Open thread Feb. 16, 2011 Dan Crawford | February 16, 2011 8:15 pm Comments (54) | Digg Facebook Twitter |
I posted this on the Feb 11 Open thread which had rolled off the main page. I am reposting it to insure that you have an opportunity to read it and capture the source links.
Last month, you responded to coberly on the Open thread 28 Jan 2011, explaining that you weren’t citing your own federal budget process definitions for entitlements and mandatory spending. That comment drew a response from Bruce Webb. Here are the first two comments in that exchange:
Open thread Jan. 28.2011
Posted by Dan Crawford (Rdan) | 1/28/2011 06:52:00 PM
CoRev – Friday, January 28, 2011, 9:57:31 PM – “Dale, we’ve had this discussion re: sense and your hyper sensitivity to SS. Its not my definition of entitlements/mandatory spending.
Using arguments that it is “self funded” is meaningless and frankly a misstatement. More accurately it does have a dedicated funding stream.”
Bruce Webb – Saturday, January 29, 2011, 2:44:33 AM – [CoRev] “Its not my definition of entitlements/mandatory spending.”
“No and it is not CBOs or OMBs either. Instead it is doublespeak promoted by a combination of groups founded and funded by Peter Peterson or the Koch brothers plus AEI.
The real difference between ‘mandatory’ and ‘discretionary’ is the way they are treated during the Budget and Appropriations process and not to any legal subordination of one to the other. In any given year Congress can change the levels of most ‘mandatory’ spending or eliminate the programs altogether, on the other hand the Constitution mandates that both Courts and the Navy have to be funded. So which is actually ‘mandatory’?
Which is why the argument is so frustrating, the Right simply manipulates technical terminology to make rhetorical claims that are meaningless in actual political reality. And the smarter ones know this full well and devise the talking points with malice aforethougt.”
—- end of comments —-
In truth, a glossary of budget terms is provided by OMB and CBO. The documents are available online to all readers.
OMB provides the budget process definitions in the President’s fiscal year budget submission. The definitions are explained under the “GLOSSARY OF BUDGET TERMS” provided in the “Budget Concepts and Budget Process” section of Analytical Perspectives volume, Budget of the United States Government.
The OMB “GLOSSARY OF BUDGET TERMS” are located on pages 131-135 (pdf pages 19-23) of the “Budget Concepts and Budget Process” section of Analytical Perspectives volume, Budget of the United States Government, Fiscal Year 2011.
Budget Concepts and Budget Process – FY2011 federal budget submission
The OMB “GLOSSARY OF BUDGET TERMS” are located on pages 133-136 (pdf pages 21-24) of the “Budget Concepts and Budget Process” section of Analytical Perspectives volume, Budget of the United States Government, Fiscal Year 2012.
Budget Concepts and Budget Process – FY2012 federal budget submission
CBO provides a glossary of terms for economic and budgetary terms.
I read the following article a few days ago while researching information on prices of commodities. I thought it was interesting that the following excerpt was included in the presentation. I have not seen such a comparison elsewhere.
Let them eat cake
By Hossein Askari and Noureddine Krichene
Feb 10, 2011
“Food and energy price inflation cannot be totally and simply explained by Bernanke’s attribution of demand pressure in emerging countries and the desire to consume meat instead of grain, or to Sarkozy’s tirade against the imagined role played by speculators. Inflation is not an instant phenomenon. It is an ongoing process that starts at a low rate, accelerating as the underlying causes are exacerbated.
Consider prices of a number of staple commodities since the recent era of persistent loose monetary policy which began in 2002. From 2001 to 2010,
gold rose from $258 an ounce to $1,431 (a multiple of 5.5);
crude oil from $20 a barrel to $88 (a multiple of 4.5);
corn from $181 a bushel to $678 (a multiple of 3.7);
wheat from $246 a bushel to $859 (a multiple of 3.5);
soybean from $420 a bushel to $1,394 (a multiple of 3.3);
and sugar from 4.65 cents per pound to 34 cents (a multiple of 7.3).
