Editore"s Note
Tilting at Windmills

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May 3, 2011

THE WISDOM OF CROWDS.... A few months back, the New York Times' David Leonhardt put together an interesting online feature, allowing readers to balance the federal budget however they see fit. (Participants wouldn't balance the budget all at once, but rather, over the course of several years.)

Bill Keller noted the results of the online exercise in his column today, and seemed pretty impressed at what people, collectively, came up with.

Nearly 9,000 readers worked the puzzle. Individually, they were all over the map. But as a group, they accomplished the goal by splitting the difference: almost exactly half the savings came from tax increases, half from spending cuts. Collectively, readers seemed to realize that the hole we're in is too deep to be filled by tax increases alone or spending cuts alone.

The result is broadly consistent with polls, which show that a majority of American voters hate most tax increases and a majority hate cutting entitlements, but -- confronted with a choice of one, the other or some of each -- they'll go for the hybrid. The hive mind, it seems, is open to compromise.

So far, so good. The "hybrid" approach -- or as Democrats are calling it, the "balanced" approach -- has the benefit of being a popular and responsible approach to deficit reduction (though I feel compelled to note that deficit reduction shouldn't be policymakers principal goal). That the wisdom-of-crowds answer is the right one is heartening. That congressional Republicans consider this answer so unacceptable that they won't even consider the possibility is discouraging.

But Keller added a more problematic observation.

On the question of the national debt, all the forces of stagnation are at their worst: we're like Israel, where there is something very close to a grudging consensus about a two-state peace, but every attempt to enact it is hogtied by democracy. Thus the formal budget debate is currently framed as an ugly standoff between Representative Paul Ryan, whose plan uses the debt as a pretext to radically shrivel the government, and President Obama, whose response is essentially "Over my dead body."

That's why I'm rooting for the Gang of Six -- the three Republican and three Democratic senators who have set out to negotiate a credible deficit plan that can move Congress past paralysis and toward compromise.

I think this is wrong in some important ways. The first is characterizing President Obama's budget approach as an inflexible bookend to Paul Ryan's radicalism. That's simply not true -- the president's long-term debt reduction plan includes extensive cuts in spending, raises taxes responsibly, and does so with numbers that add up. Dismissing it as "Over my dead body" isn't fair.

The second and more important problem is that the Gang of Six vision is likely to disappoint Keller quite a bit. While Keller praises the public for backing a 50-50 approach -- half the savings in taxes, half the saving in cuts -- the Gang is almost certainly going to present a plan that's skewed heavily towards cutting public investments and entitlements.

I say "likely" because neither Keller nor I have actually seen the plan, but Gang members have offered plenty of hints about where they're headed. As Jon Chait noted, it looks like it'll be a 75-25 split, with three dollars in spending cuts for every dollar in tax increases.

That is, of course, what happens with a Gang consisting of three conservatives, two moderates, and one liberal -- it lacks a certain balance.

Making matters slightly worse, the Gang of Six is already interested in imposing unnecessary and dangerous structural changes -- including possible spending caps -- that add insult to injury.

Want to focus on debt reduction? Fine. Like the idea of a "hybrid" solution? Fine. Consider the Gang of Six an ally in this endeavor? Not fine.

Steve Benen 3:45 PM Permalink | Trackbacks | Comments (14)

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Comments

I love the media and their bullshit called 'balance'.

Posted by: Holmes on May 3, 2011 at 3:54 PM | PERMALINK

How much would we save if we left Afganistan and Iraq? How much would we save if we reduced the defense budget 50%. How much would we save if we let the Bush tax cuts expire?

Add all 4 up and tell me how much more we have to find.

Posted by: Ron Byers on May 3, 2011 at 4:00 PM | PERMALINK

"problem" (in quotes, because there isn't one) solved, courtesy Ron Byers. No further replies needed.

Posted by: DAY on May 3, 2011 at 4:03 PM | PERMALINK

Rich white people in the corporate media playing "he said / she said"? Shocking.

Posted by: r on May 3, 2011 at 4:05 PM | PERMALINK

The "hybrid" solution has already been put out there in the best budget plan yet..."The People's Budget" presented by the progressive House caucus. It is not getting the notoriety it deserves.

One side can contribute without much harm at all...but the other side suffers severely by the contributions expected of them by the Ryan budget.

