By Dave Anderson:
Earlier in the week, Ian was pessimistic, and that makes me tremble as his track record on getting the big picture right.
The RNC is asking for 2.5 trillion in spending cuts over 10 years. Assume Obama and Dems split the difference (remember, Obama wanted a freeze already, anyway). 1.25 trillion.
However, it looks like the State of the Union pre-leaks indicate that Ian is a bit optimistic on the level of dumbness that is our elite political-economic discourse.
The initial counter-offer from Obama is a five year non-defense, non-homeland security, discretionary spending freeze. Assuming a three percent nominal growth rate from a FY-11 non-defense, non-homeland security base of $553 billion, this works out to $170 billion over five years. However, I am lowballing typical spending growth at three percent because spending growth tends to track well with nominal GDP growth, so even 3% increases means decreasing government services due to the combination of population growth and mild inflation. Over a ten year year period, this offer is worth about at least $800 billion dollars.
So why is Ian being optimistic?
Obama has just established the "left wing" budetary position as 'gentle austerity', so the flaming douchebags in the Senate will need their nice big round numbers of flesh to proclaim their distance from the dirty fucking hippies, and all of sudden $100 billion to Lieberman, another $75 billion in cuts to satisfy Nelson #1, and $50 billion for Nelson #2, $250 billion for the Maine Duo, and we are talking about a number far closer to $2 trillion than $1 trillion over ten years.
I get scared when Ian is optimistic.....
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