiwan style) 5. Tenderloin and garlic stir fried with vegetables in oyster sauce (as in Chicago's old Rice Bowl restaurant -- inappropriately called on their menu "Hong Sue Gnow")
This was to be tomorrow night's menu -- a modest banquet to celebrate my wife's dad's visit. I was to go shopping this morning for everything but the ducks and chicken.
But instead I'm reclining here on the couch, blogging, feeling kinda wretched with a mild fever of 100.4.
UPDATE: In case you're wondering, the duck is partially pre-made. I buy those barbequed ducks hanging by their necks in the windown in Chinatown, and crisp them up in the over prior to serving them. I have always felt making your own barbequed duck is like making ketchup at home. You can do it, but why bother?
My abduction experience was triggered by sleep deprivation and physical exhaustion. I had just ridden a bicycle 83 straight hours and 1,259 miles in the opening days of the 3,100-mile nonstop transcontinental Race Across America. I was sleepily weaving down the road when my support motor home flashed its high beams and pulled alongside, and my crew entreated me to take a sleep break. At that moment a distant memory of the 1960s television series The Invaders was inculcated into my waking dream. In the series, alien beings were taking over the earth by replicating actual people but, inexplicably, retained a stiff little finger. Suddenly the members of my support team were transmogrified into aliens. I stared intensely at their fingers and grilled them on both technical and personal matters...[A]t the time the experience was real, and that's the point. The human capacity for self-delusion is boundless, and the effects of belief are overpowering...
Yeah. My 101 students really like economics.
Via Milt Rosenberg (who really sort of likes me, I think).
Want to bring your progressive friends' after-dinner conversation to a grinding halt? Just mention two words: "Lynne Stewart."
Frankly, I'm shocked. It took a good deal of heated exchange before I could get a good buddy to just stipulate that if some hypothetical lawyer somewhere does carry messages from client to terrorist, that's, well, you know, bad?
Yes he reluctantly agreed, that would be breaking the law -- but it is definitely not what Lynne Stewart did. Instead, prosecutors are breaking the law, the jury is dumb, and so on.
There's lots of bad stuff going on in the US all the time. Isn't there a single injustice somewhere my friend could have taken more interest in? How is it he's such a passionate advocate for the one single case least likely to win over converts? I simply don't understand.
Japan is struggling to find ways to meet its obligations. A report this month by the Ministry of Economy, Trade and Industry showed that 11 of 30 top Japanese industries -- steel and power among them -- risked failing to reach targets unless they take drastic steps.
Slowly, as it becomes clear just how costly the whole mess is, everyone miraculously starts seeing just how weak was the intellectual case for the treaty.
I chaired a guest lecture last night at Roosevelt. At one point I asked our speaker -- the one and only and very intrepid Ronald Coase -- whether he'd like to weigh in on Social Security reform.
Repeat four times: "Gotta read the whole thing before you write anything..."
I received a heads up on this review three days ago, but with some chagrin I realized my good friend and correspondent probably hadn't read the whole thing. True, part one scans as typical Eurosneer:
To a growing number of Europeans, however, it is America that is in trouble and the "American way of life" that cannot be sustained. The American pursuit of wealth, size, and abundance -- as material surrogates for happiness -- is aesthetically unpleasing and ecologically catastrophic. The American economy is built on sand (or, more precisely, other people's money). For many Americans the promise of a better future is a fading hope. Contemporary mass culture in the US is squalid and meretricious. No wonder so many Americans turn to the church for solace.
But it turns out this is reportage, not what Judt agrees with personally:
Europe is facing real problems. But they are not the ones that American free-market critics recount with such grim glee. Yes, the European Commission periodically makes an ass of itself, aspiring to regulate the size of condoms and the curvature of cucumbers. The much-vaunted Stability Pact to constrain national expenditure and debt has broken down in acrimony, though with no discernible damage to the euro it was designed to protect. And pensions and other social provisions will be seriously underfunded in decades to come unless Europeans have more children, welcome more immigrants, work a few more years before retiring, take somewhat less generous unemployment compensation, and make it easier for businesses to employ young people. But these are not deep structural failings of the European way of life: they are difficult policy choices with political consequences. None of them implies the dismantling of the welfare state...