There is no contest here...The wealthy use so much more of the commons and the courts and do most of the polluting while gaining the most in returns.

Ryan is a sociopath who praises sociopaths...whose heroine was a sociopath and a hypocrite who, when confronted with cancer, took the very programs she condemned...medicare and SS...at the end of her life. Ryan's plan was never supposed to be taken seriously.

Posted by: bjobotts on May 3, 2011 at 4:05 PM | PERMALINK

Someone is in the grip of a fallacy of composition. You could get the same collective result by having half the people only propose spending cuts, and the other half only propose tax cuts. That doesn't mean there's necessary any consensus.

Posted by: DonBoy on May 3, 2011 at 4:07 PM | PERMALINK

Keller may need a new dictionary. When the bulk of the people agree on an approach, but it's blocked because one of their Representatives says "over my dead body", that doesn't sound like "democracy" to me.

Nor does the Gang of Six's obsession with finding something that will pass sound like a way to get what the people want.

Silly rabbit.

Posted by: biggerbox on May 3, 2011 at 4:11 PM | PERMALINK

KELLER:Collectively, readers seemed to realize that the hole we're in is too deep to be filled by tax increases alone or spending cuts alone.

DEAD WRONG.

~

KELLER:That's why I'm rooting for the Gang of Six

BAD MOVE.


Posted by: Joe Friday on May 3, 2011 at 4:15 PM | PERMALINK

The biggest flaw in the People's Budget is its name. They could have named it the "Economic Growth Budget." This would have 1)highlighted the historically salutary effects that higher marginal tax rates for the top brackets have on economic growth and 2)asserted their seriousness bona fides by emphasizing economic growth over help for the little guy.

Posted by: rk on May 3, 2011 at 4:22 PM | PERMALINK

Keller doesn't even get his facts right. He writes "readers seemed to realize that the hole we're in is too deep to be filled by tax increases alone or spending cuts alone."

Well, no. The Leonhardt graphic (still available at http://www.nytimes.com/interactive/2010/11/13/weekinreview/deficits-graphic.html) clearly shows that you can cut the entire 2015 shortfall by putting tax rates back to Clinton-era levels, reducing some deductions, and adding a "milllonaire's tax." Add in a few more tax changes, and you can wipe out 95% of the 2030 shortfall (and though they don't offer it, I bet you could get the rest by eliminating the capital gains preference).

The right wing has managed to create a deficit "crisis" almost solely with ill-advised tax cuts. Restore them and add in some taxes on bank transactions, and--poof!--"crisis" solved.

Not that it's actually a crisis in the first place.

Posted by: Owl on May 3, 2011 at 4:27 PM | PERMALINK

This is simply High Broderism. Obama's plan can't be a compromise--it must be one of the two extremes. The proper solution must be somewhere between the Obama plan and the Ryan plan

Posted by: rea on May 3, 2011 at 4:32 PM | PERMALINK

The gauges should have reflected budget deficit/surplus and also projected impact on employment. People would suddenly be much more taxy-spendy if they could see the whole truth at once.

Posted by: ManOutOfTime on May 3, 2011 at 4:37 PM | PERMALINK

The Gang of retarded boobs would be more apropos.
I'm sorry but that gang is peddling horseshit, plain and simple, just like the Republicans. They don't call it the Cat Food Commision simply because it's a funny insult. Bernie Sanders for President, the rest can suck it! The rest should be getting pink slips!

Posted by: Trollop on May 3, 2011 at 4:53 PM | PERMALINK

Economics has emerged as a science for at least 50 years with testable hypotheses. The only economic theory that fit the available data is Keynesian. You cannot combine Keynesian and Hooverian economics-- its like combining heliocentric and geocentric theories. You get a mush that is worse than sticking with geocentric.

For almost all Republicans-- and most Democrats, including BHO- to enable or act to validate many Hooverian/Hayekian policies is economic idiocy that will produce a political disaster. It is the equivalent of the rulers/power elite of England in 1560 (much less 1611) believing that the earth is flat and the universe is geocentric (even the Pope didn't believe the former) --- and acting accordingly. The flat earth argument would be: Columbus faked it.. and for God's sake don't sail west to challenge the Spaniards--- It's all a trick by King Phillip to get English buccaneers to sail off the end of the earth.

Posted by: gdb on May 3, 2011 at 7:01 PM | PERMALINK
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