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Budget Puzzle: You Fix the US Budget

190 points by ojbyrne 16y ago

zaphar 16y ago
Of course no truly creative solutions are allowed in the puzzle. It really only serves to illustrate how impossible it is if you stay within the bounds of the current political climate. Not to mention it's a rather limited view of the problem not really taking into account the various feedback loops each option has when it feeds back into the economy and thus back into taxes collected. Even with all of that said though I like seeing these kinds of exercises brought to the public to raise their awareness of the issues. I really don't envy our gov't leadership trying to solve this problem. The sheer number of variables make it almost impossible to truly predict the result of any action.
- Encosia 16y ago
  I agree that it's too simplistic to ignore the chain reaction of side-effects those changes would have. I also agree regarding creative solutions, though how would you even begin to put a user-friendly interface on that? That said, it was not difficult to find an acceptable solution. As I started, I thought the moral of the exercise was going to be how hard a problem this is. As it turned out, I had a solution less than 2/3 of the way into the list.
  - Benjo 16y ago
    If you could quantify the actual effect each change would make, it wouldn't be that hard politically to reach an actual solution. The problem is that political noise makes it very difficult to convince anyone that you are making a reasonable estimate.
  - eru 16y ago
    They bias you towards spending cuts, by putting them first on the list. At least that's how I felt. (But I am more in favour of spending cuts anyway.)
  - jorgeortiz85 16y ago
    Yes, but given all the interests groups affected by the choices, could you get 2/3rds of the Senate to agree with your solution?
    - Encosia 16y ago
      Maybe not. At the same time, they eventually aren't going to have a choice, and waiting only deepens the inevitable cuts. I don't subscribe to any of the Beck-type fear and paranoia, but I do believe our legislators are going to find their employer insolvent if they don't work together to get our finances in order.
- devmonk 16y ago
  Agreed. What if we: - Developed and focused on a small set of specific goals for the U.S. government. - Eliminated most of the IRS and replace our current taxes with a graduated sales tax. - Cut the myriad of handouts to various organizations that our government makes in one form or another every year. - Developed and supported sustainable agriculture. - Eliminated the public education system but provided allowances such that every child can get an education tailored to their abilities and desires, and advance at their own speed rather than the speed of their class. - Eliminated most of the FDA, DEA, and other enforcement agencies, with the exception of the FBI, and allow our judicial system to imprison employees of companies found responsible for knowledgeably harming citizens simply using trial by jury, and replace bail/monetary remedies with prison sentences only. - Focused efforts on planetary defense and colonization of other worlds via a beefed-up NASA whose purpose is to support private space enterprise. - Allowed individuals at businesses to be sued rather than the company itself, for which there would exist no legal entity. Of course, they won't do these things, but since they are asking...
  - eru 16y ago
    > - Allowed individuals at businesses to be sued rather than the company itself, for which there would exist no legal entity. Interesting. What problem would this proposal solve? You had this legal situation earlier in the US. The problem was, that the consumer could not pinpoint who to sue. That's a horrible incentive to make the structure of who did what in your company totally non-transparent.
    - devmonk 16y ago
      But the current remedy of a non-human legal entity is that the entity can be sued and affect many people adversely who weren't responsible for the wrong. We need a different remedy, like the ability for a citizen to sue every citizen belonging to an organization together if the organization was found responsible for the wrong. Then those citizens not responsible in that organization would have to have witnesses and documentation to prove that they were not responsible for the wrong. And instead of sueing, I think that prison sentences would work better. Putting all responsible persons from a company into prison would get people's attention. Also, citizens and lawyers producing substantial litigation without merit would be imprisoned.
- bilbo0s 16y ago
  "...it's a rather limited view of the problem not really taking into account the various feedback loops each option has when it feeds back into the economy and thus back into taxes collected..." This would be a difficult thing to do. What would be an acceptable model for these feedback loops? Given that, at the end of the day, the budget MUST balance. Let's say we all agreed that cutting taxes X%, would have a Y% chance of increasing tax revenue Z% over W number of years. How do we know that? Or, more precisely, what is the probability ratio that we assign that node in the decision tree? Y, right. Now if Y is not 1, then we do not KNOW that the budget will be balanced at date W. My point is, when modeling economic feedback loops 'Y' is rarely 1. So I think what they are saying is, given the serious nature of the current economic shortfalls, they will confine the discussion to only those cuts whose savings can be assigned a probability ratio of 1 in the decision tree. I think they would readily concede that this leads to 'non-creative' solutions. But the output of that decision tree is also guaranteed to work if implemented.
