“Freeze”? Not perzackly

An overall budget cap isn’t a “freeze.”

A spending freeze is a stupid idea.  Fortunately, as far as I can tell, Barack Obama does not in tend to propose one.  He’s proposing an overall budget cap on discretionary non-security spending, but intends to move money around within that cap.  If he’d called it “cut and invest,” there wouldn’t be quite such howls of outrage.

I’m still not happy; the notion that “security” is a different, sacrosanct budget makes no sense, and I’d like to see the federal government doing more in lots of discretionary non-security areas, starting with a bigger NSF budget.   But there’s less here than meets the eye.  And it’s hard to see how Obama could have convincingly gone after some sacred cows without announcing a hard budget constraint.  We’ll know more when we see the actual budget, but right now I see no reason for despair.   Who knows?  We might see some cuts in farm subsidies and NASA.

Author: Mark Kleiman

Professor of Public Policy at the NYU Marron Institute for Urban Management and editor of the Journal of Drug Policy Analysis. Teaches about the methods of policy analysis about drug abuse control and crime control policy, working out the implications of two principles: that swift and certain sanctions don't have to be severe to be effective, and that well-designed threats usually don't have to be carried out. Books: Drugs and Drug Policy: What Everyone Needs to Know (with Jonathan Caulkins and Angela Hawken) When Brute Force Fails: How to Have Less Crime and Less Punishment (Princeton, 2009; named one of the "books of the year" by The Economist Against Excess: Drug Policy for Results (Basic, 1993) Marijuana: Costs of Abuse, Costs of Control (Greenwood, 1989) UCLA Homepage Curriculum Vitae Contact: Markarkleiman-at-gmail.com

25 thoughts on ““Freeze”? Not perzackly”

  1. What you seem to be implying, Mark, is that this "freeze" is a political stunt. I thought we were done with those. Where's the change we can believe in?

  2. I'm more than unhappy – I'm pissed that security gets a free pass while the rest of the budget has to rob Peter to pay Paul.

    If a freeze is good at wringing out bad stuff from domestic, it's good for the military.

  3. Who knows? We might see some cuts in farm subsidies and NASA.

    Yes, Mark, the Senate has been disbanded.

  4. ". . . it’s hard to see how Obama could have . . ."

    This has become a vice.

    It is actually easy to see how Obama could announce major cuts to defense and security spending, to fund sensible domestic priorities. Easy to see, except for the fact that he is choosing not to do that.

  5. NASA is the only thing that the US is still best in the world. But NASA=kennedy, and Obama needed to shit on him, too.

  6. I also hope NSF will not be cut.

    Why wouldn't Obama start by asking the "moderate" democrats to volunteer cuts in their pet projects

    (farm subsidies, etc.). Let's them walk the walk first and the rest will follow…

  7. Mark Kleiman: "We might see some cuts in farm subsidies and NASA."

    Mark, if those two are put in the cuts basket together, which do you expect to take the hits?

  8. So lets all hope that our President is a transparently venal coward with no substance to what he says he'll do. And, on top of that, that he's retarded, given that the politics of what he says offer plenty of losses and no gains at all. Right partisans will remain right partisans, people on the left and intelligent people will mark the President's words as inane drivel and lose what little faith they have left, and Joe Lieberman will give the President a secret blow job.

    The President Joe Lieberman we have may not be President Palin, but, in the long run, he's every bit as stupid and destructive. Worse, really, because he makes an effective Democratic party in the future much less likely.

  9. NASA is hardly the same thing as farm subsidies. What Obama needs to face is the nasty fact that we can no longer afford to spend as much as the rest of the world does on weaponry.

  10. Do you get nothing? Nothing?

    Look, what matters most in today's environment is that Obama is seeking to freeze OVERALL spending. If you've understood even the slightest particle of Keynesian theory, you should get that what really counts in a major economic downturn like this is that DEMAND MUST BE INCREASED. The way to increase demand is to INCREASE SPENDING. It mostly doesn't matter what the money is spent on; Keynes, as I recollect, talked about digging holes and filling them as being adequate to the purpose.

    Acting as if it doesn't matter that Obama is seeking to freeze spending because he still can allocate the monies in somewhat different ways is nothing but economic ignorance of the most basic kind.

  11. An Observer, you ARE aware that, according to Keynsian theory, we should have been running a freaking SURPLUS prior to the recession?

    Surpluses in good times, deficits in bad times. That's Keynsian counter-cyclical policy. Deficits ALL THE FREAKING TIME isn't Keynsian policy, it's just proof we're governed by people who have no impulse control.

