My "Fiscal Fitness" column from this week's Roll Call is about John McCain's promise to balance the budget by 2013.

Comments much appreciated.

There weren't many details available when the Treasury yesterday announced that it would ask Congress for the authority to buy Fannie Mae and Freddie Mac stock should it be necessary.  Published reports like the ones in the New York Times and Washington Post didn't indicate the estimated cost but talked about it being in the billions.

There's little doubt that Congress will provide what Treasury is requesting.  My question as a budget person is how it's going to be treated.

Brad DeLong has one his best posts EVER this past Friday.  Don't miss it.

Andrew, as usual, has raised a number of interesting questions.

I have just one observation.  Does anyone else see the excruciating irony here?  The same administration that wants to do away with earmarks and asks everyone to trust the decisions to department and agency employees, refuses to trust those same employees when they make other decisions.

The word "plan" is in quotes in the title above because what John McCain announced yesterday isn't really a plan that holds together to accomplish something; it's a laundry list the candidate will pull from whenever he needs a talking point. 

Want deficit reduction?  I've got it.  Just look at my plan.

Want an energy policy? Look at my plan.

Want taxes cut?  I've got it, check out my plan.

Among many others, Brad DeLong and Economistmom have more details and an analysis worth reading.  But the easiest way to determine what this was all about is to look at what the candidate actually said yesterday as opposed to teh 14-page written document. According to a reporter from a national publications who called me, McCain never mentioned the worrd "deficit"and didn't talk about deficit reduction.  As a result, this paper decided not to publish a story on it.  In the reporter's terms, his editors "took a pass."

It’s a Case of Murder on the Budget Express
July 8, 2008

There’s a great scene from the 1974 movie version of Agatha Christie’s “Murder on the Orient Express” where her iconic ace detective, Hercule Poirot, wonderfully played by Albert Finney, talks about the number 12.

My Beautiful and Talented Wife (The BTW) pointed me to this story from Lisa de Moraes in this morning's Washington Post about what's available to watch on cable TV today.  The money quote:

And nothing says "founding fathers" like a 17-hour MSNBC "To Catch a Predator" marathon, including two blocks of extra-special "Predator Raw: The Unseen Tapes.

I'm heading to the movies, where Maxwell Smart and Indiana Jones await.

At some point in the past month or so, John McCain and Barak Obama or their advisors have both said that they will pay for some or all of what they're proposing with reduced military spending. 

The problem is that, even if all US troops are withdrawn from Iraq and Afghanistan, it's not at all clear that the Pentagon budget will fall much or even at all.

Consider the following:

Pete's post on gasoline prices obviously hit a nerve.

So here's my question:

If consumers are willing to pay higher prices for gasoline, why should we think that energy companies are going to do anything but charge those higher prices?

Much of this was prompted by Pete's post.  We..and I'm definitely including myself in this category...have lives that assumed that relatively cheap energy would continue.  We have gas guzzling cars, like air conditioning, drive many miles to work, haven't supported mass transit or oil altenatives, etc.   We might not like today's higher prices, but didn't we set ourselves up for this?  Whosever said that prices would always be low?

In other words, in what's supposed to be a market-driven economy, aren't we complaining about the market working?

Yes, I know that supply is being set by a cartel.  But given the amount of refining capability and the worldwide demand, it's not clear to me that pumping more oil would make that much of a price difference in the current environment anyway. 

Andrew, as usual, asks an interesting question: "...how long it should take people to make up their minds about how to cast their ballots..."?

Unless the situation has changed dramatically in the past few years, the answer is that the overwhelming number of voters have already decided who they are going to vote for.  Indeed, most voters make up their minds long before the balloting is ever conducted.  My guess is that as much as 80 percent of the electorate know from the start who they are supporting.  That's especially true in the general election where party affiliation, which is obviously known from the start, rather than any issue, is the most important reason for most people.

Back in April, I wrote about New Jersey Governor Jon Corzine's "testicular fortitude" when he announced a 2009 budget that proposed tp reduce spending below the previous year by eliminating three whole departments and 5000 jobs.  I was, and continue to be, extremely impressed with what Corzine proposed.

Unfortunately, it doesn't appear as if New Jersey voters are as impressed.  Since he proposed the budget, Corzine's approval ratings have dropped steadily and the primary reason appears to be the spending cuts he proposed.

The irony is that a previous New Jersey governor, Jim Florio, was bounced from office in 1993 partly because he dared to propose tax increases.  Florio then lost the Democratic nomination to Corzine in 2000 when he tried to run again.

