Friday, April 15, 2011

Random Thoughts on the Federal Budget Debate

The federal budget has become an arcane assemblage of special interest spending and tax breaks woven into a document so deliberately labyrinthine that not one person in a thousand can possibly understand it.
The budget, personified.
Not one percent of those who claim to understand it actually do, including people who write them (like Rep. Paul Ryan). Which means most anyone who claims to understand the federal budget process in toto is a liar (like Rep. Paul Ryan).

The federal budget is not a single entity but a collection of individual building blocks, each aggressively supported by its own set of lobbyists. Absolutely no thought is given to what those individual blocks will join into building.
The budget, personified. The Republican version is missing a heart.
Most budget debates revolve about meaninglessly small numbers while the big categories are ignored. For example, there is a big discussion about funding for public broadcasting even though it is 0.01% of the budget. Meanwhile the Defense Department's R&D budget alone is over $82 billion (2.2%) and includes some really weird shit.

If you really want to balance the budget it can be done quite easily. One, restore the marginal tax rate to where it was in 1955, a time most everyone agrees was the golden age of the American economy. That would be 91% tax on income over $3.2 million, inflation adjusted from $400,000.

Two, cut the defense budget by two-thirds. Even then it will still be twice the size of the Chinese defense budget.

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