But if these commodities were priced in gold, instead of the dollar, then the gold price of:
crude oil has fallen by 19%;
corn has fallen by 32%;
wheat has fallen by 37%;
and the price of soybean has fallen by 40%;
but the gold price of sugar has gone up by 31%.
Why has the gold price of most basic food and energy products fallen substantially during 2001-2010, while the dollar price of these same commodities has risen by multiples of 3 to 7? Because the Fed could not inflate the supply of gold, but could inflate the supply of dollars at will. The balance sheet of the Fed has risen from $575 billion in 2001 to $2,400 billion in 2010 (a multiple of 4.2).”
The Democratic leaders of the U.S. Senate unveiled their new economic plan, “Winning the Future”, on Wednesday.
They took action on it last week at their Democratic retreat in Charlottesville, Virginia and again at a Tuesday lunch meeting, the results of which were announced at a Capitol news conference Wednesday morning. News coverage on Tuesday indicated that the announcement would be made on Wednesday. Senate Majority Leader Harry Reid, Majority Whip Dick Durbin, Democratic Policy and Communications Committee Chairman Charles Schumer, and Democratic Conference Secretary Patty Murray rolled out the new plan. The press conference was conducted prior to their afternoon meeting with President Obama and Vice President Biden. Interestingly, they adopted the title of former Representative Newt Gingrich’s book in presenting their plan.
Details of the plan are available at the websites of Senator Reid and Democrats.Senate.Gov :
Reid, Senate Democrats Roll out Agenda for Winning the Future by Cutting Spending, Creating High-Paying Jobs and Keeping America Competitive
February 16, 2011
Senate Democrats Roll Out Agenda For Winning The Future By Cutting Spending, Creating High-Paying Jobs And Keeping America Competitive
February 16, 2011
The plan is broken down into these elements:
Winning the Future
– Five-Year Spending Freeze
– Tax Reform
– Expand and Extend R&D Tax Credit
– Jumpstart Clean Energy Technology
– Energy Efficient Buildings and Homes
– America Invents Act of 2011
– Encourage Small Business Innovation
– Cyber Security to Protect America’s Entrepreneurs from IP Theft
– FAA Modernization Act
– End Off-Shoring of American Jobs and Attract New Ones
– Build a 21st Century Surface Transportation System
– Connect America
– Double America’s Clean Energy Manufacturing
– Build a “Smart” Electric Grid
– Boost U.S. Manufacturing of Energy-Efficient Appliances
– End China’s Unfair Currency Manipulation
– Build a Competitive Workforce
– Reform America’s Schools to Educate the Entrepreneurs of the Future
– Expand the American Opportunity Tax Credit
I have no idea if the plan outline or detail specifics were coordinated with the Obama Administration, but it dovetails with the President’s recent presentations and State of the Union speech. I will reserve opinion on the plan until other readers have an opportunity to read it. It’s a brief read.
Thanks MG, gottem book marked.
Could you please compute for us the cost of commodities priced in iPods instead of gold or dollars?
Then please explain how Fed policy explains that?
MG, it sure looks as thought it’s a cooredinated implementation of Obama’s deficit reduction/budget plan. While reading it one ear was listening to two FL legislators, Sen. Nelson and Gov Scott. Nelson insists, if necessary the Senate will go around FL politicians to build the high speed train between Tampa and Orlando. 90%, $2.4B, is already budgeted/allocated (meaning FL will need to pony up the reminaining $240M) to build it.
High speed trains are peopole movers and not freight. Who is demanding this people moving infrastructure? Certainly does not appear to be Floridians, except for one Senator and …?
WI has done the same and NJ has cancelled a tunnel project. The states claim they are cancelled due to an inability to fund, and supporting politicians claim they are cancelled due to politics.
