Category Archives: Budget

Stupid, Greedy, and/or Delusional

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Yesterday the House and Senate passed budget bills with no Republican votes whatsoever. Yet even without the GOP the bill passed the House with the biggest majority for a budget in 12 years. Carl Hulse writes for the New York Times,

Democrats said the two budgets, which will have to be reconciled after a two-week Congressional recess, cleared the way for health care, energy and education overhauls pushed by the new president. The Democrats said the budgets reversed what they portrayed as the failed economic approach of the Bush administration and Republican-led Congresses.

Of course, spending on health care, energy, education and other long-neglected matters is vital to any meaningful economic recovery. So what did the GOP offer? Tax cuts for the rich and a domestic spending freeze — during a recession, mind you –which is so breathtakingly wrongheaded one can only assume most congressional Republicans are either extremely stupid or extremely delusional. Or both.

I considered a third alternative, that they are extremely invested in protecting the wealth of the wealthy and don’t care if the rest of the nation turns into a third-world sinkhole. However, I think anyone who doesn’t understand even the wealthy eventually would suffer if the nation turns into a third-world sinkhole is either stupid or delusional.

The passage of the budget is particularly good news because all segments of the House Dems supported it, including many of the Blue Dogs. On the other hand, 38 Republicans voted against the GOP Clown Alternative.

Two Senate Dems voted against the budget — Ben Nelson of Nebraska and Evan Bayh of Indiana. Steve Benen: “Yes, Bayh is the new Lieberman.”

This CNN story has more details on the budget; see also Media Matters. Also note that in many ways passing the budget was the easy part. Crafting the health care, education, energy, etc. programs will be a fight. But maybe the Dems are learning they can, you know, do stuff without worrying about what the GOP thinks.

Which brings me to today’s David (“If I only had a brain”) Brooks column, titled “Greed and Stupidity.” Brooks writes that there are two competing explanations to the crash of the financial sector, which he calls “the greed narrative” and “the stupidity narrative.”

The greed narrative, he says, is explained in Simon Johnson’s Atlantic article “The Quiet Coup,” which many of us read this week. Brooks encapsulates Johnson’s article pretty well. “The U.S. economy got finance-heavy and finance-mad, and finally collapsed,” Brooks writes. (See also Thomas Geoghegan’s “Infinite Debt,” which you really can read online here.)

But then Brooks says, nah, that can’t be right. It’s more likely the captains of finance were just stupid.

The second and, to me, more persuasive theory revolves around ignorance and uncertainty. The primary problem is not the greed of a giant oligarchy. It’s that overconfident bankers didn’t know what they were doing. They thought they had these sophisticated tools to reduce risk. But when big events — like the rise of China — fundamentally altered the world economy, their tools were worse than useless.

Yes, Mr. Brooks, and what made them “overconfident” and “stupid”? To me, it’s obvious much of their hubris came from the fact that they had become such a force of power — a true oligarchy, as Simon Johnson says — that they felt untouchable. And much of the “stupid” was a by-product of greed. They didn’t see how fallible they really were because they didn’t want to see it.

Brooks likes the “stupid” narrative because, he thinks, the stupid problem doesn’t require a big-government regulatory solution, whereas the “greed” problem does. “Instead of rushing off to nationalize the banks, we should nurture and recapitalize what’s left of functioning markets,” he says. “To my mind, we didn’t get into this crisis because inbred oligarchs grabbed power. We got into it because arrogant traders around the world were playing a high-stakes game they didn’t understand.”

Brooks fails to explain why those causes are mutually exclusive. I say they’re both true.

Update: Reuters on unemployment:

The U.S. unemployment rate soared to 8.5 percent in March, the highest since 1983, as employers slashed 663,000 jobs and cut workers’ hours to the lowest on record, government data showed on Friday.

In a report underscoring the distress in the labor market, the Labor Department also revised its data for January to show job losses of 741,000 that month, the biggest decline since October 1949.

Yes, a domestic spending freeze is just what we need right now. And we can see how much Bush’s tax cuts for the wealthy “trickled down.”

The De-Reaganization of America

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Paul Krugman is almost giddy about the Obama Administration’s first budget. Money for healthcare reform! Money for climate change! Woo-HOO!

And these new priorities are laid out in a document whose clarity and plausibility seem almost incredible to those of us who grew accustomed to reading Bush-era budgets, which insulted our intelligence on every page. This is budgeting we can believe in.

For a review of some of the atrocities of Bush Administration budgeting, see “Bust This Budget,” February 2008.

