Editore"s Note
Tilting at Windmills

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January 27, 2004
By: Kevin Drum

SULLIVAN ON KRUGMAN....Andrew Sullivan today:

KRUGMAN BLAMES TAX CUTS: That's the entire reason for the deficit. Yeah, right. But how can he ignore the obvious place of exploding domestic discretionary spending under Bush? Well, we have long learned about the fragility of his intellectual honesty.

Here's what Krugman actually said:

A recent study by the Center on Budget and Policy Priorities does the math. While overall government spending has risen rapidly since 2001, the great bulk of that increase can be attributed either to outlays on defense and homeland security, or to types of government spending, like unemployment insurance, that automatically rise when the economy is depressed.

Why, then, do we face the prospect of huge deficits as far as the eye can see? Part of the answer is the surge in defense and homeland security spending. The main reason for deficits, however, is that revenues have plunged.

(Italics mine throughout.)

Did Sullivan read the same column as the rest of us? Krugman very clearly states that spending has "risen rapidly" and that revenue shortfalls are only the "main reason" for the growing deficit, not the entire reason. Was he just hoping that no one would click the link to see what Krugman actually wrote?

If you're interested, the CBPP report that Krugman relies on provides the following numbers (all are expressed as % of GDP):

  • Spending increases: 1.6%

  • Revenue decreases: 5.0%

  • Total change: 6.6%

Thus, spending increases are responsible for 24% of the deficit and revenue decreases are responsible for 76%. What's more, Krugman is right to say that the "great bulk" of the discretionary increases are for defense and homeland security, things that Sullivan has enthusiastically supported. Since 2001, military/homeland security spending has increased about 16% per year while all other spending has increased only 5% annually.

If Sullivan really wanted to criticize Krugman, he could have pointed out that "revenues have plunged" is fairly slippery language. It's technically correct, of course, but at the same time it rather deliberately avoids making the distinction between how much revenues have fallen because of the recession vs. how much revenues have fallen because of the Bush tax cuts. Both are factors.

But I guess Sully prefers a lazy, cheap shot, even if it's wrong. Pitiful.

Kevin Drum 4:44 PM Permalink | Trackbacks

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