I suspect both are in play, but who is more correct? My own reading is the origination of these projects were mostly political, with some political cronies getting their pockets lined with federal funds, that were spent to implement unneeded/unwanted/politically motivated “Green” infrastucture. If localities were allowed to decide, would they have prioritized these kinds of “Green” projects? Would they have funded them? What these cancellations indicate is probably not. So, my bet is politics trump common sense local needs.
MG, it sure looks as thought it’s a coordinated implementation of Obama’s deficit reduction/budget plan. While reading it one ear was listening to two FL legislators, Sen. Nelson and Gov Scott. Nelson insists, if necessary the Senate will go around FL politicians to build the high speed train between Tampa and Orlando. 90%, $2.4B, is already budgeted/allocated (meaning FL will need to pony up the reminaining $240M) to build it. Gov Scott was saying FL can not afford the $240M to build it and moreover is expected to be on the hook to fund any future operating losses.
High speed trains are people movers and not freight. Who is demanding this people moving infrastructure? Certainly does not appear to be Floridians, except for one Senator and …?
WI has done the same and NJ has cancelled a tunnel project. The states claim they are cancelled due to an inability to fund, and supporting politicians claim they are cancelled due to politics.
I suspect both are in play, but who is more correct? My own reading is the origination of these projects were mostly political, with some political cronies getting their pockets lined with federal funds, that were spent to implement unneeded/unwanted/politically motivated infrastucture. If localities were allowed to decide, would they have prioritized these kinds of high speed train “Green” projects? Would they have funded them? What these cancellations indicate is probably not. So, my bet is politics trump common sense local needs.
Meanwhile mass protests in WI have greeted Governor Scott Walker’s (R) plan to pass legislation outlawing union representation for the state’s public employees.
What’s disgusting? Union Busting!
Joel, what makes you think inserting a proxy for commodity impact pricing significantly changes the Fed monetary policy impacts on commodity prices.
(BTW, the bolding is there because yesterday I was beat up for inadequately qualifying a remark.)
Most Governors are watching the WI ?union busting? effort. If it fails, then the inevitable bankrupties of some states will have the same results. To this outsider a steep glide path that salvages union participation is better than a brick wall crash where union participation is shattered make good sense.
BTW AS, before going off on my comment, know that I have been in several unions, and actully worked at a big union national headquarters.
Right. Some of your best friends are union members etc.
So I’ll bite: In Walker’s original plan to call out the national guard to “enforce order” against students and teachers are the soldiers represented by the brick wall? Or the glider?
More to the point what impact do you think massive multi day protests will have on Mubarak’s I mean Walker’s plans?
How about the F-35 extra engine Mr. Boehner kept pushing, then lost yesterday in a clear vote on the funding. Yes, lots of projects are political in nature…why is it a partisan issue here and not a fiscal issue?
Should’t those who underfunded pension plans for the last twenty years go to jail based on the results??
A different more expensive tunnel was pushed in NJ….maybe the motivation was political? And why can’t Bost to NYC run be funded instead for high speed rail…
“Oh Hi Governor Schwarzennegger!”
Can anyone tell me why the diletante’s playing the latest “Kabuki” in Washington D.C. are so hell bent to being the ones who flush the social & structual infrastructure down the toilet?
short answer: It pays better than being part of the swirling refuse.
I don’t. I just think your comparison of commodity prices in gold to commodity prices in dollars doesn’t make a useful point. One might just as well denominate commodity prices in iPods or Yap island coins.
Fed policy influences the value of the dollar. Trivially, it also therefore influences anything that can be purchased in dollars.