    IMO, that's why the stimulus has been so notably ineffective, aside from the fact that the spending was designed to reward political allies instead of stimulate: A bottle of Dew wakes you up pretty good in the morning. It jolts you back awake in the afternoon. Several will help you pull an overnighter. But keep drinking it, and in a few days the only effect is that you piss in your sleep.

    Stimulus eventually stops working if you do nothing but stimulate all the time.

  12. Obama really owes a lot of people an apology, but just like Mark who refuses to apologize for his stupid use of "infantile" (while exhibiting the most infantile analysis of this spending freeze proposal I have yet to see) , he won't.

  13. About what, Observer? My belief that we've been running deficits, 'stimulating' for the better part of a decade now, or my understanding that Keynsian counter-cyclical spending calls for countering the bad time deficits with good time surpluses to pay them down?

    Or do you just figure that we can run deficits forever, and they'll always stimulate?

  14. Cutting NASA and those thinks are not the solution. The solution is to stop importing and start manuafacturing products in the USA. And second, stop all the high priced money spent on political elections. Money even donated, can be used for a more produtive use in this country.

  15. I'm not Brett's biggest fan, and I rarely agree with him, and his 6:52 comment was unnecessarily graphic and (IMO) unfair to the Stimulus (it suffered from politics, but in timing and in which socioeconomic groups it helped, not especially in targeting to political allies).

    All of those caveats aside, it is indisputably true that Keynes praises deficit spending as a countercyclical move, not as something to be done in good times.

    Of course, the last President to achieve this was, well, Bill Clinton. And if it weren't for the payments on Reagan's national debt, Clinton would have slain the deficit years earlier (and don't blame his Democratic Congresses; they consistently approved less spending than he requested).

  16. Who was it that wasn't running a surplus? That was Bush, right? Clinton did run a surplus, and that bothered Greenspan a lot.

    Bush just wanted to make sure that it would be harder to deal with the crisis he was preparing for us, as Naomi Klein has said. Not only did he give us a disaster (financial meltdown), but he (and Greenspan) crippled our response.

    People say that Obama's freeze is meaningless, and in a sense it is, but he's definitely telling us that there will be no cuts in military funding and no more stilumus, and that's a lot.

    And probably no new taxes either, though that isn't as clear. Pres. McCain would have done the same.

  17. Brett Bellmore says:

    "An Observer, you ARE aware that, according to Keynsian theory, we should have been running a freaking SURPLUS prior to the recession?"

    Yes. Have You frikkin' noticed the GOP policies of your entire adult life?

  18. Yes, and Democratic, too. Neither party is worth a bucket of warm spit when it comes to balancing the budget. A Democratic President and Republican Congress at each other's throats during a stock market bubble seems to work, briefly, but how to arrange it?

    My point here is that you can't defend the stimulus as an example of Keynesian policy. Keynesian policy isn't just to run deficits during recessions, it involves NOT running them inbetween. Why assume that deficit spending is going to be equally stimulating in year 8 or 9 of continuous deficits, as it would have been in year 1? We're not operating in Keynesian territory here. We're a meth addict taking a shot at the end of a binge, and wondering why it's not working.

    Putting down the hypo would have been the first real policy act I'd have respected Obama for, if it hadn't, predictably, been another lie.

  19. Actually, the plan for NASA is to start contracting out the rocket/spacecraft building part. I'm sure that will save the government loads of money–at least the former CEO of Lockheed Martin says it will.

  20. Interesting chart, which records who was in the White House, but, conspicuously, not who was in control of Congress. But if you want, I'll concede that the Democratic party IS about worth a bucket of warm spit when it comes to balancing the budget.

  21. Clinton only showed a surplus because he fudged lots of numbers, when will people figure out its not about left or right? You want change? You have to recognize that first, its all a freaking show to keep you fools fighting while they loot the hell out of the country, we are in an economic crisis worse than the great depression, no amount of fiat money spent by the government is going to improve it, we are only screwing ourselves, the only good i see coming out of this is that keynes will finally be shown as the fool he was and perhaps people will finally look into the austrian theory of economics, and perhaps some of you schmucks will finally see the parties as what they are. Oh and when the charade does end, you won't be worrying about domestic or military spending. The budget needs to be cut by 2 trillion dollars, i mean don't you people even start to question things when we are running 1.7 trillion dollars in the red? Or is the number just so big that it doesn't register? They keep calling it the great recession, but answer me this, when have we ever had a recession when we've had to spend that much money? Go back forever, you won't find an example!

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