Category: Budget

China Releases 2008 Defense White Paper

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Not surprisingly it shows an increase in spending, and far more focus on the application of the military in non warfare situations than the US military.

The Chinese see the use of their military in peacekeeping and aid situations as a necessary adjunct to their diplomacy, while the US military does its level best to stay within the bounds of “kinetic” warfare.

Certainly, China sees its military as a way to increase its diplomatic status and prestige.

Still, it’s an interesting picture of what really is the only near term meaningful military rival.

JSF Breaks Nunn-McCurdy Limits

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Which means that the F-35 Joint Strike Fighter is massively over budget.

They have finally gotten to the point where they cannot use accounting tricks to cover this up.

I expect the unit cost to rise sharply now, and be near that of the F-22.

A number of people have been predicting this, most notably the House Appropriations Committee, who have been pushing for more Super Hornets, and the DoD, who were trying to accellerate purchases, doubtless to beat this announcement. (paid subscription required)

DNI Would Minimize Contractors

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Adm. Dennis Blair, the nominee for Director of National Intelligence, told the Senate Select Committee on Intelligence that, “one of his first duties if confirmed will be to transfer to federal employees any ‘inherently governmental’ work being done by contractors:

Blair said the government should rely on contract interrogators only in special circumstances, such as when a suspect speaks an obscure dialect.

“My strong preference is that interrogators in the intelligence world be a professional cadre of the best interrogators in the business,” Blair told the Senate Select Committee on Intelligence during his nomination hearing.

Committee chairwoman Sen. Dianne Feinstein, D-Calif., said she supported Blair’s call to reduce the intelligence community’s reliance on contractors. She referred to a 2007 Office of the Director of National Intelligence study that found that 27 percent of the intelligence work force is comprised of contractors, and an individual contractor costs the government $80,000 more on average than a career employee.

“I find this unacceptable,” Feinstein said. “Hiring contractors to interrogate detainees and contract psychologists to evaluate [them] is just the wrong thing for the government to do.”

Now if only we can apply this to the rest of the government, particularly the DoD.

New York State Unemployment Insurance Goes Broke

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They are now cutting checks on emergency loans from the federal government.

We will see more of this.

Note that New York state has among the most meager unemployment benefits in the region.

Additionally, the insurance rates charged, and the salary based used, are among the lowest in the region too, which means that the finances are precarious in the best of times.

With Democrats holding both houses now, this needs to change, and income taxes on higher earners should go up too.

And while we are at it, a Texas Style redistricting, since the NY state ‘Phants gerrymandered themselves into a State Senate majority for the past 30 or so years. (Seeing as how Dems hold a 26-3 lead in the House of Representatives, that can slide until the next census)

Stimulus Bill Draft Released By Democrats in Congress

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You can find the full text here.

My quick take, is that I would like to see:

  • More rail investment.
  • More mass transit investment.
  • That the $32 billion for, “to transform the nation’s energy transmission, distribution, and production systems by allowing for a smarter and better grid,” sounds like a giveaway to the electric utilities.
  • The money for broad band should be better defined, so that it goes to public and cooperatively owned agencies and infrastructure only….We already threw billions at the incumbent telcos in the late 1990s/early 2000s with little in the way of results.
  • Flood control is almost always a synonym for pork.
  • The spending on schools should target the poorest districts.
  • The increases in unemployment benefits are the most bang for the buck in generating economic activity, and the increase in food stamps is a close second.
  • I think that the tax cuts are a lose.

That’s based on a 15 minute read of the summary, though.

Upgrading Freight Rail as Stimulus

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Phillip Longman makes the very good point that while people are talking up bullet trains, they are ignoring freight rail infrastructure.

I used to work as an engineer at GE Transportation Systems* on their locomotives, I was Lead Engineer on the Blower Cab Structure on the AC6000 Locomotive, and as a result, I consider myself to have some background in this industry.

Simply put, it is easier, cheaper, and faster to upgrade or repair existing for rail, and medium speed (say less than 150 km/h) rail than it is to construct new rail for what Atrios calls “Supertrains”.

Cargo transport is energy inefficient in the US, and the upgraded infrastructure would increase speeds, even for short haul passenger rail, and reduce accidents.

Best of all, this is all shovel ready, you don’t need an environmental impact statement, or to go before a planning board, or to seize land by eminent domain to repair and upgrade rail lines.

*Yes, I have worked everywhere. Maybe I can’t hold down a job, but more likely this has been my role as “technical hit man”, where you are parachuted in to take care of a specific need.

Not Shovel Ready, Wrecking Ball Ready

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Calculated risk makes a very good point on any potential economic stimulus plan, you don’t just have to spend on building things, you can spend on tearing them down too.

He’s talking about spending money to demolish houses in neighborhoods with high vacancy rates.

They are actually doing this in Youngstown, where the city council has finally abandoned hairbrained growth schemes, and they are pulling down phone lines, demolishing roads, and buying people out from abandoned neighborhoods so as to live within their means.

Spend it on Rail

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John Judis at The New Republicmakes a good point*, that the stimulus package should be used to expand rail.

While there is an obvious argument to be made about how quickly one could get new high speed rail projects off the ground, the fact is that there is a lot of track maintenance and track upgrades that could be done very quickly.

Tracks for 200 mph trains take a while, but upgrading tracks to handle 100 mph passenger rail requires a lot less time.

Bullet trains would be nice, but more Acella lines would be a very good start.

*Yeah, I know, The New Republic and the phrase, “good point” don’t generally go together, but even a stopped clock is right twice a day.

