Why Fiscal Conservatives Need to Learn Arithmetic

Duncan Black and Kevin Drum review the silly government finances of Andrew Sullivan. Kevin writes:

Bush’s tax cuts haven’t touched Social Security or Medicare taxes (and both programs run surpluses anyway). They’ve been solely cuts in personal and corporate income taxes, dividend taxes, and capital gains taxes. These are the taxes that fund discretionary spending. Discretionary spending in 2005 was roughly $1 trillion. About half of that was for defense and national security, which Sullivan doesn’t want to cut. That leaves $500 billion, which funds the entire rest of the federal government. The federal deficit for 2005 was over $400 billion. So: if you support the tax cuts, and you don’t want to cut defense spending, and you want a balanced budget, you need to slice about $400 billion out of the $500 billion that’s left. These are round numbers, but you get the idea.

If we are going to preserve Al Gore’s “lock box” with respect to the Social Security Trust Fund, the proper accounting of the Federal deficit is that General Fund deficit running near $600 billion a year. So even if we eliminated all programs outside of defense and national security, we would need tax increases to balance the budget.