Europe's true dilemmas lie elsewhere. In the Netherlands, in Paris and Antwerp and other cities, antagonism and incomprehension between the indigenous local population and a fast-growing minority of Muslims (one million in the Netherlands, over five million in France, perhaps 13 million in the EU to date) has already moved on from graffiti and no-go zones to arson, assaults, and assassinations. Turks, Moroccans, Tunisians, Algerians, and others have been arriving in Western Europe since the 1960s. We are now seeing the emergence of a third generation: in large part unemployed, angry, alienated, and increasingly open to the communitarian appeal of radical Islam....
All this has been dealt with many times before. This is the best place to start for a general review of the subject -- with many links.
UPDATE: Actually the paper is about lots more than Smith alone. For example:
Robert Owen, a successful British factory owner, in a challenge to Smith, averred that unrestrained laissez-faire by its nature would lead to poverty and disease. He led a school of so-called Utopian Socialists who advocated, in Owen's phrase, "villages of cooperation." In 1826, he set up such a community in the United States, which he named New Harmony. Ironically, communal strife brought the New Harmony experiment to collapse within two years. Many saw the initiative as opposed to the laws of human nature, a component of natural law.
In the past week, I've received several e-mail notes from Democrats about the Iraq elections, or heard comments from various Democratic lawmakers -- always along the following lines: "Remember, Vietnam also had an election, and you recall how that ended." Or, "O.K., the election was nice, but none of it was worth $100 billion or 10,000 killed and wounded." Or, "You know, we've actually created more terrorists in Iraq -- election or not."
I think there is much to criticize about how the war in Iraq has been conducted, and the outcome is still uncertain. But...
This serves as nice counterpoint to Matthew Lynn's yet-another-article warning the world may dump the dollar and move on to that oh-more-nuanced Euro.
UPDATE: And I have a question about all this. Roughly 25% of the US landmass still remains in the public domain. That's a huge chunk of real estate serving, for example, as basic collateral backing any international loan.
I know lots of Europe is socialized, but what percent of the basic European landmass remains in the public domain?
UPDATE II: Still no answers to the above question, but Dave Schuler (The Glittering Eye) adds this:
[The] Chinese know as well (or better) than we do that the Europeans do not have free trade in their hearts. For that reason the EU is just not a good candidate for closest trading partner for the Chinese. So why [would they ever] adopt the Euro and deal a severe injury to us?
UPDATE III: Then there's this, from Sandy Peterson via the Bros. Judd:
There are, in fact, very serious problems in the Chinese economy. The most important problem is its bad debts, which even the Chinese officially admit to being about $150 billion and which is probably much higher. This in turn reflects the fact that capital is not allocated on a market basis in China, but rather politically, based on who you are and whom you know. China is filled with enterprises, state-owned and otherwise, that loses money but are kept afloat by bank credit.
That credit is not nearly as available as before because of the weakness of the Chinese banks. As credit tightens, business failures will increase. Right now, China is surging exports overseas to keep the cash coming in, but it isn't clear that the country is making money off those exports. It's running fast to stay in the same place. A 9 percent growth rate doesn't mean anything until you find out whether the country is making money off that growth rate. I can grow anything quickly if I sell at or below cost. China is not the first Asian economy to be in this condition. Japan went down to the same disease in the early 1990s, and East and Southeast Asia went down in 1997.
China is late to the game and late to the disease. It is interesting that Japan and East Asia had the same disease. They all had mountainous bad debts and a banking system that was nearly crippled, massive exports that were not particularly profitable and capital flight, where Japanese, for example, bought everything and anything so long as it wasn't in Japan.
Interestingly, the media gushed over Japan in 1990 and Asia in 1997 the same way they are gushing over China now. They misinterpreted cheap export surges as healthy and the flight of capital out of these countries as a sign of strength. The same thing is happening with China. And like Japan and Taiwan, China has huge dollar reserves — yet which are not used to fix the unfixable financial system.
