The “Which President’s Debt” Question Again!

From Twitter, I found this article by Cato senior fellow and Johns Hopkins econ professor Steve Hanke. Hanke conlcudes that since 1980, Bill Clinton has been the president who cut spending the most.  Now, this is fairly familiar territory for me, and the piece caught my eye because of this chart:

Massive Infrastructure Spending is a Win-Win-Win-Win-Win (redux)

This was right when I wrote it a year and a half ago, and it’s still good.

In Pennsylvania, it would take 15 years for the state to pay for current bridge repair needs, $600 per year.  But if the federal government was the intermediary, selling Treasuries to fund all $8.7 billion of work in the next few years, all the work would be done in the near-term, employing tens of thousands of workers idled by the private sector.  Paying off the debt could be accomplished by a combination of taxes collected on the construction projects, reduced unemployment benefits, and Pennsylvania’s annual bridge budget, which would pay off the debt in 15 years or less.

Here’s what’s changed since I wrote this:

Jeffrey Sachs Joins Team Scarborough (and Team Deception)

Okay, there’s lots here, but I have to start somewhere.

Joe Scarborough’s been tilting against Paul Krugman, despite basically arguing the same things, for months now. Plainly Scarborough knows that conflict sells, so he blatantly and continually misrepresents what Krugman said on his show. But this short post isn’t about that. It’s about the obviously misleading critiques of the 2009 stimulus.

Krugman v. Scarborough – The Missing Piece

Princeton economist Paul Krugman was on MSNBC’s “Morning Joe” for about 20 minutes on Monday, talking macro stuff. Later that day, host and former GOP congressman Joe Scarborough published this post mortem: Paul Krugman vs. The World.  If you listen to the Krugman segment and then read Scarborough’s treatment of it, you’ll find that Joe consistently misrepresented what Krugman said. But I’m not going to go point-by-point on this. I just want to highlight the key point in Krugman’s argument that everybody else on the panel missed.

When pols talk about entitlement reform, they’re talking largely about Social Security and Medicare.  And nobody, on either side, is willing to cut benefits that go to today’s seniors.  The result of this political cowardice is that we’re not talking about cutting any spending today. We’re talking about making cuts to future benefits, to the spending of these programs 10+ years out.

Obama Would Just Disregard Debt Ceiling

UPDATE: My ideas on the debt ceiling and the trillion dollar coin are similar to those in earlier articles by Neil H. Buchanan and Michael C. Dorf and Eric Posner. Read them too.

Okay, following up on what I wrote here about the Trillion Dollar Coin, some thoughts about how I see the debt ceiling fight going.

First, recall that I have faith that the Obama administration wouldn’t have given up on not just the Coin, but also the 14th Amendment gambit, without having a better idea in play.  If the administration thinks a debt ceiling-induced spending freeze would significantly damage the economy (I think they do), and if it thinks there’s any likelihood that the Republicans actually would fail to raise the debt ceiling (I also think they do), not having a way out would be extremely irresponsible. Which, call me fool, I don’t think the Obama administration is.

The only way Obama specifically removes two promising options is because they already have a better path. Which I think is to disregard the debt ceiling law.

Here’s how it goes down.

Why Did Obama Nix The Trillion Dollar Coin?

Today the White House shot down one of the more interesting ideas of recent years, the trillion dollar coin. In case you missed it, this idea’s been floating around for more than two years as a way to deal with the debt ceiling. Using an obscure provision of the law intended to allow low-denomination collectible coins, Treasury would mint a single coin worth a trillion dollars (for example), deposit it at the Federal Reserve, and meet obligations with the newly created money.

Gas Tax Sanity: Just Index For Inflation

Virginia Governor Bob McDonnell has proposed to eliminate the state’s gas tax and replace it with an increase of 0.8% in the sales tax and other fees including $100 on alternate fuel vehicles. The idea has been roundly lambasted, most importantly economists who study transportation taxation. The most obvious reason this is a bad idea is that it unties road building and maintenance costs from those necessitating them; taxing fuel comes about as close as we can in taxation to directly charging the users of a government service for its cost.

McDonnell would be proud to be the first state to eliminate a gas tax, boosting his bona fides in the Republican party.  But he should be just as proud to be at the vanguard of a logical, economically sound change that is long overdue in states across the country: indexing gas taxes for inflation. This means that as the general price level increases, including the costs involved in road building and maintenance, so does the tax rate.

When Did Romney Really Leave Bain? And Who Cares?

The best explanation for the timeline of Mitt Romney’s separation from Bain Capital comes from Salon’s Steve Kornacki and goes like this:

• In 1999, Romney was asked to take the helm of the struggling Salt Lake City Olympics, and very quickly (within a week or two) agreed and left Bain.  This was a leave of absence, similar to ones he had taken in 1991-2 (to temporarily run Bain and Company, which was in financial trouble) and in 1993-4 (to run for U.S. Senate against Ted Kennedy).
• When (or as) the Olympics job was finishing up, Romney saw an opportunity to run for governor of Massachusetts; then acting Governor Jane Swift (R) was enormously unpopular and chose not to run for re-election.
• During 2001 and 2002, Romney was paid a salary by Bain of at least $100K.
• Either during or after the campaign, Romney finalized his departure from Bain.  After his term as governor, Romney would be 59, and clearly had eyes on a run for President.

How do I know that Romney’s departure became “real” around 2001 rather than around 1999? Well, I don’t.  But it makes more sense.

Tim Kaine Thinks Making $250,000 In Northern Virginia Is Struggling?

This has been bugging me for a while, but the latest impetus was a discussion about Tim Kaine diverging from President Obama over the income level where the Bush tax cuts should be allowed to expire. Obama says $250,000, Kaine says $500,000, apparently because $250,000 just isn’t that much income in northern Virginia, a key battleground in his Senate race against George Allen.

“Remember that $250,000, while it may be worth a lot to some folks,” explained National Journal Hotline editor-in-chief Reid Wilson, “to those voters say in the northern Virginia suburbs, it’s not that much money.”

Channeling Sherman T. Potter: “Horse hockey!”

The Obama-Romney job performance comparisons are dumb. But if you insist…

Any comparison of job creation between Obama as President and Romney as governor (or venture capitalist) is worthless.  The nation is not like a state or a firm. But the Romney folks keep harping on it, because they see the persistently high national unemployment rate as a liability for the President.  Their argument, over and over again, is based on unemployment being lower in Massachusetts in the mid-2000s than it is nationally today.

Which is, of course, enormously stupid.  The best way to assess Romney’s job creation prowess (which I must stress again, I find to be an absurd campaign issue) is to compare Massachusetts against the rest of the nation during Romney’s term of influence.

Well, Romney folks, you might want to be careful on this one.