Longer answer courtesy John Steinbeck: “It has always seemed strange to me… the things we admire in men, kindness and generosity, openness, honesty, understanding and feeling, are the concomitants of failure in our system. And those traits we detest, sharpness, greed, acquisitiveness, meanness, egotism and self-interest, are the traits of success. And while men admire the quality of the first they love the produce of the second.“
as a courtesy to those of us with slow modems, would you please copy and paste the relevant definitions and why you think they bear on the issue.
the issue, as i see it, is that Social Security is paid for entirely by “taxes” collected from people who were told those taxes would be used only to pay for the retirement benefits of the people paying the taxes. What “definitions” are used according to a glossary of budget terms seem to me to be beside the point. Social Security is legally, and morally, outside the budget… layman’s definition… and have been described so routinely for the past thirty years that i am aware of. Until it became clever for the Big Liars to obscure the issue.
Ah well….MA faces a big shortfall and is not as bad off as some…I think a bi-partisan legislative and executive class action is worth consideration. To avoid repeats of such you know. This is not an unkown situation for years…even in good times.
oh, the other half of “off budget”: no taxes collected from other than payroll taxes are used to pay for any expenses of Social Security, neither benefits nor operating expenses.
this will have been changed somewhat by the recent cynical “payroll tax holiday” but generally when the bad guy stabs you in the back you don’t suddenly agree that he was telling the truth all along.
I will go out on a limb and make this prediction: The first shot fired by civil authorities in WI will result in Governor Walker’s recall. I believe his now wavering colleagues in the GOP legislature are starting to understand that.
This is the state that sent Russ Feingold to the senate 3 times. They’re not all wingnuts.
Walker’s plan s the steep glide path. Doing nothing continuing paying at the current rates and contracts is the bick wall. If and only if the state(s) decide to go bankrupt.
As to the protest, it looks as though it will affect the legislature, and not Walker.
AS, I have a question for you, why is it the worst off states financially are the most liberal?
Joel, take your argument up with the authors of the article. They are neither I nor MG.
Personally, I think defunding the F-35 engine was a good move. The penatagon has been trying to defund/cancel for several years. Next time we hear Tea Party members are junior/powerless/… remember what they have done in the past two weeks alone.
Who wants High Speed trains from Tampa to Orlando? Anyone who wants to travel cheaply and quickly to Disney World from Tampa. Cuts out a whole leg of the airfare and makes the trip from say Ohio, much faster on the whole. You can’t get anywhere from here in the interior of FL without long car rides or bad air connections. Basic fact that’s bad for tourism.
Driving all the way from Michigan is not really easy for older people but a train to NOLA, to Jax to Orlando would be cool for those who have an interest only in the fake Disney Florida. I like the real Florida with gators and snakes, but I’m a native. Born and raised in Miami in the 40’s. Real swampstomper. Live in SWGA because the gators and the snakes are the same and there’s no tourists. Heh. NancyO
Oh. You mean like my home state of TX?
You sure got something, there, amateur soc. NancyO
This is one of several surprises. Good for the soul. The whole F-35 trillion dollar mess is pork.
Too bad there is also a rash of cultural items concerning abortion, planned parenthood etc. Makes for uneasy alliances.
it should be noted that the commodity price is not the price to the consumer. it is the price to the farmer and anyone will tell you that farmers are going broke. the “inflation” story does not explain prices.
this is the kind of juvenile reply that makes you so much fun to have around.
Or maybe you’re referring to the People’s Republic of AZ?
no the bankruptcies would not be inevitible. taxing the people and companies to pay for actual services received without forcing public workers to accept bribes in order to live would do the job.
Uh, no, CoRev. You posted it. You called it “interesting.”
WI isn’t so badly off compared to say, Mississippi. You want poor? Come South. However, I wonder what the NLRA has to say about state employee unions. I suspect that the Governor knows what he wants but may not be able to get it. If I see anything about the unions’ rights in this matter, I’ll post it or summarize it.
And, you know, somebody gets shot, it ain’t gonna be like Kent State was. People in WI are just conservative enough to want to put folks that did the shooting in jail. That’s why down here in the 60’s people wore sheets when they took after freedom riders. Nobody with a brain wants to get caught holding the gun that killed a teacher from Madison. NancyO
Gliding through consititutionally protected rights of free association. Should make for some interesting appellate court decisions.