Between the dogma that China is a sure thing, people trying to invest in China who have no business investing in China, and a complete indifference to any facts that indicate the contrary, China looks as toppy as NASDAQ did in 2000.
David Malpass, while somewhat underwhelmed by the budget, still remains impressed with recent economic growth:
We note a rapid increase in federal revenues in recent months, a positive response to economic growth. Data through December showed that 12-month revenue growth exceeded 12-month outlay growth. We expect this spread (growth in revenues above outlays) to expand in 2005, causing the budget deficit to narrow some as a percent of GDP. From a financial stability standpoint, the U.S. deficit/GDP and debt/GDP ratios are within historical norms and are lower than most industrialized countries.
In China:
Advocates of "modular" pebble bed reactors argue they offer the hope of cheap, safe and easily expandable nuclear power stations a potent appeal for China, which is struggling to meet huge growth in energy demand while avoiding environmental disaster.
Pebble bed reactors are small, which suits remote and rural areas and makes them easy to expand.
The reactor's supporters also argue that the technology is secure from proliferation. The low-enriched uranium fuel consists of half-millimetre-sized particles of uranium dioxide encased in graphite and silicon carbide, which in turn is encased in a graphite ball. Experts say it is expensive and difficult to process such spent fuel. Plans for a rival pilot plant near Cape Town, developed by Eskom, the South African power utility, US-based Exelon and British Nuclear Fuels, have been stalled by environmental challenges.
...if there were such a thing as a good tax, the VAT would be it. An enticing feature of the VAT is that it's rebated on exports and applies to the full price of imports, so foreigners pay for part of it. Currently, every time an American firm exports to Europe, in effect it pays the tax, whereas European firms that export to the U.S. do not. This mechanism arguably gives countries with a VAT a competitive advantage over those without one, such as the U.S., which is now the only major country on earth without such a tax.
Enacting a VAT would also help address the nation's competitiveness problem if it is used to offset some or all of the corporate income tax, which cannot be rebated on exports under world trade law. Even after those offsets, a 10% VAT -- half the rate prevalent in Europe -- would still leave money to fix the AMT and other glaring tax problems, thus fulfilling the President's promise to reform and simplify the tax code.
Past efforts to enact a VAT have failed mainly because it's regressive, that is, it takes more from the poor than the wealthy in percentage terms. But rebating some of the tax into the personal accounts of poor people could redress this problem. It could work something like the existing earned income tax credit, which was created to offset the payroll tax burden of workers with no income-tax liability.
President Bush plans to unveil a $2.5 trillion budget today eliminating dozens of politically sensitive domestic programs, including funding for education, environmental protection and business development, while proposing significant increases for the military and international spending, according to White House documents.
Overall, discretionary spending other than defense and homeland security would fall by nearly 1 percent, the first time in many years that funding for the major part of the budget controlled by Congress would actually go down in real terms, according to officials with access to the budget. The cuts are scattered across a wide swath of the government, affecting a cross-section of constituents, from migrant workers to train passengers to local police departments, according to officials who read portions of the documents to The Washington Post.
About 150 programs in all would be shuttered or radically cut back to help meet Bush's goal of shaving the budget deficit in half by 2009. One out of every three of the targeted programs concerns education. Medicaid funding would be reduced significantly and even major military weapons programs would be scrapped to make more resources available for the war in Iraq.
The spending blueprint for fiscal 2006 and beyond promises to touch off a wrenching debate about national priorities in the months ahead.
If this is accurate, it is significant for several reasons. First, it reestablishes the principle the public sector isn't there to simply grow beyond limits. Second and more important, it apparently exerts discipline on public sector growth similarly to a method that works well in the private sector: diffuse the cutback pain as widely as possible, and force everyone to figure out how to make the new budget work!
No, actually [we're not talking about reductions.] The proposal...calls for increased spending of $90 billion overall and $18 billion more in discretionary spending. That 1% WaPo speaks about is only in non-security discretionary spending and only represents a cut of $3 billion.