And get this:

Many will ask whether Mr. Obama can actually pull off the deficit reduction he promises. Can he actually reduce the red ink from $1.75 trillion this year to less than a third as much in 2013? Yes, he can.

A New York Times headline, “A Bold Plan Sweeps Away Reagan Ideas.” David Leonhardt writes,

The budget that President Obama proposed on Thursday is nothing less than an attempt to end a three-decade era of economic policy dominated by the ideas of Ronald Reagan and his supporters.

The Obama budget — a bold, even radical departure from recent history, wrapped in bureaucratic formality and statistical tables — would sharply raise taxes on the rich, beyond where Bill Clinton had raised them. It would reduce taxes for everyone else, to a lower point than they were under either Mr. Clinton or George W. Bush. And it would lay the groundwork for sweeping changes in health care and education, among other areas.

More than anything else, the proposals seek to reverse the rapid increase in economic inequality over the last 30 years. They do so first by rewriting the tax code and, over the longer term, by trying to solve some big causes of the middle-class income slowdown, like high medical costs and slowing educational gains.

Headline in the Los Angeles Times: “Obama’s budget is the end of an era.”

Reporting from Washington — Not since Lyndon B. Johnson and Franklin D. Roosevelt has a president moved to expand the role of government so much on so many fronts — and with such a demanding sense of urgency. …

… Even more stark than the breadth and scale of Obama’s proposals was his determination to break with the conservative principles that have dominated national politics and policymaking since Ronald Reagan’s election as president in 1980.

Mike Madden writes in Salon,

The 142-page proposal laid out a sweeping, ambitious agenda for the future: Obama would raise taxes on the wealthy to pay for healthcare for the uninsured; cap pollution emissions; put billions more dollars into infrastructure and new technology, building on the money in the massive economic stimulus program Obama already pushed through Congress; invest in new education programs; and roll back the U.S. troop presence in Iraq and, more slowly, Afghanistan. There were proposals to save money by modernizing the healthcare system, only paying for treatments that are proven to work, and by eliminating federal farm subsidies to the biggest and wealthiest recipients, mostly agribusiness interests. This is not, in other words, George W. Bush’s budget.

Congress — pass it, and let’s get on with healing our country.

Bust This Budget

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Nearly lost amidst Super Tuesday hoopla is The Final Bush Budget, released yesterday. Like most Bush budgets, this one is a work of alternative fiction. But if the reviews are any indication, the Bushies have outdone themselves this year.

The New York Times:

President Bush’s 2009 budget is a grim guided tour through his misplaced priorities, failed fiscal policies and the disastrous legacy that he will leave for the next president. And even that requires you to accept the White House’s optimistic accounting, which seven years of experience tells us would be foolish in the extreme. …

… The president claimed on Monday that his plan would put the country on the path to balancing the budget by 2012. That is nonsense. His own proposal projects a $410 billion deficit for 2008 and a $407 billion deficit next year. Even more disingenuous, Mr. Bush’s projection for a balanced budget in 2012 assumes only partial funding for the wars in Iraq and Afghanistan for 2009, and no such spending — zero — starting in 2010.

It also assumes that there will be no long-running relief from the alternative minimum tax — which would be ruinous for the middle class — and that there will be deep cuts in Medicare and other health care spending that have proved to be politically impossible to enact.

Here are some highlights, courtesy of Senate Democrats:

  • The Bush Budget Would Cut Funding to Help Poor Families Heat Their Homes.
  • The Bush Budget Would Slash Job Training Funding.
  • The Bush Budget Would Cut Medicare and Medicaid by Almost $200 Billion Over Five Years.
  • The Bush Budget Would Cut Funding for Teaching Hospitals and Freeze Funding for Medical Research.
  • The Bush Budget Would Eliminate the Perkins Loan Program and Recall $1.1 Billion in Student Loans.
  • The Bush Budget Would Terminate Grants for College Students with Exceptional Financial Need.
  • The Bush Budget Would Slash Local Law Enforcement Programs.
  • The Bush Budget Would Cut Homeland Security Grants to State and Local Governments by $1 Billion.

    • Bushies also want the Defense Department to jack up the co-pays veterans owe for medical care, and the wars in Iraq and Afghanistan are still off-budget.

    However, what’s on budget is stunning. The Boston Globe:

    Defense spending would approach $515.4 billion, the highest amount, adjusted for inflation, since World War II. That’s still a smaller percentage of the gross domestic product than was the case in the 1950s and 1960s, but it’s an extraordinary amount when the chief threat isn’t the Red Army but terrorists wielding improvised explosive devices and suicide vests. And the budget understates the amount needed to sustain US forces fighting in Iraq and Afghanistan. Bush, when he leaves office, will be the first president to leave two unfinished wars to his successor.