Joel, reading comprehension is not your strong suit: Here’s the beginning of the article:
I read the following article a few days ago while researching information on prices of commodities. I thought it was interesting that the following excerpt was included in the presentation. I have not seen such a comparison elsewhere. …”
Unless the structure of posting changed for this one article the poster was MG, and he said it was interesting.
Here’s what Brad Delong has to say about Congress’s ability to address the debt.
The big if is, to put it simply, this: congress will pass something stupid and the president will sign. Congress might never come up with payfors for its recurrent AMT patches. Congress might remove the revenue raising parts of the Affordable Care Act. Congress might remove the cost saving parts of the Affordable Care Act. The Supreme Court might decide, just for the hell of it, to rule that the cost saving parts of the Affordable Care Act are unconstitutional. Congress might pass a big unfunded tax-cut just for the hell of it. Congress might pass a big unfunded spending increase just for the hell of it.
All of these ifs are very real worries.”
There is likely to be a quote from Lewis Carroll that is yet more accurate to the DC situation as well, for that matter, to the current machinations going on at state capitals across the country. All have a hidden agenda, nothing is as it seems is likely the first line of any reasonable description. The question that keeps coming up in my own mind is what is it that the populace wants from its government. Even the Tea Baggers recognize the need for a functional government beyond “might makes right.” Remember, “Keep your government hands off my Medicare.”
So tell me my deficit hawks with a lust to cut off the hands of government’s committment to some measure of social responsibility, interstates, bridges, retirement insurance, helath care for the elderly and the poor, garbage collection and recycling, water treatment and delivery, fire and police protection, the intellectual development of our children, are they all on the block? Yes, this list is inclusive of both federal and state/municipal purview, but they are interlinked with over lapping responsibility and funding mechanisms. In NY, NYC,NJ and Wisconsin, at the moment, each executive is claiming to cut teaching staffs by a significant number. Is education really a budget constraint?
The solution is taxation. There is no getting around that simple point. Efficiency is good. Quality control is important. A lot of people have been getting too big a break for too long a time. High taxes in a complex society is the cost of quality police and fire protection, first rate educational systems and smooth roads and safe bridges. We’re electing shills and dirt bags. Some claim to be business people bringing business ideas to government. Great idea. Who was it that trashed the banking system recently? Who is it that’s been sending the jobs to every remote corner of the globe and killing the local economy in the process? Thank goodness we have business people to run the government or the shills they send to do the job in their stead.
i wonder if john ‘took one for the team’ publicly to show he’s not going to harrypelosi legislation…
Brad and NO, et al, whaddya mean might????? Many believe have, are and will.
In other employment related news I note the expansion of a trend I’ve been worried about for over a year now: The increasing tendency of employers with open positions to refuse to consider people currently unemployed.
12-18 months ago the evidence was more anecdotal. But a story this week by my local public radio affiliate on job searching in Austin included the advice that “If you want to find a job you better have one”. Hearing these policies articulated in a city that has been relatively unaffected by the downturn is convincing me this is real and growing. Another story this week mentioned that the Labor Dept has asked the DOJ for an opinion on whether this constitutes defacto discrimination against non minority applicants since they are statistically more likely to be unemployed.
The key question(s): Should this type of discrimination be illegal? If so, how do you enforce such a law? If not, why not?
Sorry should be “against minority applicants” above.
LOL! And I suppose it was sheer coincidence that it was reposted under your name?
CoRev, plausibility is not your strong suit.