And on the Other Side of the Congress

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Pelosi has the right idea.

She is arguing for immediate repeal of tax cuts for people making more than $¼ million a year.

I like this for 2 reasons:

  • It’s good policy.
  • It’s an even better place to start negotiations from.

The you only need two republicans, plus Uncle Joe Lieberman, to get this through the Senate, and you do not even need them on a budget bill, though there other 60 vote (actually 59 right now with 2 vacant seats) hoops to jump through.

Things I Learned from David Frum

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Basically it’s that if he makes a statement, he is at best being deceptive, and worst completely inaccurate, note my little complaint letter to Marketplace about his inaccuracies of discussions regarding European fighter aircraft.

So, I heard him on Marketplace condemning Obama’s suggestion of improved unemployment benefits, and thought, “If he hates the idea it must be a good one.”

So a trip to Google News, and then to the New York Times for the details on the proposal.

I was right, it’s pretty good:

  • Extended unemployment insurance.
  • Subsidies for employers to help laid off employees with health insurance via COBRA.
  • Medicaid for laid off employees without health plans, and hence COBRA.

These are all good things.

If the ‘Phants Can’t Kill the Stimulus Package

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They will do their level best to ensure that whatever passes is so broken as to be useless.

Case in poiny, Mitch McConnell is suggesting that instead of revenue sharing grants to the states, that they be loans:

But back to my original point: This idea was tried once before, in the depths of the Depression. In 1932, Congress appropriated $300 million to the Reconstruction Finance Corporation to send to the states for unemployment relief. (Unemployment insurance did not exist until the Social Security Act of 1935 was passed). Unfortunately, Herbert Hoover’s RFC didn’t offer the funds to the states as grants but as loans. Already all-but-insolvent, many states didn’t take the offer. And the economy continued its plunge into the abyss.

This is Mitch McConnell’s idea of a policy worth reviving.

I would note that for a non trivial number of states, I think that it’s around 15, this loan would not allow them to prevent draconian cuts in services, because they are not permitted to take out loans for operating expenses, only for capital investments.

These folks are not concerned that a stimulus package will not work, they are concerned that it will work, because if government works, then they are fracked politically.

Obama Decides to Try to Kowtow to Republicans

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Well, it now appears that Barack Obama is looking at about $300 billion of the stimulus package being taxcuts.

Why? Because he wants to get more than 80 votes in the Senate.

This is delusional, and it is wrong. The Republicans don’t care about making government work for the people, and if it doesn’t work, he will get the blame anyway.

Anything worth passing will not get Republican votes. Obama need only remember that Social Security passed without a single Republican vote….Not one.

I agree with Josh Marshall when he says, “Can someone help me come up with an argument for why the Obama stimulus plan isn’t turning out to be a painful joke?“

The Shrill One, Paul Krugman, makes the best point on his blog:

Look, Republicans are not going to come on board. Make 40% of the package tax cuts, they’ll demand 100%. Then they’ll start the thing about how you can’t cut taxes on people who don’t pay taxes (with only income taxes counting, of course) and demand that the plan focus on the affluent. Then they’ll demand cuts in corporate taxes. And Mitch McConnell is already saying that state and local governments should get loans, not aid — which would undermine that part of the plan, too.

He follows up with another good point in his column, that Republicans are already, “setting up roadblocks to stimulus legislation while posing as the champions of careful Congressional deliberation,” and then he follows up with the point that action needs to be taken quickly, and Republicans have no interest in taking action at all.

They believe that action in and of itself is evil.

Hilzoy notes, tax cuts give among the smallest GDP bang for the buck:

The Post-Soviet Politicians are Dancing to a Non-Existent Tune

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I used to think that John Paul II’s jihad against the church working for the poor, going so far as to expel priests who were causing right wing despots grief, which pretty much repudiated 1800 years of church history was an anomaly.

JP2 clearly hated the Soviets, he hated communism, and it left him with an antipathy to anti-poverty action by the Roman Catholic Church.

I had kind of hoped that other folks who objected to the excesses of Communism, and those excesses are legion, had found perspective if they had remained in leadership positions.

Now, in the middle of the greatest economic crisis in 3 generations, we are seeing leaders who grew up in former communist nations trying to turn to Hoovernomics, because they have a visceral revulsion to anything that remotely looks like economic management by the state.

It doesn’t matter if the most successful model in fixing this has been the Swedish model, state capitalization and take over followed by sale when the conference is over, it’s just too pink for them.

In the first case, we have Czech President Vaclav Klaus, who appears to be trying his level best to destroy any coherent EU response to the economic crisis:

Klaus, an admirer of Milton Friedman and Margaret Thatcher, says “excessive state intervention” and “irresponsible increases of state expenditures” are behind the global financial crisis, according to an October commentary he wrote for Mlada Fronta Dnes newspaper.

Hoovernomics as driven by what are now archaic anti-Soviet and anti-Communists.

And let us not forget Angela Merkel, who is content to (mis)manage the largest economy in the EU, and also continues to go the Hoovernomics route:

With battle lines sharpening, the German government appears determined to resist calls to spend an additional €40 billion to fight its way out of the recession, according to officials attending a meeting in the Chancellery in the past week.

It appears that in the case of Merkel, there has been extensive lobbying from what amounts to the German Chamber of Commerce to lower taxes, but that is were she wanted to be in the first place, until other EU members dope slapped some sense into her.

I’m wondering how true this is of a generation that lived through a revolution.

If the US founding fathers were the exception, we were very, very lucky.