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April 9, 2014

Jonathan Tobin: Why Did Kerry Lie About Israeli Blame?

Samuel G. Freedman: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Jessica Ivins: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Kim Giles: Asking for help is not weakness

Kathy Kristof and Barbara Hoch Marcus: 7 Great Growth Israeli Stocks

Matthew Mientka: How Beans, Peas, And Chickpeas Cleanse Bad Cholesterol and Lowers Risk of Heart Disease

Sabrina Bachai: 5 At-Home Treatments For Headaches

The Kosher Gourmet by Daniel Neman Have yourself a matzo ball: The secrets bubby never told you and recipes she could have never imagined

April 8, 2014

Lori Nawyn: At Your Wit's End and Back: Finding Peace

Susan B. Garland and Rachel L. Sheedy: Strategies Married Couples Can Use to Boost Benefits

David Muhlbaum: Smart Tax Deductions Non-Itemizers Can Claim

Jill Weisenberger, M.S., R.D.N., C.D.E : Before You Lose Your Mental Edge

Dana Dovey: Coffee Drinkers Rejoice! Your Cup Of Joe Can Prevent Death From Liver Disease

Chris Weller: Electric 'Thinking Cap' Puts Your Brain Power Into High Gear

The Kosher Gourmet by Marlene Parrish A gift of hazelnuts keeps giving --- for a variety of nutty recipes: Entree, side, soup, dessert

April 4, 2014

Rabbi David Gutterman: The Word for Nothing Means Everything

Charles Krauthammer: Kerry's folly, Chapter 3

Amy Peterson: A life of love: How to build lasting relationships with your children

John Ericson: Older Women: Save Your Heart, Prevent Stroke Don't Drink Diet

John Ericson: Why 50 million Americans will still have spring allergies after taking meds

Cameron Huddleston: Best and Worst Buys of April 2014

Stacy Rapacon: Great Mutual Funds for Young Investors

Sarah Boesveld: Teacher keeps promise to mail thousands of former students letters written by their past selves

The Kosher Gourmet by Sharon Thompson Anyone can make a salad, you say. But can they make a great salad? (SECRETS, TESTED TECHNIQUES + 4 RECIPES, INCLUDING DRESSINGS)

April 2, 2014

Paul Greenberg: Death and joy in the spring

Dan Barry: Should South Carolina Jews be forced to maintain this chimney built by Germans serving the Nazis?

Mayra Bitsko: Save me! An alien took over my child's personality

Frank Clayton: Get happy: 20 scientifically proven happiness activities

Susan Scutti: It's Genetic! Obesity and the 'Carb Breakdown' Gene

Lecia Bushak: Why Hand Sanitizer May Actually Harm Your Health

Stacy Rapacon: Great Funds You Can Own for $500 or Less

Cameron Huddleston: 7 Ways to Save on Home Decor

The Kosher Gourmet by Steve Petusevsky Exploring ingredients as edible-stuffed containers (TWO RECIPES + TIPS & TECHINQUES)

Jewish World Review March 17, 2011 11 Adar II, 5771

A budget analogy that earns a Geppetto checkmark

By Glenn Kessler




http://www.JewishWorldReview.com | “For every $10 that the federal government collects in tax revenue, it is borrowing about $7. And just to put that into perspective, if you're a family making $50,000 a year, that would be like borrowing $35,000 every year.”

--Rep. Cathy McMorris Rodgers (R-Wash.), March 15, 2011

 

At a news conference Tuesday, House Speaker John Boehner (R-Ohio) urged quick action on a final spending bill for the current fiscal year. Among the speakers who joined in his call for action was Rep. Cathy McMorris Rodgers, the vice-chair of the House Republican Conference. She offered the rather arresting image of a family borrowing nearly as much as it made “every year.”

 Does her statistic have merit?

The Facts

 Let’s look at the charts contained in the president’s budget. For the current fiscal year, the budget anticipates receipts of nearly $2.2 trillion, and the deficit (that’s the borrowing) of $1.6 trillion. So for the current fiscal year, she is right—the United States is borrowing $7 for every $10 in tax revenue.

But note that she likened this to a family doing it “every year.” She is in the ball park, at least for the previous two years. The ratio was almost $7 of borrowing for every $10 of revenue in 2009, and then it was 6 to 10 in 2010. 

 In all three years, it’s very simple why the ratio became so off-kilter—the double whammy of plunging tax revenue because of the recession and the various bailouts and the stimulus bill.

 But looking forward, her analogy starts to break down. In 2012, when tax revenues are expected to jump as the nation’s emerges from the recession, the ratio drops to just $4 of borrowing for every $10 of revenue. By 2013, the ratio would be 3 to 10.

 Todd Weiner, a spokesman for McMorris Rodgers, said that the three-year trend from 2009 to 2011 makes her statement valid. “As for the next few years, without serious spending cuts, there will continue to be massive deficits for as far as the eye can see.  Whether that will produce a 10-to 7 ratio or a 10-6 ratio or something else cannot be known,” he said.

 As we have outlined before, there are budget gimmicks in the White House’s numbers, and so the upward path should be taken with a grain of salt. But the Congressional Budget Office Budget Outlook issued in January also shows a similar improvement in the ratio, starting in 2012. Again, the reason is not because spending decreases substantially, but because revenues once again begin pouring into federal coffers.

 Borrowing, of course, can be a good thing, particularly if it is used for investments. A family making $50,000 a year would not be able to afford a car or a house if they did not borrow money from the bank. But as Rep. McMorris Rodgers said, it would not be a good thing to buy a car every year.

 Moreover, it is worth noting that the spending bill McMorris Rodgers  and Boehner are promoting would actually do very little to affect this ratio. The $61 billion in proposed cuts amounts to just 25 cents of savings in her analogy, meaning that even after the cuts the family still would be borrowing $6.75 for every $10 of revenue. That’s because the real savings in the budget is not in a discretionary part , funded year by year, but in the mandatory spending programs on autopilot, such as Medicare. A boost in revenues, such as through eceonomic growth, would also greatly shift the ratio.

 

The Pinocchio Test

 

Congratulations to the gentle lady from Washington. She earns a rare Geppetto Checkmark.


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An award-winning journalism career spanning nearly three decades, Glenn Kessler has covered foreign policy, economic policy, the White House, Congress, politics, airline safety and Wall Street. He was The Washington Post's chief State Department reporter for nine years, traveling around the world with three different Secretaries of State. Before that, he covered tax and budget policy for The Washington Post and also served as the newspaper's national business editor. Kessler has long specialized in digging beyond the conventional wisdom, such as when he earned a "laurel" from the Columbia Journalism Review



Previously:

03/10/11: Four pinocchios for the American public on the budget

03/09/11: Obama and the White House's ‘halfway’ fixation with the budget

03/08/11: Foreign policy braggadocio on Libya and AIDS

03/07/11: Democrats keep misleading on claimed budget ‘cuts’

03/01/11: Mike Huckabee is on to something here, but jumped the gun

02/25/11: Harry Reid's illusory $41 billion in budget cuts


© 2011, Washington Post