No pork, no shoes, no service

May 18, 2007 at 3:47 pm (Uncategorized)

Matthew Yglesias, who very kindly redirected the two users we have in common to this site, points out that Porkbusters will not solve our budget problems:

This kind of thing is why people are always reaching for the name “Ramesh Ponnuru” when asked to name conservative pundits worth reading. As Scott Lemieux says “this is the central purpose of the Porkbusters campaign: to make difficult choices magically disappear, especially where the Iraq War is concerned.” As Ponnuru points out, the world simply doesn’t work like that. Conservatives either want to cut some major programs with substantial constituencies, or else they don’t really want to cut spending — pork is neither here nor there in big picture budgetary terms.

Too true, I’m afraid; the really big ticket budget items are entitlements, defense, and interest on the national debt . . . which is why we need Social Security Reform Now!   Oh, yes, my little chickadees, I’ll be here all week.  Don’t forget to tip your waiters.

But seriously, while this is true on some level, isn’t porkbusters still a good idea?  There are other reasons to want to cut pork, besides being worried about the budget deficit.  Pork may well have a big dragging effect on the economy by the distortions it introduces.  And more than that, it’s morally distasteful that senators and congressmen spend so much time–time we pay them for–trying to grab fistfuls of cash out of the public trough before the other pigs can get at it.  The people pushing porkbusters may not succeed in paying for the Iraq war, but surely they’re still doing God’s work?

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22 Comments

  1. stan said,

    I suspect that you are correct that pork causes all sorts of distortions which end up being a big drag on the economy. The lost productivity of so many bright people involved in the pork process is one distortion that many overlook.

    It is startling what happens to all the doom and gloom predictions for social security and medicare when the estimates of annual growth are nudged upward. Even 1% more per year makes an enormous difference. [Note — I still hope that we can reform both entitlements to allow more market influence.]

    Eliminating pork would pay off in far larger returns than he imagines.

  2. aaron said,

    Too true. The real pork is entitlements, regulation. What is often targeted as pork is developing and beefing up infrastructure. The one aspect of spending that should be the priority of our politicians. And one of the smallest parts of the budget.

    If you want to have cities, you’ve got to build roads.

  3. Will Allen said,

    If a city needs roads, why on earth does the Federal Government need to provide the tax revenues? So more DOT employees can compete with Megan for a decent apartment?

  4. Aaron said,

    If you mind the cents, the dollars mind themselves.

  5. Aaron said,

    Police cracking down on squeeguee men…how will that affect the murder rate? Best to ignore the squeegee men…

  6. Kathy K said,

    janegalt.net is back…

  7. bob mcmanus said,

    I have never really appreciated these arguments. What is a Congressperson or Senator from Iowa supposed to do, if not advocate for his constituency at the expense of others? Why don’t we elect all 535 as at-large representatives?

    A society or gov’t so constituted that its only deliberative functions involve benefits equally distributed to all, like mutual defense, sounds pretty but doesn’t make much sense from even a libertarian. Like any market, each individual will need a particular benefit and incentive to participate. Iowa would be among the last to be invaded by the barbarian hordes on the coasts, and without pork, might as well secede and retain its taxes.

  8. Njorl said,

    The immediate cost of pork isn’t that bad. What I dislike most are the corrupting effects it has. An incompetent boob can bribe voters with a local building project to retain office.

    On another note, talking about “social security and medicare” is like talking about the common cold and lung cancer. Social security, as mentioned above, is solvent with anything but worst case projections. If the worst does happen, it will still pay out a more generous benefit than it does today, just not as generous as planned. Medicare (and medicaid) are in deep trouble even with a good economy, never mind worst case scenarios.

  9. bob mcmanus said,

    “An incompetent boob can bribe voters with a local building project to retain office. ”

    And your point? I mean, that’s a decent approximation of his job description.

    I am sorry, and don’t mean to be offensive, but I am really not comprehending this theory of politics. In a simplest libertarian system, where the only agreed fiunction is defense, are all the rifles and tanks and jets and aircraft carriers going to be manufactured (jobs) in Georgia if that is the most efficient (and it might be, as skills etc concentrate), and the other 49 states pay their taxes and re-elect their reps? Why have representatives (of any sort, I suspect competing interests are at play in any political system) at all?

  10. spencer said,

    while Megan is completely write that the big factors behind spending or just the few things like social security, medicare, defense and interest on the debt the issue of “earmarks” is a very different concept. Until about a quarter century ago earmarks were really insignificant. If the federal government was going to fund a highway, for example the professionals in the dept of transportation would use things like traffic surveys, etc to make a professional judgment based on the economic fundamentals where it would be best to build the various highway projects that the highway budget could finance. Politics played a minor role in the allocation of these budgets. But over the last quarter century this rational budget process — note I’m saying rational, not perfect — has been displaced by the earmark process. Now if town officials think they need a bypass the officials hire a lobbyist to convince — or bribe — a congressman to earmark part of the highway budget towards the project. The highway project — the bypass for example — may or may not be a good idea. It may or may not be a better project then building a bypass around another town. Under the old system there was at least some rational attempt to do reasonable cost-benefit analysis of the project. Now that has gone by the boards and the decision is made almost completely through the pork barrel system of modern lobbying..

    This emergence of “earmarking” as a major way to allocate funds is a major factor behind the growth of the modern lobbying profession over the last quarter century and other changes in the way Washington and national politics is now played.

    Earmarking is a major factor that has drastically changed the way that the entire political system works over the last quarter century. But few people understand its significance and the press essentially ignores it.