Last Wednesday's report on WTOP, the all-news radio station here in Washington, was both startling and priceless.  I'm paraphrasing the second part of this quote, but the beginning is exactly what I heard:

"Well-fed policymakers later today will be deciding whether to increase interest rates."

 It took me a minute or two to realize that the reporter was really saying:

"Well, Fed policymakers later today will be deciding whether to increase interest rates."

The more I think about it, I'm not sure what was actually being reported.  After all, lunch is almost certainly provided at these meetings.

First, some full disclosure: In my day job I have a number of mortgage lending industry clients.  None of them knows about or were involved in this post in any way.

Dean Baker has a post today using his usual excellent analytic abilities to dissect a story in today's New York Times about the current state of the mortgage issue.  While I don't always agree with Dean's sense of outrage, his post is definitely worth looking at after you read the Times.

One thing the article and Dean fail to point out is that the housing/mortgage crisis isn't really one problem; it's a steady series of different problems that absolutely defy a single or simple solution.  Lumping them together as "The Crisis" as the Times does complicates the public policy process.

You're playing golf.  You're on the 4th hole.  It's a par 4 and you do it in 3.  (I know this is hard to believe; just work with me.)

You got a birdie on that 4th hole so, according to golf vernacular, you're "minus 1" or 1 below par.  But you actually have 3 more strokes than you had at the end of the previous hole, so you're actually "plus 3."

So which is it, minus 1 or plus 3?

I was asked the equivalent of that question yesterday during a presentation I was making on the 2008 election.  But even though I was the last speaker before the morning session ended and everyone in the room was about to head out with a box lunch for the first tee, the question was about gasoline prices rather than golf.

The question was why were Americans so angry about the price of gasoline when we were paying so much less than most of the rest of the world.

Pete started this and Andrew added smartly to the discussion.  Here are a few thoughts from someone who has served on a budget-related commission and watched while many others crashed and burned.

1.  It's extremely rare that federal commissions ever solve problems.  They are usually a way to delay taking action on some issue.

2.  The only exception to #1 I can think of is the commissions that have dealt with military base closures.  But this is also the exception that proves the rule.  The base closure commissions were successful because they were created when a consensus had developed that their recommendations more or less would be followed.

3.  There is no such consensus on entitlements.

4.  In fact, there is no consensus of any kind on entitlements.

My weekly column from Roll Call:

It doesn't make any difference whether you agreed with his politics, George Carlin's commentary on some of the stranger things we all experience in life everyday was truly funny.  I have performed as a standup comedian and I can tell you that what he did and how he did it left most other comics in the dust.  His routine on the seven things you can't say on television not only was classic comedy, it said more about us at the time than I suspect we ever wanted to admit.  And his character of Al Sleet, "The hippie-dippie weatherman with the hippie-dippie weather, man" was right up there with the best ever created by any comic in any generation.

Carlin died yesterday just a week or so after being named to receive the Mark Twain prize, a lifetime achievement award for humorists, by the Kennedy Center.  That's so mainstream that I wonder if he was amused, flattered, and shocked at the same time.

The Washington Post had an interesting article yesterday by Lori Montgomery that asks the right question: given the real budget outlook, the AMT and expiring tax cut trains coming down the track, and the cost of what's being proposed, should anyone take what the presidential candidates are saying seriously?

CG&G's own Pete Davis has been on top of this issue for some time (see here, and here).  Our own Andrew Samwick has been writing about it even longer.  And I'll have a piece this Tuesday on what to expect budgetwise from whoever gets elected.

But in the meantime, the Post story is definitely worth a few minutes of your time.

I've been traveling much of the past two weeks for work. Nine cities, seven states, and close to 30 presentations about the election and the economy.

What I'm about to say is based purely on anecdotal information. It is not meant to be statistically significant or a good sample. And my audiences were anything but a good cross section of the general population.

But my conclusion is as straight forward as possible: Americans, or at least those I spoke to and with, are very very angry.

Their anger initially seemed to be directed at specific things. Understandably, gasoline prices always seemed to be the first thing mentioned, for example. In fact, the economy in general was a constant source of anger. No one I spoke with over the past few days seems to be looking at the current economic situation as positive. Costs are going up, jobs are going down, inflation is rising, housing is unsettled, investment opportunities are limited, etc.

People are really angry at George Bush.

From his testimony this morning on Capital Hill:

 "There are limits to how big the deficit and the debt can be. Soon it will begin to have effects on interest rates, it will have effects on economic growth, and on stability, so ... it's not just balancing the federal budget, it's really a much broader question of the stability and strength of our economy over a longer period of time,"