    Ah, but Fred Kaplan says,

    It’s time for our annual game: How much is really in the U.S. military budget?

    As usual, it’s about $200 billion more than most news stories are reporting. For the proposed fiscal year 2009 budget, which President Bush released today, the real size is not, as many news stories have reported, $515.4 billion—itself a staggering sum—but, rather, $713.1 billion.

    Before deconstructing this budget, let us consider just how massive it is. Even the smaller figure of $515.4 billion—which does not include money for fighting the wars in Iraq and Afghanistan—is roughly equal to the total military budgets of all the rest of the world’s nations combined. It is (adjusting for inflation) larger than any U.S. military budget since World War II.

    But this is simply the Pentagon’s share of the military budget (again, that part of it not related to war costs). Since most reporters writing about this are Pentagon reporters, that’s the part of the budget that they consider their turf.

    Kaplan writes that when you add in “defense-related activities” — which does not include Homeland Security, mind you — and the various off-budget war supplements either on the table or anticipated; and stuff like weapons systems, ships, missile defense, and military technology research, which for some reason are not in the Pentagon budget, then you’re talking about real money.

    Isaiah J. Poole writes at Campaign for America’s Future —

    Critics say that the real story is that military spending as a percentage of the country’s gross domestic product — about 4 percent — is actually at historic lows. Defense Secretary Robert M. Gates and Joint Chiefs of Staff Chairman Adm. Mike Mullen is making the 4 percent figure a threshold. “I really do believe this 4 percent floor is important,” Admiral Mullen is quoted by The New York Times as saying. “It’s really important, given the world we’re living in, given the threats that we see out there, the risks that are, in fact, global, not just in the Middle East.”

    But why 4 percent, when the world average is 2 percent, according to the CIA Factbook, and the 27 countries that spend more than 4 percent of their GDP on defense, aside from China at 4.3 percent, are either small countries, heavy oil exporters or, as in the case of Oman and Qatar, both?

    As it turns out, the 4 percent figure was pulled out of the posterior of The Heritage Foundation, which doesn’t explain why 4 percent is the magic number, either. (Perhaps it’s only because “Four Percent for Freedom,” like so much conservative nonsense, nonetheless makes for a crisp, alliterative bumper sticker.) What The Heritage Foundation does say in one of its “Four Percent for Freedom” papers, though, is that “projected growth in entitlement expenditures will jeopardize the nation’s ability to wage war over the long term. This harsh fact makes entitlement reform a national security issue.” [emphasis added]

    Get that? The wingnuts fear that if we actually invest money in our domestic needs, it will hamper our ability to wage war.

    The most pathetic part of this pathetic mess is not just that President Frat Boy has wrecked the nation’s finances. He’s also setting up a huge fight over taxes and priorities for his successor. Like the spoiled brat he is, he expects others to clean up his messes. I don’t expect to live long enough to see this mess cleaned up.

    Nice While It Lasted

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    Tim Watkin posts at The Guardian web site:

    America is out of touch and behind the times on climate change and economic reform. It is mired in a stagnant war that the rest of the west has abandoned or is abandoning. American global influence is in decline, the country having lost the respect of allies and the credibility to lead. As we’ve seen yet again in last week’s brinkmanship by Turkey, American diplomacy has all the vim and vigour of Fred Thompson. For now America remains the world leader, but it’s moving steadily from superpower to first among equals. Nowhere is this more evident than in the sciences. …

    … Overseas institutions and companies are increasingly competitive, and federal and state funding for science and engineering has fallen significantly, to just 0.8% of GDP. The wars in Iraq and Afghanistan are sucking up federal money, with President Bush last week asking Congress to raise the war budget for 2008 to $196bn. That’s quite an opportunity cost.

    As Tom Friedman put it in his New York Times column on Iraq recently: “Can we pay for it and be making the investments in infrastructure, science and education needed to propel our country into the 21st century?” The answer, judging from speakers at the TechNet summit at Berkeley earlier this month, is no.

    Watkin cites a report titled “Rising Above the Gathering Storm: Energizing and Employing America for a Brighter Economic Future,” which was authored by The Committee on Science, Engineering, and Public Policy (COSEPUP), a joint unit of the National Academy of Sciences, National Academy of Engineering, and the Institute of Medicine.

    It’s hard to ignore the scientists and business leaders who wrote the Gathering Storm report when they write, bluntly: “We are worried about the future prosperity of the United States.” As the US slides, other countries are catching up too rapidly. I think Americans will look back at the second half of the 20th century as the pinnacle of American power and influence.

