The L.A. Times has a fascinating article about the difficulties in accounting for estimated costs in a troop surge in Afghanistan.

The calculations so far have produced a sweeping range. The Pentagon publicly estimates it will cost $500,000 a year for every additional service member sent to the war zone. Obama’s budget experts size it up at twice that much.

[...]

The Office of Management and Budget says adding 40,000 troops would cost about $40 billion a year, or $1 million each. White House officials included in their estimate everything they consider necessary to wage war, including troop housing and equipment.

[...]

The Pentagon arrived at its much lower estimate by dividing its war funding request by the number of troops throughout the region: 68,000 in Afghanistan and up to 95,000 in supporting roles elsewhere, such as on nearby ships or in surrounding countries.

The Pentagon cost includes higher combat wages, extra aircraft hours and other operations and maintenance costs, but omits such items as new weapons purchases — one-time costs that vary by year — and support equipment like spy satellites and anti-roadside-bomb technology.

The Pentagon also does not try to estimate costs of new bases for additional soldiers.

But in a memo early this month, obtained by The Times’ Washington bureau, the Pentagon’s own comptroller produced an estimate that broke with the customary Defense formula and did include construction and equipment.

That memo said the yearly cost of a 40,000-troop increase would be $30 billion to $35 billion — at least $750,000 a person. An increase of 20,000 would cost $20 billion to $25 billion annually, it said — a per-soldier cost equal to or greater than the White House estimate.

Keep in mind that these are per year figures, and most discussiosn of troop escalations involve deployments for longer than that–possibly much longer.

As for which figures to go with, I have to say that I’m going to be inclined to go with the OMB on this. Indeed, I’d be perfectly willing to bet that the OMB is underestimating the costs, and the Pentagon almost definitely is. The appropriations required for combat have, in my experience, often exceeded the initial estimates. After all, who can forget this famous estimate?

Q: Mr. Secretary, on Iraq, how much money do you think the Department of Defense would need to pay for a war with Iraq?

Rumsfeld: Well, the Office of Management and Budget, has come up come up with a number that’s something under $50 billion for the cost. How much of that would be the U.S. burden, and how much would be other countries, is an open question. I think the way to put it into perspective is that the estimates as to what September 11th cost the United States of America ranges high up into the hundreds of billions of dollars. Now, another event in the United States that was like September 11th, and which cost thousands of lives, but one that involved a — for example, a biological weapon, would be — have a cost in human life, as well as in billions, hundreds of billions of dollars, that would be vastly greater.

As a refresher:

The cost of the Iraq War to date: over $700 billion.

The number of biological weapons that were found in Iraq: zero.

Link via Spencer Ackerman.   Photo by Flickr user basheem under Creative Commons license.

In a front piece story in today’s NYT, Edmund Andrews warns that the bill is about to come due on the massive borrowing the federal government has engaged in.

Treasury officials now face a trifecta of headaches: a mountain of new debt, a balloon of short-term borrowings that come due in the months ahead, and interest rates that are sure to climb back to normal as soon as the Federal Reserve decides that the emergency has passed.

[...]

With the national debt now topping $12 trillion, the White House estimates that the government’s tab for servicing the debt will exceed $700 billion a year in 2019, up from $202 billion this year, even if annual budget deficits shrink drastically. Other forecasters say the figure could be much higher.

In concrete terms, an additional $500 billion a year in interest expense would total more than the combined federal budgets this year for education, energy, homeland security and the wars in Iraq and Afghanistan.

[...]

Americans now have to climb out of two deep holes: as debt-loaded consumers, whose personal wealth sank along with housing and stock prices; and as taxpayers, whose government debt has almost doubled in the last two years alone, just as costs tied to benefits for retiring baby boomers are set to explode.  The competing demands could deepen political battles over the size and role of the government, the trade-offs between taxes and spending, the choices between helping older generations versus younger ones, and the bottom-line questions about who should ultimately shoulder the burden.

[...]

The problem, many analysts say, is that record government deficits have arrived just as the long-feared explosion begins in spending on benefits under Medicare and Social Security. The nation’s oldest baby boomers are approaching 65, setting off what experts have warned for years will be a fiscal nightmare for the government.  “What a good country or a good squirrel should be doing is stashing away nuts for the winter,” said William H. Gross, managing director of the Pimco Group, the giant bond-management firm. “The United States is not only not saving nuts, it’s eating the ones left over from the last winter.”

Emphases mine.

This sounds ominous and unsustainable.  But Paul Krugman, recent winner of the Nobel Prize in economics, say these fears are overblown.

As Dean says, the numbers don’t fit the scare story — a decade from now interest payments will reach a level not seen since … 1992. And the market seems unworried, since long-term rates remain low.

The “Dean” is question is Dean Baker of The American Prospect.  He sarcastically titles his post, “In Just a Decade the U.S. Interest Burden Could Be as High as It Was in 1992!!!!!!!”

There is no evidence presented in this article that the rise in interest rates will place the U.S. government in a situation where it will be unable to pay its bills and no one cited in this article makes such a claim.

The article is also completely unbalanced in not presenting the views of any economist who could put the deficit/debt issue in perspective for readers.

Krugman makes the same charge but, oddly, neither of them bother to actually present a counterargument.

Andrews argues that most of the debt is in short-term loans whose price will go up as there becomes more competition for money.  He makes what strikes me as a plausible case that higher interest rates, growth in entitlement spending, and a smaller tax base will make servicing the debt very, very difficult.   Countervailing factors could offset this but neither Krugman nor Baker tell us what they might be.

It’s true that we had gloom and doom forecasts during the 1992 recession.  But we only solved those through the dual magic of the dotcom bubble and the post-Cold War defense drawdown.  It’s not likely that those events will repeat themselves.