  - lukeschlather 16y ago
    Nothing on that list has an obvious probability ratio of 1. This is world politics, not a computer simulation. Most government services provide a safety net for minimal-income workers. You take that away, the lower class could quickly become insolvent, threatening our entire social structure. Obviously I'm specifically hitting entitlement, but all government services have people who rely on them, and in most cases the government does them more efficiently than private business can. Military spending secures the US role as world superpower. You take that away and businesses working abroad have a much harder time creating factories with exploitative labor pricing. Prices rise. There is a possible good outcome where factories are forced back into the states, but it's a gamble. Take that stuff away, there's barely 100 billion worth of cuts with a probability ratio with anything approaching 1.
    - eru 16y ago
      > Military spending secures the US role as world superpower. You take that away and businesses working abroad have a much harder time creating factories with exploitative labor pricing. Prices rise. Sounds very outlandish to me. But then, by that understanding, say, Germany is probably just freeriding on American oppression.
- Retric 16y ago
  impossible? I fixed the budget before getting 1/2 way down the list. I am fairly liberal and I am more than willing to gut medicare let alone the minor changes they are suggesting.
  - zaphar 16y ago
    sure you fixed it by ignoring political realities and making choices purely based off of how much money each choice would free up. It's easy if you do it that way. Now try and do it in a way that isn't political suicide and doesn't put the nation at risk abroad.
    - flogic 16y ago
      Well political realities make it almost impossible. Not putting the nation at risk is doable.
  - Locke1689 16y ago
    I am very liberal and managed to do it by making modest reductions in military expenditure, capping Medicare, giving a 2015 date for Iraq/Afghanistan withdrawal, and returning most taxes to Clinton levels.
  - dagw 16y ago
    Balancing the budget is trivial. Balancing the budget AND getting re-elected, that is tricky part.
- tibbon 16y ago
  On this concept of feedback loops- do politicians take them into account? Looking at US politics, I strongly feel that members on both side of the aisle look primarily at what is immediately accessible and rarely at long term effects or accountability. Sure, they make drafts, bills laws and propositions that mention things to take effect at some far out date- but that doesn't really mean that they are themselves looking at realistic feedback loops, but rather just what charged issues they can drive against the other side to appease their constituency on their far side. Take DADT, or Same-Sex Marriage. The feedback loop of realistic long-term consequence of them items against other people are likely close to zero. Facts reported in a (leaked) report due to Obama soon seem to point that the effect on the armed forces would be minimal- in my guess probably similar to integrating minorities into the armed forces. The long term effects would be the increased mental health of valued service members, and an increased pool of people that could serve. Yet, R's rally against it, pointing to odd and unfounded rhetoric that is held firmly in just keeping things frozen culturally and socially. They don't look at the long term effects, or even at the fact that some homosexuals might consider voting for them if they backed the bills. It is possible that this isn't the best example, but do politicians really look at feedback loops and probability? No, I don't think so. They look at the feedback onto the next election and that's about it.
  - barrkel 16y ago
    They look at what they're motivated to look at, and the people who elect them, in the large, only see headline soundbites in campaign literature. Democracy has relatively little incentive to look at the long term or second-order effects, especially long term benefits that have short term costs. Instead, policies wander back and forth like a pendulum, going too far in each direction, and only changing direction in response to crises. Occasionally the oscillation gets too extreme, and very bad things happen.
Dilpil 16y ago
Wow, this has an utterly horrible interface. The way it bobs up and down as a I scroll is quite appalling. I'd rather have frames than this.
- Benjo 16y ago
  It doesn't "bob" for me in Chrome.
  - kmfrk 16y ago
    Nor here. Maybe a developer version of Chrome is responsible?
    - Groxx 16y ago
      It's just because NYT is positioning the chart stupidly (but probably most-reliably, knowing browsers...). It's absolute-positioned, and they're updating its 'top' when you scroll. WebKit has a fast enough JS engine that this sort of thing is seamless, but not every browser does / not on every computer. edit: tried Firefox (4 beta), it's a handful of pixels off the top, and bobs. You'd think people would know about position: fixed by now.
      - kmfrk 16y ago
        I see - I incorrectly inferred from the parent that the browser used was Chrome.
brown9-2 16y ago
I wish there was an easy way to export the choices I've made. I just turned 2015 into a surplus year!
- Encosia 16y ago
  Once you've "solved" it, click the Twitter sharing button (don't worry, it doesn't share anything immediately) and extract your solution's URL from the popup.
DannoHung 16y ago
Why can't I choose to eliminate the Bush tax cuts for both those earning less than $250k and those earning more than $250k? And then, why can't I eliminate the Bush tax cuts and then choose the eliminate loopholes but keep taxes slightly higher option along with the eliminate Bush tax cuts option?
- invisible 16y ago
  Ironically enough, the two tax cuts both involve doing nothing and both save so much that it is half of the deficit. I can easily get it up to 300 with some tax-based changes that are a) not that bad for anyone in particular, and b) should be a burden we all have anyways.