    The comments to this post are almost more alarming than the post. A number of American wingnuts responded, claiming that Chinese engineers can’t be compared to American engineers because Asians have no creativity, and hey, we landed on the moon.

    We’re doomed.

    The notion that America and Americans are intrinsically superior is so deeply ingrained on the Right that no amount of empirical evidence to the contrary is likely to flush it out. Also, American conservatives by nature will ignore and deny an impending problem until it bites their butts, and then they blame Democrats for not solving it.

    You’ve probably had this experience yourselves — mention the mere possibility that the U.S. could be less economically dominant at some point in the future, and if there’s a wingnut present he will laugh at you. Nope, not possible, he says. The way things have been in my lifetime is the way they will always be, forever and ever, amen.

    American economic dominance grew out of several factors. The United States was one of the few large industrial nations to emerge from World War II without massive war damage and with its manufacturing base intact and productive, for example. Mortgage subsidies helped the new married couples of the Greatest Generation to purchase homes, and the GI bill sent a large part of the population to college, and in turn those college graduates started businesses, developed new technologies, created new products. America dominated the second half of the 20th century partly by circumstance of war and geography and partly because we invested in ourselves.

    These days college is prohibitively expensive. Our manufacturing base is moving overseas, and the current POTUS seems to think this is a good thing. A major American city suffers massive damage from floods, and two years later the federal government continues to show a remarkable lack of interest in setting things right. About one in six Americans lacked health insurance for all of 2005, and our elected “leaders” look the other way and talk glibly about fictional “market solutions.” Anti-government conservative ideology so dominates American politics that we can’t even have sensible discussions about using government to address our growing problems.

    We’re strangling ourselves with our own stinginess to each other.

    Shameless Hustles and Tax Cuts

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    Old hustles never die. Fred Thompson writes in the Wall Street Journal [emphasis added]:

    President John F. Kennedy was an astute proponent of tax cuts and the proposition that lower tax rates produce economic growth. Calvin Coolidge and Ronald Reagan also understood the power of lower tax rates and managed to put through cuts that grew the U.S. economy like Kansas corn. Sadly, we just don’t seem able to keep that lesson learned.

    One of the triumphs of the Coolidge Administration was the passage of his tax program in 1926; the photograph shows him signing it. The Coolidge program “repealed the gift tax, halved estate taxes, substantially cut surtaxes on great wealth, and reduced income taxes for all,” it says here. The photo is dated February 26, 1926. Assuming that is accurate, We Now Know that the Stock Market Crash of 1929 was only slightly over three years and seven months away. The Great Depression followed soon after.

    Calvin Coolidge’s tax program is the bad example that won’t die. I remember just after George W. Bush was “elected” in 2000 some eager young folk of the Right wrote giddy tributes to tax cuts that cited the Wisdom of Silent Cal. But mention of Coolidge vanished rather quickly, and I assume there was some frantic back-channel communication explaining that, um, maybe Calvin Coolidge’s economic policies are not something we want to emphasize. I guess Lawnorder Fred didn’t get the memo.

    I’m not saying that the Coolidge tax cuts were the direct cause of the Great Depression. But that decade wasn’t called the “Roaring Twenties” for nothin’. Coolidge paid for his tax cuts by being a scrooge on domestic spending, including vetoes of flood control and agricultural programs for which many folks had dire need. What happened next is right out of the history textbooks [emphasis added]:

    Even before 1929, signs of economic trouble had become evident. Southern California and Florida experienced frenzied real-estate speculation and then spectacular busts, with banks failing, land remaining undeveloped, and mortgages foreclosed. The highly unequal distribution of income and the prolonged depression in farm regions reduced American purchasing power. Sales of new autos and household consumer goods stagnated after 1926. [Eric Foner, Give Me Liberty: An American History (Norton, 2005), p. 800]

    If the Coolidge tax cuts of 1926 “grew the U.S. economy like Kansas corn,” as Fred suggests, one wonders why sales of new autos and household consumer goods stagnated after 1926.

    The stock market did indeed go up a lot during the Coolidge Administration, but much of that was from overheated speculation. It was a bubble, in other words. And when the bubble burst, it burst big.

    Fred writes glowingly of the soaring tax revenues and the shrinking budget deficit given us by Dear Leader’s glorious tax cuts. If you want to see what a crock that is, just look at this chart via Ezra Klein.