Photo by Flickr user kandyjaxx under Creative Commons license.

Last week, Congress approved the 2010 Defense Authorization Bill, with costs totalling to a whopping $680 billion. And as Christopher Preble points out, that’s not all:

The defense bill represents only part of our military spending. The appropriations bill moving through Congress governing veterans affairs, military construction and other agencies totals $133 billion, while the massive Department of Homeland Security budget weighs in at $42.8 billion. This comprises the visible balance of what Americans spend on our national security, loosely defined. Then there is the approximately $16 billion tucked away in the Energy Department’s budget, money dedicated to the care and maintenance of the country’s huge nuclear arsenal.

All told, every man, woman and child in the United States will spend more than $2,700 on these programs and agencies next year. By way of comparison, the average Japanese spends less than $330; the average German about $520; China’s per capita spending is less than $100.

And don’t forget that national security spending also contributes to our growing budget deficits. In Fiscal Year 2009, the United States spent approximately $383 billion on interest payments to service the debt (by way of comparison, that’s about 7.5 times NASA’s budget). As we continue to allow national security spending to go unchecked, those numbers are only going to get worse.

The amount of money being poured into national security spending is completely irresponsible and unsustainable. We can’t afford it. As we (hopefully) wind down the wars in Iraq and Afghanistan, we need to take a real hard look at our foreign policy–particularly why we feel the need to spend more on defense than the rest of the world does combined. There’s no reason why we can’t adopt a more restrained policy and still keep the United States secure. I mean, let’s put this in perspective. We could cut DOD appropriations in half, today, and we’d be spending more on defense than all of the EU nations combined.

We need to move to a more responsible course.

(cross posted to Heretical Ideas)

Update: Just to be clear, I wouldn’t advocate cutting the defense budget in half today. I merely wanted to illustrate that cutting DOD appropriatons in half from $680 billion to $340 billion would still result in the U.S. spending more than the EU on the military. I do think that a 50% cut from current levels is feasible, but it would have to be phased in long term–15 years or so–to be at all workable.

President Obama is set to address the nation’s schoolchildren next week, presumably to propagandize them into his evil agenda of turning the country into Communist Russia (pronounced “roo-shuh”) and offing granny to save money on health care just as they do in his native Kenya. There are even instruction manuals to enlist the support of the teachers unions in brainwashing our youth.

Michelle Malkin has a huge exposé on this scandal:

Instead of practicing cursive, reviewing multiplication tables, diagramming sentences, or learning something concrete, America’s kids will be lectured about the importance of learning. And then the schoolchildren, from pre-kindergarten through 12th grade, will be exhorted to Do Something — other than sit in their seats and receive academic instruction, that is.

What is it that something they’re supposed to do?  They’re not saying but apparently they want the kids to figure it out for themselves.

The activist tradition of government schools using students as junior lobbyists cannot be ignored. Zealous teacher’s unions have enlisted captive schoolchildren as letter-writers in their campaigns for higher education spending. Out-of-control activists have enlisted their secondary-school charges in pro-illegal immigration protests, gay marriage ceremonies, environmental propaganda stunts, and anti-war events.

And that’s without the cult-inducing powers of a presidential speech!

Stephen Green would keep his son out of public school that day if his son were old enough and he urges you to do the same.

Nope, Obama can’t just say hey to the kiddies and encourage them to do their homework. He has to make this a — what does the Left call it? — a teachable moment. A speech-in, if you will. Teachers have even been given handy instructions on how best to integrate The One into the classroom.

AllahPundit thinks this is overreacting a mite,

One pap-filled 20-minute speech about working hard and serving others is so lethal a threat to tender minds that they have to be yanked off the premises for the day to shield them from it?

[...]

If this turns out to be some hamfisted attempt by The One to pitch his agenda to kids — which would be politically insane given the outcry it would cause, a sneak preview of which may be found here — there’ll be ample time for outrageous outrage later. For all the media fainting spells over Obama’s oratory, you can count on one hand the number of truly memorable lines he’s uttered; I doubt he’s going to come up with such a corker next week that kids will be planning their lives around it. Remember, this is the same guy who can’t sell universal health care, the virtual raison d’etre of the Democratic Party these days, to the Blue Dogs.

Steve retorts:

Yes, the speech itself will almost certainly be harmless. I don’t expect anyone’s kids to be coming home and berating their parents for being against this program or that agenda. I do expect Allah has it quite right, that this speech will be just another Daddy Speech, meant to encourage my son to work hard in school.

But you know what? The President of the United States — whether an Obama a Bush or a Lincoln — is not my son’s daddy. That’s my job. We’ve had enough nannystatism, and enough daddystatism, too.

I actually agree with every word of that. Granted, “stay in school” is such an innocuous message that it’s hard to object to its being presented.  But do we really need to add to the already inflated sense of the president of the United States as our national daddy?  The man’s in charge of one branch of the federal government; he’s not king.

Still, as Doug Mataconis points out, this is hardly new.  Why, Ronald Reagan himself gave such as speech. So did both Presidents Bush.  Indeed, Reagan went to far as to answer questions from the kiddies on federal budget priorities and gun control!

MichaelW thinks the whole thing is “creepy” and says it’s different than what Republican presidents have done.  For example, Bush 41 was telling kids to stay off drugs.  He sees a more nefarious agenda from Obama:

President Obama has already shown that he’s not above using children to advance his political agenda, so it’s not surprising that those opposed to his aims would be a bit skeptical of his speech. Adding to the wariness is the fact that he only seems to make these speeches when he needs help with bolstering his political capital (e.g. the “race speech” after Jeremiah Wright blew up in his face). After the battering his health care insurance reform plans took in August, it almost seems too convenient that he would suddenly want to address all the school kids in the nation, right about when he’s planning to try and save the one program he truly wants to enact.

