The Corner

re: How Would You Slash the U.S. Budget?

A reader sent me his cuts:

Thanks for the link on the Corner to that budget simulator–just wanted to report that I did it: beat the goal while keeping all of the Bush tax cuts, not adding a VAT/cap and trade, maintaining troop levels in Iraq/Afghanistan, not soaking the rich and repealing Obamacare. In fact I don’t think I had to add any major taxes at all, though I did have to raise the payroll tax 1%. My budget would give Tom Friedman a heart attack and make Paul Krugman cry.

It was pretty brutal in every other way though. I managed to protect defense fairly well but focusing on the spending side meant slashing just about everything social program that could be slashed–qu’ils mangent de la brioche. I did save a couple things (helping graduate med students and NASA moon/mars programs). Checking every cutting measure in “tax expenditures” except the one that targets high earners sealed the deal.

Being able to magically cut earmarks in half is indicative of the extent to which political feasibility is accounted for (although I suppose not having an “abolish social security” option means they did consider it on some level), but it still makes for a fascinating theoretical exercise.

I would like to add that I have some issues with a few of the simulator’s assumptions. Among other things, repealing the health-care legislation would increase spending unless you kept the Medicare and Medicaid cuts in place. Also, tax cuts have no impact on GDP. Also, you can’t cut nondefense spending or defense spending in a meaningful way. I am assuming that I would disagree with many of the assumptions being the model , which I am pretty sure are very Keynesian. Still, even with these caveats, I think it is a good exercise.

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