    The other myth cited by Fred Thompson is, of course, the myth of the Reagan tax cuts. The fact is that in 1982, when he realized his tax cuts weren’t growing revenue as promised, Reagan raised some taxes considerably to make up for the shortfall. He also raised taxes in 1983, 1984, 1985, 1986, and 1987. Bruce Bartlett patiently explained this in a National Review article written in 2003. In this article the hapless Bartlett wrote that prudent management of the economy required some tax increases. Like anyone on the Right would listen to that.

    A few days ago Bartlett wrote an op ed in the New York Times complaining that most of the people pushing “supply-side economics” these days have no clue what it actually is.

    AS one who was present at the creation of ”supply-side economics” back in the 1970s, I think it is long past time that the phrase be put to rest. It did its job, creating a new consensus among economists on how to look at the national economy. But today it has become a frequently misleading and meaningless buzzword that gets in the way of good economic policy.

    Today, supply-side economics has become associated with an obsession for cutting taxes under any and all circumstances. No longer do its advocates in Congress and elsewhere confine themselves to cutting marginal tax rates — the tax on each additional dollar earned — as the original supply-siders did. Rather, they support even the most gimmicky, economically dubious tax cuts with the same intensity.

    The original supply-siders suggested that some tax cuts, under very special circumstances, might actually raise federal revenues. For example, cutting the capital gains tax rate might induce an unlocking effect that would cause more gains to be realized, thus causing more taxes to be paid on such gains even at a lower rate.

    But today it is common to hear tax cutters claim, implausibly, that all tax cuts raise revenue. Last year, President Bush said, ”You cut taxes and the tax revenues increase.” Senator John McCain told National Review magazine last month that ”tax cuts, starting with Kennedy, as we all know, increase revenues.” Last week, Steve Forbes endorsed Rudolph Giuliani for the White House, saying, ”He’s seen the results of supply-side economics firsthand — higher revenues from lower taxes.”

    Those of you who want a meatier discussion of this issue can find it at Economist’s View (Bruce Bartlett joined in). My only quibble with what he wrote is that, as I remember, the Reagan-era supply siders were not the sober and cautious crew that Bartlett describes.

    Naturally, a number of rightie bloggers are linking to the Fred Thompson article with warm approval. I guess anyone dumb enough to think Larry Kudlow is an economist is dumb enough to admire Calvin Coolidge’s tax policy. Sadly, we just don’t seem able to keep that lesson learned.

    Update: For an explanation of why JFK was not a supply sider, see David Greenberg, “Tax Cuts in Camelot?” (Slate, January 16, 2004). For sharp commentary on Fred Thompson, see Taylor Marsh, “Desperate After Dubya?”

    Next Steps

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    Now that the House and the Senate have passed emergency appropriations bills to fund the war in Iraq, the next step is for members of the House and Senate to come up with a compromise bill. It is hoped a compromise bill can be agreed upon and passed during the week of April 16. Then it goes to President Bush, who has sworn loudly and stridently that he will veto it.

    Let’s assume the compromise bill goes to Bush in April, and he vetoes it. There aren’t enough Dems to override the veto. I’ve heard suggestions that Congress should then pass whatever bill Bush wants, which sends a signal that this is Bush’s War. He and the Republicans own it, and whatever happens is entirely their doing. However, this also might send the signal that the Dems are caving in once again, mightn’t it?

    Others want to keep sending Bush bills with conditions, perhaps passing monthlong spending bills (Rep. Murtha’s suggestion) in the meantime so Bush can’t say Congress isn’t funding the troops. Well, he’ll say it anyway, but who’s listening to the little creep at this point?

    The talking point du jour from the Right seems to be that “pork” in the supplement bill somehow harms the troops. Exactly why the domestic spending items in the bill takes anything away from the troops is not clear, since both House and Senate bills provide every penny Bush asked for to fund his war. The House bill provides more money than Bush asked for, actually. The Republicans appear to claiming that the domestic items are monies taken away from the Pentagon’s request, but that’s not so.

    Yes, pork is pork. An op ed in today’s New York Times by Thomas Schatz, “Pork Goes to War,” provides a chart listing the porcine items in the House and Senate supplement bills. He notes that emergency supplement bills are called “Christmas trees” because, as they are exempt from budget rules, they tend to get decorated with “ornaments.”

    (Schatz, btw, is the President of Citizens Against Government Waste, a nonprofit that appears to be a corporate front group. CAGW has campaigned on behalf of the tobacco industry and in favor of Microsoft and against open source software, for example.)

    On the other hand, some senators yesterday tried to make the point that a congressional emergency supplement bill can rightfully contain funds for anything that Congress thinks is an emergency. One cannot tell from Mr. Schatz’s chart if the items are true emergencies or not. Yes, $20 million in the Senate bill for “Mormon cricket eradication” does sound suspicious, but Nevada may be suffering a deadly plague of Mormon crickets, for all I know.