But Allah’s right on this.  Not only is it hard to believe Obama is going to say anything that rises above the level of pabulum but, if he does, the national outrage will make the health care town halls look like love-ins.

I tend to agree with Joanne Jacobs that the whole thing is innocuous, if unlikely to much matter: “I think the president is going to ask kids to work hard in school and teachers will try to get them to pledge to work hard in school and most of them will work just as hard this year as they did last year.”

AP Photo

David Frum frets that conservatives might be in for a Pyrrhic victory in the health care fight if they define winning as “beat back the president’s proposals, defeat the House bill, stand back and wait for 1994 to repeat itself.”

[W]e’ll still have the present healthcare system. Meaning that we’ll have (1) flat-lining wages, (2) exploding Medicaid and Medicare costs and thus immense pressure for future tax increases, (3) small businesses and self-employed individuals priced out of the insurance market, and (4) a lot of uninsured or underinsured people imposing costs on hospitals and local governments.

We’ll have entrenched and perpetuated some of the most irrational features of a hugely costly and under-performing system, at the expense of entrepreneurs and risk-takers, exactly the people the Republican party exists to champion.

That’s essentially the argument Dave Schuler’s been making for months.  And it’s right as far as it goes:  We’re not talking about a free market system that’s functioning superbly and needs only to be saved from the depredations of socialism; large parts of the system are already on the federal budget and the trends are unsustainable.

So, what does Frum propose conservatives do? Well, nothing in that post.  Fortunately, he follows it up with this a rather detailed set of bullet points which he says is “non-exhaustive.”  Allowing the self-insured to buy insurance with untaxed dollars, support for private co-ops, a government rating system, outlawing certain insurance company bad practices, moving away from employer-financed insurance, tort and malpractice reform, and so on.   He then concludes:

We should of course fight against any so-called public option. Direct government provision ought to be the conservative red-line; No deal at all is preferable to a deal that includes a bigger government entry into the insurance business.

Which, ironically, is the Republican position that he’s complaining about!

Reality check:  We have a Democratic president with overwhelming Democratic majorities in the House and the Senate. There is no way — zip, zero, zilch, nada — for Republicans to pass tort reform or any number of other programs that they might prefer.  The time for that was in 2001 when they had the presidency and both Houses of Congress.

All the Republicans can really do is throw sand in the gears and try to prevent creation of a massive new government entitlement program.  If public option becomes reality, not only will it be permanent but it will likely become increasingly less optional.

Tactically, the only way to achieve that is to attack the weakest parts of the Democratic plan so as to put pressure on Democrats in more conservative states and districts to break from the pack and vote against the package.  That’s not done by wonkish talk about fantasy alternatives but rather by making Obamacare the target.

And, lo and behold, it seems to actually be working.

Frum’s approach, by contrast, would make it much more likely that conservatives lose the big fight on public option.  It concedes that what we have now isn’t working and that the government must step in and do something.  Given who’s in charge, that something would not look much like Frum’s list.

Bill Maher has a piece at HuffPo arguing that Americans are a bunch of idiots who should just shut up and let people who know what they’re talking about make decisions on tough issues like health care reform.

[T]ake the health care debate we’re presently having: members of Congress have recessed now so they can go home and “listen to their constituents.” An urge they should resist because their constituents don’t know anything. At a recent town-hall meeting in South Carolina, a man stood up and told his Congressman to “keep your government hands off my Medicare,” which is kind of like driving cross country to protest highways.

I’m the bad guy for saying it’s a stupid country, yet polls show that a majority of Americans cannot name a single branch of government, or explain what the Bill of Rights is. 24% could not name the country America fought in the Revolutionary War. More than two-thirds of Americans don’t know what’s in Roe v. Wade. Two-thirds don’t know what the Food and Drug Administration does. Some of this stuff you should be able to pick up simply by being alive. You know, like the way the Slumdog kid knew about cricket.

Not here. Nearly half of Americans don’t know that states have two senators and more than half can’t name their congressman. And among Republican governors, only 30% got their wife’s name right on the first try.

Sarah Palin says she would never apologize for America. Even though a Gallup poll says 18% of Americans think the sun revolves around the earth. No, they’re not stupid. They’re interplanetary mavericks. A third of Republicans believe Obama is not a citizen, and a third of Democrats believe that George Bush had prior knowledge of the 9/11 attacks, which is an absurd sentence because it contains the words “Bush” and “knowledge.”

People bitch and moan about taxes and spending, but they have no idea what their government spends money on. The average voter thinks foreign aid consumes 24% of our federal budget. It’s actually less than 1%. And don’t even ask about cabinet members: seven in ten think Napolitano is a kind of three-flavored ice cream. And last election, a full one-third of voters forgot why they were in the booth, handed out their pants, and asked, “Do you have these in a relaxed-fit?”

And I haven’t even brought up America’s religious beliefs. But here’s one fun fact you can take away: did you know only about half of Americans are aware that Judaism is an older religion than Christianity? That’s right, half of America looks at books called the Old Testament and the New Testament and cannot figure out which one came first.

And these are the idiots we want to weigh in on the minutia of health care policy? Please, this country is like a college chick after two Long Island Iced Teas: we can be talked into anything, like wars, and we can be talked out of anything, like health care. We should forget town halls, and replace them with study halls. There’s a lot of populist anger directed towards Washington, but you know who concerned citizens should be most angry at? Their fellow citizens. “Inside the beltway” thinking may be wrong, but at least it’s thinking, which is more than you can say for what’s going on outside the beltway.

