Obama

Updating my entry last Friday, we have recalculated the route to get to President Obama's proposed security spending reductions of $400 billion over twelve, yes, count them, twelve years.  Not a great step forward, and well below what Simpson-Bowles, Rivlin-Domenici, or Frank-Paul proposed last year, in fact, roughly a third of what they called for.

If you go to the Stimson Center's Budgeting for Foreign Affairs and Defense website, you will see our new calculation, based on the final FY 2011 budget agreement number for defense, which shows that maintaining DOD's buying power (increasing the budget every year by inflation) provides more than $428 billion in savings from the current DOD plan.  If one left that $28 billion on the table, one could even claim DOD funding would grow after inflation (a teeny, tiny amount), and still achieve Obama's goal.

 Just before noon today, President Barack Obama proposed five new middle class benefits that will be detailed in his budget next Monday:

So why would a sitting president appear on a comedy show as President Obama did last night when he appeared on The Tonight Show with Jay Leno?  Why not just do a bunch of formal news interviews?

This is easy.

Continuing the series, how should a $500 billion spending plan be structured?

If I had my druthers, the word "stimulus" would be expunged from public discussion, along with "bailout" and "rescue."  These words convey the idea that, because we have so mismanaged our economic and financial affairs, we are somehow able or entitled to conjure up additional funds out of thin air to fix our problems.  There are two problems with this idea. 

First, the purpose of government spending is to purchase goods and services that the government needs to meet its responsibilities, not to hand out resources to those who pandhandle most loudly for them.  The reason to spend more in a recession is not to employ idle resources -- it is to be able to stretch the taxpayers' money further by getting a better price for its purchases because workers without jobs will work for less and owners of empty factories will charge less. 

Continuing a series that began last week with health care reform, I suggest that another high priority for the Obama Administration is what is known as the Green Tax Swap -- an increase in the gas tax combined with a reduction in the payroll tax rate that fully offsets the revenue increase.  (By gas, I mean all fossil fuels used for any purpose, but others might restrict what is taxed only to gasoline.)  What is the rationale for this?