    Schatz’s chart does clear up the Great Spinach Mystery. Yesterday a Republican senator insisted on taking the time for a roll call vote on stripping all mention of spinach out of the Senate Bill. Sen. Patty Murray explained, somewhat tensely, that there was no spinach in the bill, so such a vote wouldn’t change anything. Sen. Harry Reid asked if they could skip the roll call if the Dems all promised to vote for the amendment. The Republican wouldn’t budge, and a roll call was taken to make the world safe from spinach. I see now that the House bill contains $25 million for spinach growers in California. (I suspect that has something to do with the e coli bacteria found in some packaged spinach last September. )

    Back to what to do about the veto — I’d consider sending Bush the bill he wants with a great big warning that Congress will accept no more emergency appropriations requests for Iraq. If you want money for Iraq, Mr. President, from now on you have to go through regular appropriations procedures. After four years the dadblamed war ain’t an “emergency.”

    Linda Bilmes explained in Nieman Watchdog     last September:

    The money already spent, in cash terms, is more than $400 billion. This has been approved through a series of “emergency supplemental” requests by the Administration. This is a technical but really important point: Normally, the Defense Department requests money through the traditional channels, which means that it gets vetted and analyzed by the Office of Management and Budget and the congressional committees. But for Iraq, there has been what I call an “accounting conspiracy” — all the money has been requested through 13 emergency supplemental requests which receive minimal scrutiny. This has resulted in a lot of fraud, corruption, overpayments to contractors like Halliburton, etc.

    The legal purpose of the emergency supplemental is supposed to be an actual unexpected emergency, like Hurricane Katrina. By contrast, the administration has known for the past 3 years about its approximate financial needs for Iraq. It just chooses to fund the war this way so it does not need to request – nor does Congress need to vote – on the huge sums involved. Instead, Congress can vote on bite-sized chunks that don’t attract much attention.

    I think it’s way past time for Congress to make a big bleeping deal out of the “emergency” appropriation funding. Bush wants to talk pork? Let’s talk about Bush’s piss-poor money management. He fancies himself the “CEO President”; a real CEO who played budget games like that would face some pretty wrathful shareholders, not to mention the SEC if Bush were using accounting tricks to cover it up.

    Government: Smart or Stupid?

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    Bruce Reed writes in Slate:

    More Is Less: In 1994, Republicans took over the Congress with one goal foremost in mind—to turn Americans against government. Twelve years later, they’ve succeeded, although not the way they intended. A new CNN poll finds that 54 percent of Americans think government tries to do too much, while only 37 percent think government should do more. And to put government in its place, they’re going to vote … Democrat.

    The poll linked doesn’t provide insight into what people think the government is doing too much of. Jeff Greenfield provides a clue:

    The discontent includes the sharp growth in government spending — including the kind of domestic spending conservatives have long deplored — to the growth of “pork-barrel” projects once seen as an emblem of how big government politicians hold power.

    “They have increased the amount of government spending by a degree that no Democrat would ever dream of getting away with,” said columnist Andrew Sullivan.

    True enough. But then I read this story by Adam Nossiter in today’s New York Times about a high school in New Orleans:

    In the last six weeks, students at McDonogh, the largest functioning high school here, have assaulted guards, a teacher and a police officer. A guard and a teacher were beaten so badly that they were hospitalized.

    The surge hints at a far-reaching phenomenon after Hurricane Katrina, educators here say. Teenagers in the city are living alone or with older siblings or relatives, separated by hundreds of miles from their displaced parents. Dozens of McDonogh students fend largely for themselves, school officials say.

    “They are here on their own,” Wanda Daliet, a science teacher, said. “They are raising themselves. And they are angry.”

    The principal, Donald Jackson, estimated that up to a fifth of the 775 students live without parents.

    “Basically, they are raising themselves, because there is no authority figure in the home,” Mr. Jackson said. “If I call for a parent because I’m having an issue, I may be getting an aunt, who may be at the oldest 20, 21. What type of governance, what type of structure is in the home, if this is the living conditions?”

    After Hurricane Katrina the loss of homes and jobs caused many already fragile families to break apart. And the failure of every level of government to re-establish New Orleans as a viable city turned what might have been a temporary disruption into long-range social disintegration.

    Of the 128 schools in the city, fewer half have reopened. The state took over many of them after the storm. That change, hailed at first as a bright beginning, has proven to be partly stillborn, as teachers, textbooks and supplies came up drastically short in the state-run schools.

    The McDonogh library has no books. State officials, fearing mold, threw out all of them.