And if you want to call me an elitist for this, I say thank you. Yes, I want decisions made by an elite group of people who know what they’re talking about. That means Obama budget director Peter Orszag, not Sarah Palin.

This rant is so powerful it’s united Dennis the Peasant (aka Kenton E. Kelly, CPA) and Roger L. Simon!

Kelly snarks, “Just ask any progressive. They love ‘the people’. They want to help ‘the people’. They want equality, fraternity, mutual respective and constructive dialog.”

And the meme’s spreading. Greg Sargent reports that Obama chief of staff Rahm Emanuel says Democrats attacking other Democrats are “f-king stupid.”  And president Obama wants people who disagree with him to shut up.

What’s interesting here is that Maher’s largely right on the facts.  We’ve known for decades that people are wildly ignorant about basic facts.  Some of it’s explainable by getting caught off guard or not quite understanding the question.  But anyone who has taught college freshmen knows that even fairly bright folks can be astonishingly ignorant.

It doesn’t follow, however, that people are too stupid to make judgments on issues. People may not be able to answer the question “Name the branches of the U.S. Government” but they probably know that we have a president, a Congress, and courts and have some vague sense that there are checks and balances.  They may not know how much of our budget is spent on foreign aid but they know that they’d rather spend their money at home.  They know that abortion is legal and controversial even if they don’t know the name of the case that made it so or even understand that the Supreme Court is responsible.

The nature of representative democracy is that the people make judgments on broad policy directions and elect people to govern them accordingly.  The details are left to the elected representatives and, increasingly, to unelected bureaucrats with actual subject matter expertise.

To the extent that the public’s misunderstanding of the issues makes it difficult to make changes that presidents and congressmen think are necessary, it is incumbent on these leaders to explain themselves better.  Obama is a fine orator and gets more television time that “Seinfeld” reruns.   If he can’t persuade people to buy what he’s selling, he might need a new product.

Radley Balko has a new column at Fox on “Washington’s Wealth Boom.”

The new top three [wealthiest counties in America according to per capita income] are now Loudon County, Virginia; Fairfax County, Virginia; and Howard County, Maryland. All three are suburbs or exurbs of Washington, D.C. In 2000, 14 of the 100 richest counties were in the Washington, D.C., area. In 2007, it was nine of the richest 20.

[...]

While the D.C. metro area hasn’t completely escaped the recession, it’s doing much better than most everywhere else. Real estate advisers Grub & Ellis Company recently ranked the D.C. metro area the top market in the country for commercial real estate investment. Investment advisers are high on D.C. area real estate even in down times, because they know the federal government’s only going to get bigger. That means more federal employees, more grantees and contractors, and more wealthy lawyers and lobbyists setting up shop inside the Beltway — both to get a piece of the federal budget (or, more recently, the $7 trillion-and-growing pot of federal bailout honey), and, as the federal regulatory state expands, to lobby for regulations most favorable (or, least unfavorable) for their clients.

The problem is that, save for the tech corridor in D.C.’s Virginia exurbs, the Washington Metro area doesn’t actually produce anything. Washington doesn’t create wealth, it just moves it around — redistributes it. As government grows and takes control of more and more of the private economy — either through spending, regulation, or taxes — more and more wealth that’s created elsewhere comes to Washington to be devoured.

The Washington wealth boom is the result of the massive expansion in government over the last 10 years, which has populated the region with an increase in well-paid federal employees, and wealthy federal contractors and lobbyists.

It’s axiomatic, really, that the more powerful government is in our lives, the more money that there is around the seat of power. The combination of a massive global recession, a multi-trillion dollar federal stimulus, and the impending handover of the executive branch to a Democrat eager to consolidate control of the economy in Washington do not portend a reversal of this trend any time soon.

While neither Radley nor I are directly involved in government service (disclosure: I was once a federal contractor and was a federal employee as an Army officer)  we’re part of the Washington economy as well, studying and commenting on public policy for a living.  It’s worth noting, too, that the figures are somewhat skewed by the high cost of living in the area, which artificially raises “income” while not necessarily improving living standards.

A new Rasmussen poll finds that voters trust John McCain more than Barack Obama on taxes (47%to 45%) and on “economic issues” more generally (48% to 47%).  These numbers are, of course, within the margin of error.  They do, however, represent a reversal of a trend and may indicate that the “Joe the Plumber” and “spreading the wealth around” message is resonating.

This, in a survey that has Obama leading in the national head-to-head 50-47, also within the margin of error, but leading in enough tossup states for an Electoral College blowout.  Moreover, the same poll’s toplines show the candidates are tied on the War in Iraq, Immigration, and Social Security.  McCain has large lead only on Abortion, while Obama has large leads on Environmental Issues, Balancing the Federal Budget, Negotiating Trade Agreements, Healthcare and Education.

Granting that this is just one snapshot, the numbers don’t make much sense.  Either the economy is much less decisive as an issue that we’ve been led to believe, health care and education have much more, or the election is being decided on personality or some other non-issue basis.

I wrote a quick post before bed last night giving my off-the-cuff reaction to Barack Obama’s nomination acceptance speech, arguing that, despite all the talk of “change,” it was basically a speech that Jimmy Carter, Walter Mondale, Michael Dukakis, Bill Clinton, Al Gore, or John Kerry could have given.

The NYT has a six-page transcript of the speech as delivered.  Let’s skip the biography and gotcha attack lines and go through the policy pronouncements.  These are problems for which he’s blamed George W. Bush and has promised to fix if elected president.

