How Obama Cut the Deficit in Half — and Made Us Pay the Price

U.S. Budget Deficit Over Time

Remember when everybody was talking about the budget deficit?

It wasn’t that long ago. In fact, it was one of the biggest factors in the 2012 presidential election. After all, it was over $1 trillion at the time.

Today, it’s $500 billion. And falling.

This, of course, is one of Barack Obama’s legacies. He raised taxes on the rich and cut spending across the board. Even with strong growth in mandatory programs like Social Security and Medicare this year, the federal government is going to spend about the same amount of money it spent in 2012 — and less than it spent in 2011. Adjusted for inflation, the government has shrunk.

But it has come at a cost.

Case in point: We have run out of money to fight wildfires.

A couple decades ago, wildfires in the western United States typically consumed 2 to 4 million acres in a year. Nowadays, they consume 6 to 8 million acres. As a result, the cost of wildfire suppression has more than tripled in that amount of time. And yet, Congress continues to allocate funding based on what it cost a decade ago, instead of what it costs today.

So it’s not surprising that Agriculture Secretary Tom Vilsack ran out of money to fight wildfires this year, forcing him to divert money away from programs that preventwildfires — magnifying the problem in years to come.

Traveling to the other side of the country, a Pennsylvania official testified in court earlier this week that he and his fellow regulators didn’t investigate chemical leaks that were allegedly poisoning citizens’ drinking water near natural gas wells.

But this shouldn’t surprise us either. After all, the Associated Press recently discovered that 40 percent of new oil and gas wells haven’t been inspected in this country. The report described the regulators as “so overwhelmed by a boom in hydraulic fracturing, or fracking, that [they have] been unable to keep up with inspections of some of the highest priority wells.”

It’s not like those investigations really matter, right? The Pennsylvania trial revealed that landowners were drinking water with “explosive levels of methane.” Meanwhile, a new paper published this week by researchers at Stanford and Duke showed that even tiny amounts of fracking wastewater can contaminate drinking water with toxic compounds.

So I guess it’s no big deal that regulators are so underfunded that they’re neglecting almost half the country’s drilling wells.

You’d think we would’ve learned this lesson last year when the IRS scandal revealed that auditors were singling out political groups — conservative and liberal, by the way — for investigation without any apparent probable cause.

For years, the IRS has been underfunded. The National Taxpayer Advocate said so. A Boston Globe investigation said so. The Government Accountability Office said so. And they all predicted that underfunding would result in less enforcement and more cutting corners. In fact, they said taxpayers would lose money because every dollar in budget cuts led to seven dollars in lost tax revenue that they would’ve collected if they’d had the manpower to do so.

Then the scandal hit, revealing that IRS officials were so “overworked” that they felt they had no choice but to take shortcuts through the “flood of applications” on their desks.

These are only a few examples of the price we have paid for a smaller deficit.

Barack Obama deserves credit for delivering on his promise to shrink the deficit — a promise that Mitt Romney and his tax cuts would surely have violated — but Americans have to ask themselves whether they really want a smaller government. Do we really want millions of acres destroyed by fire, and drinking water contaminated with toxic chemicals, and government officials harassing the innocent? I know I don’t.

And I also know there’s a better way. It begins with the understanding that, for all its faults and inefficiencies, our government does many good, essential things in our society. And yes, those things come at a price. But that is a price worth paying.

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This op-ed was published in today’s South Florida Sun-Sentinel and Huffington Post.

I Once Visited Third Base

by Norman Horowitz

Barry Switzer was a famous football coach. A Chicago Tribune article once opened with a quote from Switzer: “Some people are born on third base and go through life thinking they hit a triple.”

To me, this fits Mitt Romney perfectly.

I write this out of a sense of frustration in that Romney comes from “the landed gentry” and cannot “pull off” his portrayal of being an “everyman.”

I was not raised in Bloomfield Hills, Michigan, as Mitt was.

I was raised in the Bronx.

I did not attend Stanford for a year, as Mitt did.

I was not in France for 2 1/2 years as a Mormon missionary.

I entered the United States Air Force during the Korean War.

I did not earn a Bachelor of Arts degree in English from Brigham Young University or a joint JD and MBA from Harvard University in 1975 as a Baker Scholar.

I attended the RCA Institute studying electronics and worked at a minimum wage job to be able to support myself.

I did not enter the management consulting business, which led Mitt to a position at Bain & Company.

I got a clerical job at Screen Gems International.

I did not serve as CEO of the company.

Maybe that’s why I do not oppose mandatory carbon caps known as “cap and trade”…

And why I do not favor increased domestic oil drilling…

And why I do not support a managed bankruptcy of the American automobile industry…

And why I do not favor getting tougher with China on trade issues…

And why I get annoyed when Romney says:

The American culture promotes personal responsibility, the dignity of work, the value of education, the merit of service, devotion to a purpose greater than self, and, at the foundation, the pre-eminence of the family.

The dignity of work? Really? How would he know?

The Day the Economics Profession Lost Its Last Shred of Dignity

January 14, 2011. That’s when Stanford economist John B. Taylor made the following arguments:

  1. Higher government purchases, as a percent of GDP, are associated with higher rates of unemployment. Therefore: “There is no indication that lower government purchases increase unemployment; in fact we see the opposite…”
  2. Higher levels of investment, as a percent of GDP, are associated with lower rates of unemployment. Therefore: “Encouraging the creation and expansion of businesses should be the focus on government efforts to reduce unemployment. The recent compromise agreement to prevent the increase in tax rates on small businesses and the move to lighten up on the anti-business sentiment coming out of Washington are two steps in the right direction.”

And with that, I lost all respect for Taylor.   Continue reading “The Day the Economics Profession Lost Its Last Shred of Dignity”

Q: Am I allowed to copy images from newspapers, etc? What are my copyright obligations here?

I am positively giddy–yes, I said giddy–to introduce the newest contributor to Trading Eights.  Ronald C. Burkhardt has become a close friend and intellectual sounding board over the past few years, but more important for you, he is the most blog-savvy person I know.  I am indebted to him for his help in designing this site, for instance. Just about everything that looks good on this site is all his doing–and I’m glad I finally get to publicly thank him for that–and anything you don’t like…well, that’s probably my fault.   His series, “Metablogging,” will answer everything you (and I) have ever wanted to know about blogs and the Internet community. Love it or hate it, the blogosphere is fast becoming one of the most important social and political forces in the 21st century, and Ron is our behind-the-scenes expert. You can submit questions to him by clicking the “Contact” link at the top of this page.  And we really want to hear from you: Make him work! — AWO

A:  I would not copy images from websites, although I’ve seen some people use smaller degraded thumbnails (of charts, for instance) that point back to the originals.   In any case, proper attribution of any content is the defacto norm for most ‘professional’ bloggers.   Continue reading “Q: Am I allowed to copy images from newspapers, etc? What are my copyright obligations here?”