    Rundown before the storm, the school buildings are now even more battered. The stalls in a girls’ restroom have no doors.

    We could, if we wanted to be anal, argue about how much of the fault and responsibility lies with local and state government, and how much lies with federal government. The fact is that Louisiana is a poor state that lacks the resources to recover from a disaster on the scale of Katrina. And the failure of a major city like New Orleans affects all of us, directly or indirectly. The nation, not just New Orleans, needed local, state, and federal government to work together to help New Orleans recover as quickly as possible.

    Instead, we got grandstanding.

    For all of Bush’s talk about how he wants “local folks” to be in charge of hurricane recovery, the federal government has kept most of the project under its own inept control. As water still stood in the streets of New Orleans, the feds began to cut sweetheart deals with its pet contractors/contributors. Perfectly capable local companies were overlooked in favor of companies from as far away as Alaska that (ah-HEM) just happened to have close relationships to the Washington Republican Party establishment. And these contractors answer to their buddies in Washington, not to officials in New Orleans or Louisiana. And as a result, billions of taxpayer dollars have been wasted by fraud and abuse. (See, “His Majesty to Visit One of the Lesser Colonies“; “Life Lessons“; and “The Quintessential Bush.”)

    And the lives of the young people of New Orleans are getting thoroughly bleeped up.

    Government did too much, all right. It did too much of the wrong thing. But it didn’t do enough of the right thing.

    Here’s a story by Jeffrey H. Birnbaum and Jonathan Weisman in today’s Washington Post that provides another example of misplaced priorities:

    As part of their midterm election push, House Democrats are promoting a wide-ranging legislative agenda that would add tens of billions of dollars a year to the federal budget for the military, homeland security and education yet still impose a new budget restraint that would make it harder to widen the annual deficit. …

    … “”It’s schizophrenia in ’06 is what it is,” said Rep. Patrick T. McHenry (R-N.C.), a member of the Budget Committee. “You cannot balance the budget by vastly increasing spending.”

    Congressman McHenry, btw, was identified by Ari Berman as one of the five Congress critters most likely to keep alive the corrupt legacy of Tom DeLay:

    Patrick McHenry (age 30). The youngest member of the 109th Congress, McHenry is the “it” boy of the GOP establishment. DeLay recently named McHenry one of his potential successors, an endorsement the freshman accepted enthusiastically. “I’m blown away,” McHenry told the Washington Times. “I’m so excited that Tom DeLay would say that about me”–a fitting compliment to a pupil who’s earned a reputation as the party’s “attack-dog-in-training.” DeLay was the first Washington pol to contact McHenry after he won the Republican primary in North Carolina’s rural 10th Congressional district, promptly sending his campaign $10,000. Upon election, DeLay shepherded McHenry through Washington, with cushy seats on the Budget and Financial Services committees, a communications position within the GOP’s fundraising arm and a role in Blunt’s whip operation. McHenry returned the favors by attacking House minority leader Nancy Pelosi for alleged travel violations and by voting, along with just nineteen other Republicans, to rewrite House ethics rules permanently to insulate DeLay. McHenry’s clearly a quick learner: He’s hired Grover Norquist’s press secretary and dated a former assistant of Karl Rove.

    Let’s be sure we all understand one thing clearly: The single biggest cause of our current budget deficit is Bush’s tax cuts. The budget deficit didn’t come about because the United States, still the richest nation in the world, squandered money on education. It came about because of the bleeping tax cuts, and after that because of corruption and pork.

    As you can see from this pie chart, the second biggest drain on national spending is “Defense, Homeland Security and International.” (International what isn’t clear.) But don’t forget that we’re dumping $2 billion a week into the bleeping war in Iraq, not to mention spending money to protect petting zoos in Indiana, while cutting spending for security in the major cities most likely to be struck by terrorism. And might I add, missile defense? It might be that we are spending enough money on “defense, homeland security and international” already; we’re just spending it in stupid ways.

    And if the Republican “defense, homeland security and international” budget isn’t generously larded with kickbacks and quid pro quos, I will eat my sneakers.

    The Dems want to institute a pay-as-you-go system, in which any new spending must be offset by budget cuts or tax increases. Apparently Republicans disagree with this idea. Why? Given that they’ve hardly been examples of fiscal restraint, they should be grilled mercilessly on this point. Too bad we don’t have an independent, professional news media any more. Reporters used to be good at that sort of thing.

    Anyway, as Birnbaum and Weisman at WaPo explain,

    Democratic leaders dispute the accusation and have been talking up Six for ’06. The plan would allocate billions of dollars to build up the military, subsidize student loans and bolster port security. It would raise the minimum wage, make college tuition payments tax-deductible, repeal oil-company tax breaks and expand incentives for personal savings accounts, among many other provisions.