[M]ore Americans are out of work and more are working harder for less. More of you have lost your homes and even more are watching your home values plummet. More of you have cars you can’t afford to drive, credit cards, bills you can’t afford to pay, and tuition that’s beyond your reach.

Exactly zero of these are within the power of the president to fix. Seriously, what does he propose to do about housing prices reaching equilibrium and people borrowing to live lifestyles they can’t afford?

We’re a better country than one where a man in Indiana has to pack up the equipment that he’s worked on for 20 years and watch as it’s shipped off to China, and then chokes up as he explains how he felt like a failure when he went home to tell his family the news.

So, we’re going to ban trade with China? Ban American companies from participating in the global marketplace? Radically raise the cost that 300 million Americans pay for consumer goods to keep a relative handful of people employed in sectors where First World nations have lost their comparative advantage?

We are more compassionate than a government that lets veterans sleep on our streets and families slide into poverty…

So, we’re going to return to locking up drug addicts and people with non-dangerous mental disorders? We’re going to guarantee everyone a minimum income?

We measure the strength of our economy not by the number of billionaires we have or the profits of the Fortune 500, but by whether someone with a good idea can take a risk and start a new business, or whether the waitress who lives on tips can take a day off and look after a sick kid without losing her job, an economy that honors the dignity of work.

Don’t people start new businesses every day in this country? And isn’t his party the one that wants to erect regulatory barriers making it harder to start new businesses? For that matter, don’t waitresses get days off already? I’m pretty sure they do.

Implicit in this sentence, though, are the inherent contradictions in Democratic domestic policy. The more mandates we put on small businesses, the harder it is for them to succeed. Sure, it would be great if even unskilled labor got terrific benefits, including paid family leave. But somebody’s got to pay for that. If it’s the customer, it makes the product or service less attractive. If it’s coming out of the owner’s pocket, it makes hiring employees less attractive. If it’s the government, it takes money out of everyone’s pocket — including those with dreams of starting their own business. Including the very waitress who we’re trying to help. Whose salary, incidentally, will naturally go down as a result of the policy — if she’s hired to begin with.

Ours — ours is a promise that says government cannot solve all our problems, but what it should do is that which we cannot do for ourselves: protect us from harm and provide every child a decent education; keep our water clean and our toys safe; invest in new schools, and new roads, and science, and technology.

Now this is terrific line. It starts off appealing to conservatives and moderates and then promises a chicken in every pot. Who can be opposed to these things, after all? Why, mean old out-of-touch people like John McCain, that’s who!

But how does this translate into policy?

Protect us from harm. Keeping foreign enemies from attacking us and domestic criminals from terrorizing the innocent is the fundamental purpose of government, one could argue. But we’ve been trying to do these things since Day 1. One suspects, though, he’s defining “harm” much more broadly.

Decent education for all. I’m for it. But isn’t that a local responsibility? The federal government doesn’t run too many schools, after all, aside from those on military bases and diplomatic outposts. And what does “decent” mean, exactly?

Are we going to have government only do “that which we cannot do for ourselves”? Or is it going to invest in science and technology?

Change means a tax code that doesn’t reward the lobbyists who wrote it, but the American workers and small businesses who deserve it.

Don’t workers and small businesses have lobbyists? And why is government in the business of deciding who “deserves” to keep the money they earned?

I will stop giving tax breaks to companies that ship jobs overseas, and I will start giving them to companies that create good jobs right here in America.

They’re the same companies!

I will — listen now — I will cut taxes — cut taxes — for 95 percent of all working families, because, in an economy like this, the last thing we should do is raise taxes on the middle class.

This is another great line. It sounds very New Democrat. But, really, it’s the same old class warfare: We’re going to cut taxes for most people — even though we’ve just listed trillions in new spending programs — while raising them on those already paying the largest burden. But, hey, 19 out of 20 people will like it! Democracy! As Dave Schuler likes to say, “When you rob Peter to pay Paul, you can always count on the support of Paul.”

And for the sake of our economy, our security, and the future of our planet, I will set a clear goal as president: In 10 years, we will finally end our dependence on oil from the Middle East.

We will do this. Washington — Washington has been talking about our oil addiction for the last 30 years. And, by the way, John McCain has been there for 26 of them.

And Joe Biden 35 of them, by the way.

This is sheer fantasy. Of late, it’s become a bipartisan one, since even President Bush has spouted similar platitudes. It’s simply not going to happen.

And I’ll invest $150 billion over the next decade in affordable, renewable sources of energy — wind power, and solar power, and the next generation of biofuels — an investment that will lead to new industries and 5 million new jobs that pay well and can’t be outsourced.

Man, if $150 billion would do this Exxon would already be doing it.

I’ll recruit an army of new teachers, and pay them higher salaries, and give them more support. And in exchange, I’ll ask for higher standards and more accountability.

I suppose they’ll work side-by-side with the 100,000 new policemen Bill Clinton put on the beat.

Teachers are hired, trained, and supervised at the state and local level. Even if we federalize them, how is it that we’re going to attract better caliber people to do a job that’s often thankless and repetitive? Simply by paying them more? And what are these “higher standards”? Test scores? Democrats don’t like that measure. No Child Left Behind, Part Deux.

Granted, Clinton and others have made this promise and it’s almost certainly rhetoric that won’t translate into policy. If it did, though, we’re likely to see the repeat of federalizing airport security screeners: The same people doing the job as before but making more money and even harder to fire for poor performance.

And we will keep our promise to every young American: If you commit to serving your community or our country, we will make sure you can afford a college education.

What does this mean, exactly? If, say, you work in a soup kitchen a couple hours a week, we’ll send you to Harvard?

If you have health care — if you have health care, my plan will lower your premiums. If you don’t, you’ll be able to get the same kind of coverage that members of Congress give themselves.

