Factoring Out the Recession

Just as an additional note, the economy itself is not to blame for a $1.3 trillion deficit in 2011. According to this graphic in the New York Times, based on CBO budget projections, the recession is responsible for $480 billion of the loss in government revenue. Likewise, this chart pegs the recession's responsibility at about $400 billion or so.

Of course, I admit that the situation is very complex. One could potentially argue that if George W. Bush hadn't lowered taxes during the last decade, the recession might have been worse—although I would certainly find this argument a tough sell. But it still shows that even if the economy suddenly started chugging along with steady growth, we'd still be at best $800 billion in the hole.

Now, repeal the Bush tax cuts, and that helps a little more, bringing us up another $300 billion or so. Save another $200 billion by getting us out of Iraq and Afghanistan. If those two things happen, we're still a good $300 $600 billion in the red.

So, in a rosy world with strong economic growth, Clinton-era taxes, and no wars, we still have some pretty tough choices to make. Now, what do we do with the real world?

Updates: As I learned in this NYTimes Editorial, apparently the proposed 2011 accounts for letting the Bush-era tax cuts expire at the end of 2010.

The 2011 Budget

For numbers geeks like me, today's interactive diagram in the New York Times of President Obama's proposed 2011 budget is just about the equivalent of heaven. Here are, in rough but much more accurate numbers, a breakdown of 10 of the largest parts of the $3.69 trillion federal budget, along with a remainder category:

• Defense spending: $740 billion
• Social Security: $740 billion
• Medicare: $580 billion
• Income Security: $430 billion, of which about 80% is various "welfare" programs and 20% consists of various working- and middle-class tax credits
• Medicaid: $260 billion
• Interest (debt service): $250 billion
• Veteran benefits: $130 billion
• Federal employee retirement and disability: $125 billion (split roughly 60/40 between civilian and military)
• Highway funding: $45 billion
• Student financial assistance: $40 billion
• Everything else: $350 billion

Here's an exercise for all of you Republicans out there. The projected deficit for 2011 is $1.3 trillion. Balance the budget without raising taxes or cutting anything from defense spending, Social Security, Medicare, or debt service. Give it a try, and let me know your solution.