  11. wkwillis said,

    Social security is funded by a separate tax for the sole purpose of removing it from the discretionary budget, so it’s actually a safer bet than Treasury bills.
    The national debt cannot be questioned (it’s in the Constitution), but it can be inflated away like in the years during and just after the Revolutionary War, the Civil War, the First World War, the Second World War, the Korean War, and the Vietnam War. Social security is inflation adjusted (well, in theory, sometimes it’s ahead, sometimes behind).

  12. Rob Lyman said,

    Social security, as mentioned above, is solvent with anything but worst case projections

    Only if by “solvent” you mean they’ll be sending out T-bills instead of checks. Using the definition of “solvent” you’d use for, say, a public company regulated by the SEC, not so much.

  13. Will Allen said,

    I dunno, bob. If Iowa seceded, I’d bet Chicago could invade and conquer Des Moines over Memorial Day weekend!

    Then again, given Chicago’s gun control laws, maybe Des Moines’ mayor would have his feet up on Daly’s desk, smoking a victory cigar, before the 4th of July rolled around! Sort of a Yom Kippur War on the Midwestern Plains, except without the superpower intervention……

  14. Njorl said,

    ‘Only if by “solvent” you mean they’ll be sending out T-bills instead of checks. Using the definition of “solvent” you’d use for, say, a public company regulated by the SEC, not so much.’

    That’s ridiculous. The Social Security trust fund is owed money by the single most reliable debtor in the world. If you don’t think the debt will be honored, you might as well stop using dollars and conduct all your transactions in beans and goats.

  15. Will Allen said,

    wkwillis, if the U.S. were default on the debt instruments sold at auction, interest rates would skyrocket, as purchasers came to realise that those debts had been incorrectly priced, given the risk of default. If the U.S. were to default on the instruments held by the Social Security, interest rates would likely dip, as the purchasers of instruments sold at auction realized that fewer or smaller checks were being mailed out to S.S. recipients. As to the constitutionality of such action, well, that’s up to what five people in black robes say, isn’t it? It is quaint to think of the language in the document acting as a constraint, however. Kinda’ makes me nostalgic…..

  16. Rob Lyman said,

    Njorl,

    If the debt is to be honored, it will require big tax increases or big cuts in other areas of spending. That’s a serious problem the taxpaying nation has to face, even if “Social Security” as an entity doesn’t have to face it (in theory).

    Playing accounting games by saying the “general fund” has a problem but “Social Security” does not is precisely the sort of behavior that killed Enron. Only on a much large scale.

  17. Njorl said,

    The “Game” is saying that social security has a problem when it is the general fund that does, not the other way around. Your Enron example is perfectrly illustrative of this and undercuts your own argument.

  18. Rob Lyman said,

    Njorl,

    Now I’m confused. Enron moved large amounts of debt to Special Purpose Entities so that its balance sheet would look good. That turned out to be a bad idea because, in the end, what mattered was the profitability of the business as a whole, not the the balance sheet of but one of its components.

    Social Security moves large amounts of debt (well, future liabilities) off the books by assigning those liabilities to the Treasury at large. Now, I happen to think what matters most is the overall balance taxes vs. payments for all federal government subdivisions, because I, as a tax payer, have to pay all of those debts in the end, regardless of how they are dressed up or subdivided.

    I fail to see how my Enron example undercuts my argument. Enron had a problem, regardless of how it shuffled paper debt. Social Security has the same problem, regardless of how it shuffles its debt.

    By your logic, we could fund the Iraq war by having the Pentagon sell war bonds to the Social Security Administration, and thus be able to claim that both the war and Social Security were fully funded, so what are people whining about?

    But in the end, the cash comes from somewhere. Where it comes from is far less important than how much cash it turns out to be.

  19. John Thacker said,

    “interest on the national debt”

    Why? From an economic perspective, I have difficulty seeing the point of worrying about the interest on the national debt, per se.

    Surely the interest on the national debt is merely the way of appropriately measuring the time value of money. By borrowing the money, we have the money now instead of later. In order to reduce the interest, one would have to pay back the debt. That would mean forgoing spending or raising taxes in a dollar amount whose present value is, mirabile dictu, equal to the value of paying it back in the future plus paying the interest all those years. Indeed, the interest rates that the government receives are lower than any other interest rates, certainly lower than could be received in the private sector. Thus the government’s discount rate is different than that of its citizens, and hence it would make sense in certain situations for a government to borrow if its citizens would borrow otherwise otherwise.

    The interest on the national debt merely measures that any debt now has to be paid back in the future via taxes or reduced spending, subject to normal discounting. The problem is not the interest, no. The problem is the inefficiencies; the deadweight loss of the taxes imposed now or in the future, the deadweight losses of various government spending, the deadweight losses of regulatory capture, and the inefficiencies caused by money spent on lobbying and the like. (And other things where the broken windows fallacy applies.)

  20. John Thacker said,

    And thus, raising taxes now to pay off the interest is no good, if the taxes raised incur a large amount of deadweight loss. It does us no good to pay them nominally. It does us good to change our tax structure so that taxes are efficient, or make spending more efficient. (Such as by removing perverse incentives built into Social Security and Medicare.) But there is no gain from paying off the debt now in exactly the same manner as we’d pay them off in the future.

  21. Njorl said,

    “Social Security moves large amounts of debt (well, future liabilities) off the books by assigning those liabilities to the Treasury at large.”

    In case you hadn’t noticed, the United States is not a subsidiary of Social Security.

  22. Rob Lyman said,

    In case you hadn’t noticed, the United States is not a subsidiary of Social Security.

    No, SS is a subsidiary of the US. Doesn’t change my argument at all, to which you haven’t once actually responded: taxpayers foot the bill for both the US and SS. If SS being “fine except under worst-case assumptions” depends on the Treasury being “in crisis even under best-case assumptions” then complacency about SS will lead to disaster.

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