Though he cites Kaus only in a related context, David Brooks is in effect arguing here Mickey Kaus' 1992 desideratum -- "civic democracy" -- has been actuated by structural changes in the Republican and Democratic Parties.
Specifically: it is growing in the Republican Party, and declining in the other.
UPDATE: But I wonder, are there really more local chapters of the NRA than of the Sierra Club? How is it the former qualifies as one of Brooks' "fellowship associations" while the latter doesn't?
UPDATE II: Here's Theda Skocpol's "The Narrowing of Civic Life" -- apparently this is a chapter in Civic Engagement in American Democracy (Brookings Institution).
Indeed, my first-update question is easily answered by Skocpol. Sierra Club's membership is basically an elite, composed (for example) of 80% college graduates. And the NRA? Presumably, less so.
The question, in other words, isn't how many local chapters, but, rather, whether the organization sucessfully "mixes" those at different socioeconomic levels.
Be the first kid on your block to read these important new documents...
Via Bruce Bartlett, a new White House Document on Social Security Reform. And, also from Bartlett, an EconoPundit exclusive (unless someone else is up econoblogging this early) -- a new paper from the Council of Economic Advisors (as of this hour available nowhere on the internet but right here at EconoPundit) that reads, in part:
Will Social Security be "bankrupt" by 2042?
Yes. Bankrupt means "having insufficient assets to cover ones debts," which applies to Social Security in 2042, according to the Social Security Trustees most recent report.
Beginning in 2042, the Social Security Trust Fund will be exhausted. At that point, the resources available to the system (payroll taxes plus some income taxes on Social Security benefits), will be insufficient to cover the liabilities of the system (benefits scheduled for retirees, people with disabilities, and other beneficiaries). If nothing is done to correct this problem, benefit payments would have to be reduced by roughly 27 percent.
UPDATE: See also today's Kristoff in the NYT. He proposes this generous compromise: liberals will agree to move back to what they were loudly yelling when Bill Clinton was smugly talking about a Social Security crisis, and in exchange, conservatives will agree to give up the Bush tax cut.
Steve Conover, the Skeptical Optimist, has been assembling numbers and graphics on the national debt:
The facts say that our National Debt burden, contrary to popular hysteria, is a ho-hum situation: no big deal compared to other countries today, and no big deal compared to where we've been in the past. The facts say that the USA's debt burden is lower than that of Japan, Canada, and France; on par with Germany's; and higher than the debt burden in the UK, Russia, Iran, and Botswana.
Do those facts surprise you, compared to (a) what we always hear from politicians and ideologues on the subject of deficits and debt, or (b) the emotional hysteria on the web about ticking debt clocks and grandchildren-eating debt monsters? Sorry if it startles anyone, but facts can be stubborn things.
Read it all. He includes, free of charge, an airtight method whereby you can equate the amount of your money going to pay interest on the national debt to (are you ready for this?) zero!
UPDATE: Here's Steve's copyrighted illustration of debt burden (rather than what he calls the national debt's "interest burden" -- percent of GDP going to pay interest on public debt) -- I especially like its spiffy and useful international comparative summary:
Where else in the world would a news agency so casually -- just ordinary, everyday stuff, apparently -- throw in a little detail that it is one nation's official policy that one of its neighboring states be destroyed?
But forget all those feelings of offense. Just ask yourself: couldn't Iran make a massive contribution toward Middle East Peace just by declaring its demand for Israel's destruction is now merely unofficial?
UPDATE: Hasn't anyone suggested continued UN membership depend on each nation's official stipulation that all other members states have a right to exist? What good can an international organization possibly be if this basic stipulation isn't required of all its member states?
I suppose I could brag about having a basic, boneheaded attitude towards all of this. The public sector can only tax and redistribute. It can't produce. Therefore unlike the private sector it can't generate any interest or profit revenue.
So if the rate of return on Social Security exceeds the rate of return on private investment, doesn't this necessarily mean it is being financed not only by interest on our collective "estate," but also through the reduction of what might be called our collective "capital?" Isn't this just like reducing the size of an estate by spending more than the interest generated per month, in other words?
