Wednesday, December 11, 2013

Cruising the Web

I can understand why conservatives don't like the Ryan-Murray budget deal because it doesn't do anything to address our long-term fiscal problems and it lifts the sequester a bit with a mix of added spending for both defense and non-defense programs. And, of course, it does nothing about Obamacare. But true conservatives should know that they should never make the perfect the enemy of the good or even of the relatively okay. We're not going to get what we want. Period (as Barack Obama would say). So the real question is whether or not we want another shutdown. That accomplishes absolutely nothing. Whatever publicity to our fiscal concerns we might want would be more than offset by all the bad feelings that the shutdown engenders.

Kevin Hassett makes the best arguments possible for Republicans to support the deal.
Based on the outline that a staffer e-mailed me a couple of hours ago, the Ryan-Murray budget deal makes a trade that most Republicans would likely prefer not to make. It balances higher spending in the near term against longer-term reductions that, combined with increases in user fees, will reduce the deficit over ten years. But since promised future reductions can be reversed, Republicans are being asked to trade certain cuts today for uncertain cuts down the road.

Still, many Republicans might rationally choose to do so, for five reasons. First, the deal is microscopic, so small as to amount to economic rounding error. Second, it reduces government pensions by changing an indexing formula, a method that might have a better chance of sticking than more straightforward reductions, making these future cuts more certain than most. And if the new indexing continues forever, then spending will drop in the long run by much more than it will increase over the next two years. Third, if House Republicans pass this, it will reduce uncertainty and help the economy. Fourth (though this weakens the previous point some), the deal appears not to lift the debt limit, so they can play that game again if they want to. Finally, assuming that the debt-limit increase is not going to lead to another showdown next year, this deal allows Republicans to talk about Obamacare all next year.

For Democrats, who might prefer not to talk about Obamacare next year, and who wanted to increase unemployment-insurance benefits, it seems like a weak deal as well. Such is the fruit of bipartisan negotiation. Given the strong economic data over the past two months, many of them might choose to vote for it in the hope that policy stability will help bolster an already accelerating economy, allowing them to run on a strong economy next year.

There are many people in both parties who have to vote against this deal, but probably enough who don’t to allow it to pass.
It's an easy vote for politicians to oppose the deal, but opposition to a bad deal doesn't mean that we'd get anything better. I am basically with the WSJ which terms the agreement as the "least bad budget deal."
The best that can be said about the House-Senate budget deal announced late Tuesday is that it includes no tax increases, no new incentives for not working, and some modest entitlement reforms. Oh, and it will avoid another shutdown fiasco, assuming enough Republicans refuse to attempt suicide a second time.

The worst part of the two-year deal is that it breaks the 2011 Budget Control Act's discretionary spending caps for fiscal years 2014 and 2015. The deal breaks the caps by some $63 billion over the two years and then re-establishes the caps starting in 2016 where they are in current law at $1.016 trillion. Half of the increase will go to defense and half to the domestic accounts prized by Democrats.
Of course, who knows what will happen as all the problems of Obamacare and adverse selection kick in and the program becomes a whole lot more expensive than predicted. The Democrats are going to want to save their plan by subsidizing more and more people. We'll hear the same arguments we're hearing now about extending unemployment benefits over and over.

I am amused the self-congratulations that Paul Ryan and Patty Murray are giving themselves for returning to regular order in passing an actual budget. This is, of course, what they should be doing and should have been doing for the past several years. But they haven't, because the Senate wouldn't pass a budget since Harry Reid didn't want to force his members to have to make a tough vote. But doing what they are supposed to do is no reason for self-congratulations. It reminds me of my students who think they should get praise if everyone in the class does their homework. Nope. You don't get admiration for doing what you are supposed to do.

James Capretta explains why Obamacare's troubles are far from over.
The real test of is whether it is transmitting accurate data about those signing up for coverage to the insurance plans selected by the consumers. We have no idea if that is happening today, and plenty of reason to suspect it is not.
And the program still needs to have large number of healthy people to sign up for insurance. Younger, healthier people are going to see higher premiums and higher deductibles than they could have had before Obamacare.

Here is the story of how Nelson Mandela changed his mind to embrace capitalism rather than how he originally planned to nationalize major industries in South Africa.

Guy Benson lays out the evidence to explain to all those liberals who think opposition to President Obama is unprecedented. They all have a total ignorance of recent history.

David Bernstein recounts how, when he was in college, he was able to dismiss a ridiculous charge against him by a former friend. He just issued a counter-charge against his accuser. If that method of fighting kangaroo courts on our universities catches on, just think of the fun as charges and counter-charges abound.

Noemie Emery explains why the problems with Obamacare isn't Barack Obama's Katrina or Iraq War. The difference is that this is catastrophe that Obama and the Democrats chose.

Richard Epstein looks at how President Obama still doesn't get it when it comes to understanding how the economy works. He's incorrigibly ignorant.
If his substantive knowledge could keep pace with his soaring rhetoric, this country might start to unleash its productive powers. But so long as the President keeps pushing failed and flawed policies, we can expect more mediocrity and drift, both for ourselves and for future generations.
Jonathan Tobin explains why refusing to extend unemployment benefits does not make Republicans Scrooge. But the rhetoric is so much easier than understanding what is really going on when we keep on extending long-term unemployment benefits.

What a non-surprise. Obama officials are admitting that the easing of the sanctions on Iran is about three times as much as they've admitted publicly.