So, if I don’t have a job, I get the same coverage we provide for 535 elites making executive salaries? Groovy. No scaling problems there.

I will make certain those companies stop discriminating against those who are sick and need care the most.

I think we have different definitions of “insurance.”

Now is the time to help families with paid sick days and better family leave, because nobody in America should have to choose between keeping their job and caring for a sick child or an ailing parent.

See our earlier discussion on this. Look, I’m for this. That’s a situation I’ve never been in and would dearly hate to be in. But who’s going to pay for it? A small business owner with, say, five employees almost certainly can’t afford to pay one of them for an extended period while not reaping the benefits of their work. Nor, realistically, can he afford to pay a temp to come in and do that work while paying the person he’s replacing. Large companies can probably absorb this sort of thing more easily — and many in fact do so — but, then again, large companies have more employees and therefore a greater likelihood of having to pay this out.

Or is this going to be some sort of government insurance program? If so, are we going to pay everyone on a capped basis, as with unemployment insurance? Or are we going to pay, say, an executive with a sick kid $20,000 a month while she’s out? What if her company sends good American jobs to China?

And now is the time to keep the promise of equal pay for an equal day’s work, because I want my daughters to have the exact same opportunities as your sons.

Dude, the 1970s are over.

Obama’s a bright guy. He anticipated these objections and dealt with them squarely:

Now, many of these plans will cost money, which is why I’ve laid out how I’ll pay for every dime: by closing corporate loopholes and tax havens that don’t help America grow.

But I will also go through the federal budget line by line, eliminating programs that no longer work and making the ones we do need work better and cost less, because we cannot meet 21st-century challenges with a 20th-century bureaucracy.

Clearly, the man has seen “Dave.”

I mean, seriously, we’re going to pay for all this by closing loopholes?! We quite literally couldn’t pay for it if we closed the entire federal government excepting the Defense Department and the Social Security Administration.

Yes, government must lead on energy independence, but each of us must do our part to make our homes and businesses more efficient.

The cameras didn’t show Jimmy Carter but I’m sure he was smiling. And wearing a sweater. While turning his thermostat down to 72.

[W]e must also admit that programs alone can’t replace parents, that government can’t turn off the television and make a child do her homework, that fathers must take more responsibility to provide love and guidance to their children.

Agreed. One small problem: They ain’t gonna.

Turning to foreign policy, the speech was actually much stronger there. I actually agreed with much of it, including some of the contrasts he drew with Bush and McCain. Two exceptions:

You know, John McCain likes to say that he’ll follow bin Laden to the gates of Hell, but he won’t even follow him to the cave where he lives.

We have no clue as to which cave bin Laden lives. Or if he lives in a cave. Or he’s still alive.

Do we seriously believe that, if he could, Bush wouldn’t be killing or capturing bin Laden? His approval ratings would jump 25 points.

We are the party of Roosevelt. We are the party of Kennedy. So don’t tell me that Democrats won’t defend this country. Don’t tell me that Democrats won’t keep us safe.

I agree with the underlying premise here: Of course Democrats want to keep the country safe and, goodness knows, Democrats aren’t any more reluctant to send troops into harm’s way than Republicans. One probably doesn’t want to invoke JFK here, though. Bay of Pigs. Taking us much closer to the brink of nuclear holocaust than we’ve ever been. Vietnam.

Look, I realize that I’m not the target audience here and that convention speeches are often full of platitudes and sops to the base.  My guess is that John McCain’s will be, too — and we’ll criticize that, too.   But don’t base your entire campaign on “CHANGE” and give me warmed over ideas from the Carter administration.

Obama Photo: Linda Davidson/The Washington Post. Magic pony  via Adam Stein.

This just in: Politicians promise lots of things they won’t be able to deliver if they get elected.

Yesterday, we had the hilarity of John McCain’s promise to balance the budget in four years without raising taxes or cutting anything but “wasteful” spending. Today, we’ve got an analysis from the Los Angeles Times showing that Barack Obama is promising things we can’t afford and almost certainly won’t make it through Congress.

The total price tag of Obama’s plans, according to his campaign, is $130 billion a year. On top of that, Obama is proposing a middle-class tax cut of about $80 billion a year.

Leon Panetta, former chief of staff for Bill Clinton, says this is all par for the course.

“I accept that all candidates throw out a lot of proposals when they’re campaigning,” Panetta said in an interview. “You have to assume that’s all part of a campaign strategy to appeal to a lot of different constituencies that are out there. But once he enters the Oval Office, he’s going to have to make some hard decisions.”

Or not. The preferred solution in recent decades has been to simply spend the money and borrow the difference. I’m skeptical, given the incentives, that this will change come January.

John McCain is promising to balance the budget in his first term:

Sen. John McCain (R-Ariz.) plans to promise on Monday that he will balance the federal budget by the end of his first term by curbing wasteful spending and overhauling entitlement programs, including Social Security, his advisers told Politico.

[...]

“In the long-term, the only way to keep the budget balanced is successful reform of the large spending pressures in Social Security, Medicare, and Medicaid,” the McCain campaign says in a policy paper to be released Monday. “The McCain administration would reserve all savings from victory in the Iraq and Afghanistan operations in the fight against Islamic extremists for reducing the deficit. Since all their costs were financed with deficit spending, all their savings must go to deficit reduction.”

Considering that the current deficit is in the neighborhood of $410 billion, it’s going to be a neat trick, indeed, to eliminate it through the elimination of “wasteful” spending.   Then again, the Bush White House lists among the highlights of the 2009 budget the fact that it “Balances the budget by 2012.”  Indeed,  OMB projects a $48 billion surplus.

