Today I read an opinion piece from David Broder called "Trillion-Dollar Gimmick" (syndicated in my Winston-Salem Journal from the Washington Post) that reminded me why I think we will always have some iteration of what we now call MSN or mainstream media.
In his piece Broder highlights a little bookkeeping fun that the Bush Administration is having to the tune of about a trillion dollars. Definitely go to the piece to read the details, but my point here is that while I was reading Broder’s piece it occured to me that without him I might not have ever heard about this. I’m sure there’s a blogger out there somewhere who has covered this whole deal, but I doubt I would have found him or her. Heck, maybe Broder even picked this up from a blogger, but the point is that most people wouldn’t hear about it without the exposure in the MSM. (To be honest most people still won’t hear or care about it, but that’s a whole other matter within our society).
Even if I did find this information from some anonymous blogger I wouldn’t know whether or not to trust the information. On the other hand I know that there are several reason to trust Broder’s info:
- If he’s wrong he risks his reputation, and his career, so he’s likely to have vetted it. In other words he has money in the game.
- The Post has a lot to lose if Broder’s wrong. Sure they have a liberal slant and this is an opinion piece, but they don’t want to look stupid because it’s bad for business. In other words they have money in the game.
- If Broder and the Post are wrong then they’ll be called on it because tens of thousand of people read him/it and they’ll catch hell from some readers in the know. Look what’s happened to CBS and The New York Times lately.
I definitely think that there’s an information revolution going on, you know the whole "citizen journalism" thing, but what is developing is an eco-system that will always need some semblance of the MSM to keep it in balance.
Oh, and please go read the Broder piece and let me know what you think. Personally I think it’s par for the course with the Bushies.
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Befuddled 
First off, I’ve always had a problem with cost being tax revenues you can, but don’t collect. I prefer costs to be what we spend, not what we fail to take from the people.
That being said, here’s Broder’s complaint:
This year, however, the budget the president submitted on Feb. 6 simply assumes that the tax cuts have been made permanent — and thus includes them in the “baseline” for all future years.
The effect, according to the center’s analysis, is that “legislation to make these tax cuts permanent will be scored as having no cost whatsoever.”
If Bush includes the tax cuts as a baseline for future years, doesn’t this have the effect of making future deficits bigger by assuming revenue will be less? Doesn’t this give us a clear picture immediately of what we’re looking at? If Bush assumes the cuts disappear in 2010 or whenever, doesn’t this give politicians more money to spend currently by making the deficits seem to be less than they are if the tax cuts are made permanent?
Thanks for the reply David. You know I kind of look at this like I do at accrual accounting: it kind of makes sense to me, but my simple mind prefers cash accounting because it seems more straightforward and honest. Quick aside: I still feel for the accountant at a company I was working for who had to teach me the concept of accrual accounting when I was tasked with coding all the marketing department’s payables. I’m an English major for goodness sake!
To answer your question, I think that yes if it is included in the baseline for future years it will show larger deficits in those years but it will not accurately reflect the source of those deficits. Also since it doesn’t show up in the current budgets doesn’t it artificially depress the true debt we’re racking up with today’s spending? To me it seems like the administration wants to have its cake and eat it too.
A personal analogy would be that if you were my business partner and I went out and racked up a ton of long term debt, the first debt payment not being due until February, 2009. To keep the books from looking really depressing I don’t include that debt on our balance sheet until 2009 and then I sell you my share on December, 2008 and walk away with you feeling like you’ve been handed a pretty solid business. It’s only when the banker calls in February that you begin to realize how deep the horse-stuff is.
Like I said, I’m an English major so maybe I’m off on this but I think that is the gist of what’s going on. Also, to the main point of my post I’m glad there are folks like Broder to bring it to our attention so that we can have this discussion. Heck we can definitely disagree on the true intentions of the administration here, but it’s nice to know that we know what to argue about.
Thanks again for the reply.
Agree with your point about the MSM. Rock stars will always have a place although they may become rock stars through avenues other than the NYT and the WP.
The business analogy doesn’t work for me (but I get your point) because it assumes that government should always be looking to increase revenue. My point of view is that the government should be doing all it can to put itself out of business. See a need. Solve it. Get out of the way. Don’t start a bureaucrat retirement program.
…doesn’t it artificially depress the true debt we’re racking up with today’s spending?
I don’t see how. We’re assuming right now in 2006 that we won’t have money from tax increases (that may not occur) in 2010. The alternative is to assume in 2006 that we’ll have a extra revenue in 2010. If I’m being cynical, Broder’s ploy is to go ahead and assume that the money will be there in 2010 so that we spend it now and thus make it that much harder to make the cuts permanent.
Going back to the analogy, the debt will be carried on your books regardless of whether or not payments are due (unless you’re crooked and hide it). You might look at it like this. You’ve got a project that you’re bidding on that’s set to start in 2010. It’s fifty-fifty as to whether you get it. Your partner wants to assume that it’s in the bag and start budgeting for ’09 with those revenues. You want to assume you haven’t got the contract and leave out of your ’09 budgeting expected revenue from the project.
David,
I think your analogy works much better and I think it says what I was trying to say. Good point about Broder’s assuming the revenue will be there in 2010.
BTW, I’m in agreement with you re. the government. My biggest complaint about the Bush administration isn’t about tax cuts it’s about increased spending. You couple those two together and WHAMO!
I definitely think that the government should be involved in as little as possible if for no other reason than they tend to screw up what they touch. Of course there are things that I think only the government can or should do: law enforcement; strategic infrastructure like roads, airports, pipelines,natural resources and perhaps even communication networks; trade regulation where necessary (I define that as anti-trust and international trade relations); border regulation and protection.
Why the government is involved in the arts is beyond me. Also, why is there a Small Business Administration? The Department of Education and HUD are both black holes of waste. I could go on forever.
I’m also a proponent of a simplified tax system that covers those critical infrastructure needs; I figure that the money saved in tax compliance could boost the economy more than any single tax cut that has ever been proposed. Not sure what the tax lawyers and accountants would do, but I’m sure they’d figure out another gig.
I need a beer after all this.
I always need a beer.
No doubt about Bush and spending. The only way it makes sense is as a re-election strategy. Incumbents (no matter the party) want to make as many groups as happy as possible, hence we get spending on top of spending. The country be damned.