/* Google Analytics Code asynchronous */

Wednesday, February 16, 2011

"Tackling Entitlements"


I'm so encouraged that there is a lot of good stuff going on!

Krugman, Ezra, Yglesias, just to name a few and probably to miss many others.

I'm ready for the next evolution. (In which Paul Ryan does a face plant...).

Is there any amount of budget variance analysis that would convince a sober, sane mind that we really do have a revenue problem, not a "spending problem"?

Let me try.

We hear often that "entitlements", "SOCIALSECURITYMEDICAREANDMEDICAID", are the "big government" that is driving us to Obama deficits or whatever.

So, let's go have a look at what percentage of the yearly budget variance is being driven by "SOCIALSECURITYMEDICAREANDMEDICAID", right?

How? Take how much outlays for "SOCIALSECURITYMEDICAREANDMEDICAID" change each year and compare it to the overall budget surplus or deficit.

Remember, Social Security is a net _positive_ in the unified budget, because receipts are greater than outlays (by a lot, because of the boomers). So, if MEDICAREANDMEDICAID add 16 billion to the deficit and SOCIALSECURITY subtracts 26 billion, the net is -10 Billion expected variance. [See year 2000, in the table below.]

Here's a table for what happened during the Bush years.

YEAR Expected Total budget variance (+surplus/-deficit)
2000 10 236
2001 -22 128
2002 -38 -158
2003 -37 -378
2004 -43 -413
2005 -18 -318
2006 -28 -248
2007 -71 -161
2008 -32 -459

So, you can see what so many call "the problem" is just "one problem", because, on these figures, mandatory spending is only driving about 11% of the annual budget variance.

I'm not saying that in the long run, these small and rising variances aren't key.

What I am saying is, "Yes, Virginia, there is a revenue problem."

So, in the medium term, the #1 thing we can do is get rid of Grover Norquist, et. al., right?