It’s noteworthy that the 2009 request is $987.6 billion, an increase of $46.2 billion (4.9 percent) from the previous year.  And that’s not counting $75.8 billion in “Supplemental and Emergency Funding” (down from $104.4 billion).  Balancing the budget, then, would require finding waste and reforms that would shave the budget by a quarter.

Social Security, incidentally, is only $8.4 billion.[*] The entire Health and Human Services budget?  $70.4 billion.  Housing and Urban Development?  Another $38.5 billion.   Environmental Protection is $7.1 billion.  Interior, $10.6 billion.  (Those are FY 2009 requests; the appropriations will differ somewhat.)  So, let’s say we reform those to run with such efficiency that they are totally self-sustaining.   That’s $135 billion in savings.  Only another $275 billion and we’re home free!  Education is another $59.2 billion.   Labor, $10.5.  National Science Foundation, $6.9 billion.  And “Other Agencies” — how important could they be, really, if they don’t get mentioned by name? — are $7.2 billion.    That’s another $83.8 billion, getting our deficit down to $191.2 billion.   If we can achieve victory in Iraq and Afghanistan by, say, the one year anniversary of McCain’s inauguration, we can save that, easy.

Now, the economy is kind of soft right now.  If McCain can come in and give it the kick in the pants it needs, we’ll start bringing in more revenue.  So, maybe, we can save a few of those programs above.

UPDATE:  Matt Yglesias suggests that “magic ponies” might somehow be involved.  I hadn’t factored that into the above calculations.

*UPDATE: As Dave Schuler notes in the comments, this represents only the general fund fraction of the Social Security Administration’s budget. The total expenditures of SSA are a staggering $695.9 billion. But, since that’s “off budget,” it doesn’t count toward the deficit.

UPDATE: Hilzoy says the budget calculations are even more complicated than my figures above suggest.

The latest report issued by the Medicare Trustees is not good.

The HI annual cost rate is projected to increase from 3.11 percent of taxable payroll in 2007 to 11.40 percent in 2082—8.02 percent of taxable payroll more than the projected income rate for 2082. Expressed in relation to the projected Gross Domestic Product (GDP), HI cost is estimated to rise from the current level of 1.5 percent of GDP to 4.8 percent in 2082.

[...]

The financial outlook for the Medicare program continues to raise serious concerns, and a “Medicare funding warning” is triggered again by the findings of this report. Total Medicare expenditures were $432 billion in 2007 and are expected to increase in future years at a faster pace than either workers’ earnings or the economy overall. As a percentage of GDP, expenditures are projected to increase from 3.2 percent in 2007 to 10.8 percent by 2082 (based on our intermediate set of assumptions). Growth of this magnitude, if realized, would substantially increase the strain on the nation’s workers, Medicare beneficiaries, and the Federal Budget.

[...]

HI tax income and other dedicated revenues are expected to fall short of HI expenditures in 2008 and all future years. The HI trust fund does not meet our short-range test of financial adequacy, and fund assets are projected to be exhausted in 2019.

So, in 11 years the Medicare Fund assets will be exhausted. And yet the solution to this problem is to expand government programs for health care and as a result increase demand for health care resources…which will some how work some sort of magic and make everything cheaper.

In the long range, projected expenditures and scheduled tax income are substantially out of balance, and the trust fund does not meet our test of long-range close actuarial balance. Currently, this imbalance is relatively small, with dedicated revenues estimated to cover 94 percent of costs in 2008, but it will grow rapidly in the absence of changes to current law: taxes would cover 78 percent of estimated costs in 2019, and only 30 percent at the end of the long-range period. Closing deficits of this magnitude will require very substantial increases in tax revenues and/or reductions in expenditures.

In other words, the party is about over and either taxes have to go up, expenditures have to be curtailed or both. The idea that we can have more health care (i.e. universal coverage at current levels of care)¹ and lower costs is simply not an option. Anybody who says otherwise is either a liar or an idiot.

As noted previously, over the full 75-year period, the fund has a projected present value unfunded obligation of $12.4 trillion. This unfunded obligation indicates that if $12.4 trillion were added to the trust fund at the beginning of 2008, the program could meet the projected cost of current-law expenditures over the next 75 years.

Oh no problem there, our current GDP is….$14.185 trillion, we’ll simply move over an entire years worth of GDP to Medicare and there we go problem solved.
_____
¹I imagine some might not quite understand this point, I’m saying that sure we can have universal care, but that that care will have to decrease in quality if you are not to spend more money. You can’t get better care at a cheaper cost.

Jason Campbell, Michael O’Hanlon and Amy Unikewicz say that Brookings has come up with some metrics to measure political progress in Iraq and that, contrary to conventional wisdom, there actually has been some.

The most intriguing area of late is the sphere of politics. To track progress, we have established “Brookings benchmarks” — a set of goals on the political front similar to the broader benchmarks set for Baghdad by Congress last year. Our 11 benchmarks include establishing provincial election laws, reaching an oil-revenue sharing accord, enacting pension and amnesty laws, passing annual federal budgets, hiring Sunni volunteers into the security forces, holding a fair referendum on the disputed northern oil city of Kirkuk, and purging extremists from government ministries and security forces.

At the moment, we give the Iraqis a score of 5 out of 11 (our system allows a score of 0, 0.5, or 1 for each category, and is dynamic, meaning we can subtract points for backsliding). It is far too soon to predict that Iraq is headed for stability or sectarian reconciliation. But it is also clear that those who assert that its politics are totally broken have not kept up with the news.

Laura Rosen and Matt Yglesias reasonably enough, would like to see the actual metrics and know how they were calculated.