Joel, huh!?!!??? Reposted? Not in my browser. Better take a look at your puter, glasses, or reduce the meds, because now you are seeing things.
guess i’m not sure why companies would open themselves up to this. it’s like putting a ‘kick me’ sign on you back. their simple response should be to collect the app’s, then file 13. enforcement would be damn near impossible, unless you have a nlrb/doj ombudsman on staff…
I provided the comment post that started this discussion, not CoRev, regardless of your false assertions and normal, useless personal attacks at AB.
I found it interesting for a number of reasons. First, I was surprised to see that comparison included in the article, which you probably haven’t read. Second, it’s interesting to me that the price of corn would have declined by 32% if priced in gold. I find that a bit odd considering the high demand for corn resulting from the ethanol program and global demand elsewhere. If that’s the case, then I wonder how much money corn growers are losing on a net production basis. I thought that the corn growers were doing pretty well, at least among the farmers I have talked to during the past few years.
I don’t question the fact that the U.S. Dollar has lost considerable value since the year 2000, but I didn’t know that commodity prices would have declined that much if the U.S. Dollar had been more stable during the period 2000-2010. Third, if their analysis is correct, what does say about the debasing of the U.S. Dollar? Try looking to the future on the implications of that and the credit markets.
The article was written with a global perspective in mind, so it’s not a typical U.S. only analysis. I think that the issue of the declining value of the U.S. Dollar deserves more attention including its impacts on economies elsewhere in the world.
Jim Hamilton at Econbrowser has an interesting article up regarding the Fed’s QE2 impact on banking reserves. We still don’t know how that unwinding exercise to be conducted later on will impact the value of the currency and whatever else. It could be a serious problem. If so, commodity prices may jump again.
I could address your ipod question, but frankly I don’t take you seriously. I believe you are just a political hack throwing out a few attacks and standard sound bites. Besides, some individuals in China who may be trading with ipods out the back door of the factory could answer the question better. Discounted, of course. I have seen barter trading like that in certain parts of the world.
it’s too bad Joel apparently got confused about who posted what when. sometimes it’s hard to tell you and CoRev apart.
but Joel’s point deserves to be taken seriously whether you understand it or not. Gold is a thing that has its own supply and demand curves, just like corn. Inflation… the value of the dollar… is a kind of sum of the prices of things relative to the dollar. That requires a more sophisticated analysis than just comparing the price of one thing to the price of another.
Reason Foundation provides the background for not recommending approval of the high speed rail connection between Tampa and Orlando in these articles and a study performed in January 2011. The Reason Foundation study was cited by the governor of Florida for denying the project.
I don’t see any reason why someone traveling to Orlando would fly into Tampa unless Tampa was also a side trip destination. Similarly, it wouldn’t make any sense to fly into Tampa and then take a train to Orlando if Orlando was the original sole destination.
“The Orlando International Airport is the busiest in Florida and the 12th busiest in the United States, with more than 80,000 passengers flying in and out of the facility every day. The airport is serviced by approximately 80 domestic and international airlines (including charters) and is located about 6.5 miles from downtown Orlando. Covering almost 15,000 acres, the airport has four parallel runways, two of which are 12,000 feet long, one of which is 10,000 feet long, and one which is 9,000 feet long. The airport can operate three runways simultaneously to handle increased airplane traffic. In 2007, more than 35.7 million passengers used Orlando International Airport.”
Tampa International Airport is drawing about half as much air passenger traffic on an annual basis.
doesn’t know the history of inter urban transportation for the last two thousand years. he would not understand why it was necessary to build a Roman road from Paris to Lyons. He would have opposed clearing the Sagimaw, the Cumberland Road, the Eire Canal, the Northern Pacific Railway and the Interstate Highway system.
I don’t know if the Orlando – Tampa railroad pencils out, but I like to think it would give visitors to Disney World a chance to visit the west coast of Florida and find out how much pleasanter reality is than Disney, without being strip searched in the airport.
But I would not expect MG to see any reason why someone traveling to Orlando would ever want to leave the security and air conditioning of the airport. Just as well.
And never take anyone seriously who calls themselves Reason.