    The program would prohibit the House from approving new spending or tax measures that widen the budget deficit. It would do that by restoring budget rules requiring that all future spending increases and tax cuts be offset by equivalent tax hikes or spending cuts.

    “It’s a road map to how Democrats would govern” if they win a majority in the House, said Jennifer Crider, spokeswoman for Minority Leader Nancy Pelosi (Calif.).

    Sooner or later President Bush’s tax cuts are going to have to be rolled back. In spite of the fact that President Clinton proved tax increases don’t kill the economy, Republicans will wail and shriek that the economy is dooooooooned if the wealthy are forced to pay their fair share of the tax burden. We can’t afford to pay for education because, you know, Lord and Lady Lah-Dee-Dah wouldn’t be able to buy a second yacht. And that takes jobs away from yacht builders.

    But experience shows us that investing in education brings substantial returns.

    Purdue University President Martin C. Jischke:

    The enormous economic growth and social advancements that fueled the 20th century took place predominantly after World War II. That is when the G.I. Bill educated people in the emerging technologies of the day.

    Who were these people?

    They were people like Kenneth Johnson, who grew up on remote farms in Arkansas and Missouri and went to a one-room schoolhouse surrounded by mud. He came to Purdue on the G.I. Bill, graduated with a degree in engineering, and went on to help revolutionize airplane engine technology working for General Electric.

    They were people like Billy Christensen, who finished his studies at Purdue in 1950 on the G.I. Bill and took a job with a punch card company. He went on to become vice president and general manager of the international arm of that company — IBM.

    They were people like Bill Rose, who barely survived the Depression before he went to war and then came to Purdue on the G.I. Bill fresh out of the Navy. He graduated and took a job in the Joint Long-Range Proving Ground at the Banana River Naval Station. We know it today as the Kennedy Space Center.

    The G.I. Bill was an investment in people and education that has paid for itself many times over.

    It’s obvious that development of new technologies is critical to economic growth these days. While I don’t begrudge anyone a good job in the yacht-building industry, it makes no sense to place the discretionary spending of the super-rich (who, after all, could buy that second yacht in France) ahead of invention, technological development, and entrepreneurship here in the U.S. Yet that’s what Republican tax policies do. And as more and more of the nation’s wealth gets tied up in paying interest on the money we owe China, less and less money will be available for things like education and business loans. This is no way to run an economy.

    Much of rightie hysteria over “big government” and the myth of the tax-and-spend liberals can be traced to a backlash against Lyndon Johnson’s Great Society, as I explained here. Although American conservatives have always been allergic to entitlement spending, during the New Deal and post World War II era — when most of the beneficiaries were white — a majority of Americans took a more progressive view. But in the 1960s, conservative politicians successfully planted the idea that “welfare” was just a transfer of white tax dollars into black pockets, and suddenly white America decided that government programs (like the ones that had paid for their educations and subsidized their low-cost mortgages) were bad. Ronald Reagan, with his “welfare queen” stories, milked that notion for all it was worth. But I think we may finally have reached a point at which race-baiting just doesn’t work the way it used to, and white middle-class Americans are uncomfortable and insecure enough that they may be ready to listen to some facts. And the facts are that, in the long run, investing in ourselves is good for the economy. Conversely, cutting any Americans off from education and opportunity is bad for the economy, and will keep all of us poorer in the years to come.

    Back to Bruce Reed at Slate:

    Call it the Wal-Mart Effect. Independents and Perotistas pointed toward the kind of government Americans would get under Clinton: more for less.

    Bush’s approach has been just the opposite—less for more. The federal government has gotten visibly bigger, with deficits that squandered the surplus and have added more than a trillion dollars to the national debt. A study by Paul Light of the Brookings Institution shows that the number of federal contractors has ballooned by 2.5 million over the past four years, a 50 percent increase. After shrinking by 400,000 under Clinton, the federal work force is growing again as well.

    Bush would dearly love to blame the return of big government on Congress, Democrats, and the terrorists. But a big government that costs more and succeeds less is at the core of Bushism. Bush ran a campaign that promised not to cut government and runs a government that doesn’t try to solve problems. Where the president has expanded government’s reach—from Medicare to the Department of Homeland Security—it hasn’t gone well. Where we needed government to succeed—from managing Iraq to responding to Katrina—the Bush administration did a Hack of a job.

    Seems to me we shouldn’t be talking about “big” or “little” government; we should be talking about “smart” or “stupid” government.