So, I checked the Brookings website and in less than a minute found the Brookings’ Iraq Index page which links the most recent edition (March 3rd) in PDF format. Essentially, it just gives the in depth numbers behind the “clipboard” included with the NYT op-ed. It’s 62 pages and I haven’t had time to do more than skim it but it looks to be a fairly impressive collection of data.

Whether these indicators are the best for assessing political progress, let alone whether the trends are anomalies and sustainable, is debatable. But there is indeed an “Index” that’s publicly available to those who want to make such assessments.

UPDATE: I attended a luncheon hosted by Steve Coll and Steve Clemons of the New American Foundation bringing together some representatives of the “Wonkosphere.” Two of the participants, Spencer Ackerman and Ezra Klein, have some interesting insights on the piece. (Yglesias, linked previously, was also in attendance.)

Spencer says, “O’Hanlon isn’t just moving the goal posts, he’s building a whole new playing field.” Moreover, there’s a larger issue:

O’Hanlon isn’t calling his new measurements O’Hanlon Benchmarks. He’s calling them Brookings Benchmarks. The whole institution, which contains real scholars, has been sucked into this morass. What does Strobe Talbott, Brookings’ president and Bill Clinton’s deputy secretary of state, think about this? Do the undefined Brookings Benchmarks represent responsible scholarship?

Ezra adds that,

[T]he New York Times shouldn’t simply be reprinting O’Hanlon’s “benchmarks” without giving readers some way to evaluate whether they’re worth listening to. O’Hanlon, after all, is anything but an objective source. He’s a media beast who’s currently fighting a war over his reputation, a war started when the army gave him a guided, planned tour demonstrating their “progress” in Iraq, and he wrote a puff piece on it. Now he desperately needs to advance a narrative of progress if he’s not going to be laughed out of every foreign policy room forevermore. If the Times wants a set of Iraq benchmarks, they should convene a panel of independent experts, or develop one themselves. Letting O’Hanlon grade the conflict is rather like letting Scott Templeton fact check his own work.

The general topic of O’Hanlon, the legitimacy conferred by institutions such as Brookings and the NYT consumed much of the luncheon conversation. It’s an interesting topic that I expect will be revisited here and elsewhere.

Mark Tapscott provides an extensive report of a Congressional Research Service finding that President Bush could, by mere executive order, stop all earmark spending directed by committee report rather than actual legislation. It turns out that this is the vast majority of all pork barrel spending.

Of course, no evidence whatsoever has been provided in the last seven years that Bush has any particular objection to wasteful spending. Furthermore, if he suddenly developed an interest in fiscal responsibility the victory would be short-lived; Congress would simply go back to including their earmarks in impossible-to-veto legislation.

There’s some value, I suppose, in at least forcing the legislature to overspend in the manner required by the Constitution. But the problem isn’t wily politicians but rather constituents who want low taxes and low spending — except for spending which benefits them in some obvious way.

Given our institutional arrangements, where spending is controlled by a bicameral legislature consisting of 535 geographically allocated representatives, a huge federal budget will inevitably create carve-outs, logrolling, horse-trading, pork barreling, and all manner of other inefficiencies. It’s both a feature and a bug.

While shining the spotlight on these practices might stop some of the most egregious abuses — bridges to nowhere and so forth — closing the “favor factory” will require a change in mindset. Unfortunately, the demand for government programs is, by all indications, rising.

Kevin Drum, taking as a given that most of us are perfectly satisfied with our current health coverage but scared of losing it, offers an interesting solution:

[E]xpand Medicare (or create a similar program) to cover every person in America under the age of 21. And then let them keep it as they grow older. In ten years everyone under 31 would be covered. By 2050 at the latest the whole country would be covered — and probably earlier than that once the program reaches a critical mass. Taxes would rise slowly to cover each new cohort, employer healthcare would gradually go away, union contracts would have decades to adjust, and no one would have to give up anything they have now.

This is just watercooler conversation. I’ve given it no serious thought at all. But why not?

Mostly, because it largely ignores the costs issue.

To be sure, insuring young people is relatively inexpensive, since they aren’t large consumers of medical care. And people in their 20s make up a significant chunk of the uninsured, too, so it would plug a significant hole in the current system.

But the major problem with the current system isn’t “lack of insurance” so much as ridiculously high health care costs owing to high doctor fees, overuse of incredibly expensive tests and procedures to cope with tort liability issues, and other issues. This would do nothing to address that — and would presumably delay the sense of urgency to do so — while increasing the number of people on the public entitlement rolls.

Update (Steve Verdon): The biggest financial problem facing this country from a fiscal perspective is Medicare. Medicare is going to run out of money well before 2050 and things are going to start looking pretty grim in ten years.

According to the CBO in 2050 Medicare and Medicaid will account for 20% of GDP. That is, one out of every five dollars the economy produces will go just to Medicare and Medicaid. Or think of it this way, the entire federal budget will be only for Medicare and Medicaid, all other spending will have been crowded assuming that the federal budget is no more than 20% of GDP. That means no more defense spending, no more environmental spending, no more monuments, Library of Congress, Commerce Department, Labor Department, FERC, FDA, FCC, or Department of Education. If we keep these things and at a share equivalent to what we have today that means government spending will account for 40% of GDP. Add in state and local governments and the government will basically be well over 50% of the economy. And all this is without expanding demand.

So while James’ point that insuring the young is relatively cheap, when you increase demand and supply doesn’t shift, you get an increase in price. So Kevin’s idea will only hasten the point at which things will get bad. Further, Medicare doesn’t worry about things like risk. Why should it? After all it has the entire tax base upon which to depend on for funds. If you want a health care system that is really screwed up like nothing we’ve every seen, then Kevin’s idea is for you.