- mbateman 16y ago
  I think eliminating loopholes and raising the taxes on everyone is a subset of selecting both of the tax cut eliminations. Or at least that's how the NYT sees it.
- rdl 16y ago
  Eliminating cuts on those making less than 250k includes those above 250k as well, it is just badly presented. I don't think anyone has suggested eliminating cuts only for over 250k.
tibbon 16y ago
That wasn't too hard: http://t.co/Ex8OHv7 http://t.co/Ex8OHv7 In short, return taxes to Clinton era levels. Cut defense spending massively. Cut some gov't contractors. Cap medicare growth. Eliminate tax loopholes. National sales tax, carbon tax, bank tax. Results? 56% savings from tax increase, 44% savings from spending cuts. Gives us a pretty clear surplus that we could invest in education, real healthcare improvements, infrastructure (trains), etc. With this plan, we could actually make the US #1 for many things in the world instead of just military spending. It honestly wouldn't hurt me that much if my taxes overall went up by 10%. My income is probably low/average for the HN crowd.
- michael_dorfman 16y ago
  I didn't think it was hard either, and although my solution differed from yours in a few particulars, the core remained the same, as you mention: defense cuts, and returning taxes to pre-Clinton levels. If you have those two things in place, the rest becomes a pretty simple Chinese menu to pick and choose from.
  - eru 16y ago
    The retirement and Medicare options also give you huge savings in the long run. (They should probably index the retirement age to life expectancy. That way you wouldn't need to fight huge political battles every decade.)
    - tibbon 16y ago
      Right. If we're living longer, why do we need to leave the workforce so early? I'd argue that with the rise of technology, there is less and less of a need to retire even if your body isn't doing as well. Unless my hands and eyes give up, why would I need to stop programming?
      - rdl 16y ago
        Extra benefit to indexing government pensions/retirement to age as well (both requiring longer time in service to be eligible, and to start collecting at a later age). Right now military and law enforcement are largely 20 years and out, and it's easy to do 20 years in the military and then 20 years in law enforcement and double dip.
mbateman 16y ago
So basically by withdrawing from Iraq and Afghanistan, cutting down on health care massively, and tax reform (loophole-elimination) and a slight increase of the tax rate for everyone, you can easily balance the budget. I know each of these are controversial, but I find it interesting that there are lot of perhaps equally controversial things that aren't necessary. No need to cut government employees, salaries, contractors, etc. No need to reduce military research or benefits. No need to have any special taxes on the very wealthy. The only change needed to social security is to raise the age. It's really almost all in health care.
- tomjen3 16y ago
  You can do it with 0% tax increases too (the Laffer-curve suggest that you don't get a linear benefit from increasing taxes, so I tried to do it without). You could properly do even better if you could withdraw all the troops from Europe and the middle-east, instead of leaving 30k in Afghanistan.
rdl 16y ago
I (http://t.co/xvLvAuk http://t.co/xvLvAuk) ended up with 15% through taxes, 85% through spending cuts, but also cut more than was needed. I wouldn't be opposed to letting the Bush tax cuts expire (maybe in 2012 for >$250k, and in 2014 for everyone) if it were necessary, but it would impair some economic activity. I also would go for a higher estate tax, except that high estate taxes encourage crazy tax avoidance strategies; dynastic wealth is a bad thing on its own, but maybe that could be addressed by encouraging people to donate >50% of their estates to charity on death. (If there weren't crazy tax avoidance strategies, a 95+% estate tax would be fine with me; there should be no deadweight losses, only accelerated consumption by dying people.) Defense should be cut by 50-75% over the next 10 years, however, which would also go a long way to paying off the debt as well.
stcredzero 16y ago
If you look under the covers "fix" the US budget actually means "delay bankruptcy for another 3 or 4 decades."
- borism 16y ago
  I'm still waiting for Japan's default and that should have happened 20 years ago...
topherjaynes 16y ago
I actually broke out a pencil and did this puzzle in the paper /BUT/ I can't find which page has the answer? Is it in the same section? Haven't checked by the crossword puzzle, yet
smokeyj 16y ago
Law-makers aren't apt enough to invest resources of behalf of a "society". Law makers invest in activities consumers don't want, such as the War on Drugs/Terror/Reason, while Americans might rather have a War on Cancer. If politicians really knew what "society" wanted then they should visit HN and learn how to run a startup.
deleted 16y ago
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leelin 16y ago
The best thing this widget does is clearly illustrate that there is no easy and painless solution, and that almost all the hot debating in political campaigns today is over the very small ticket items (earmarks, getting out of Iraq, etc). The truly big ticket items are extremely unpopular among most voters: cuts in social security, Medicare, and huge tax increases on certain groups of people (the most influential folks). Also, a huge simplification is that we ignore the impact on the economy; one of the central arguments for keeping the tax cuts is that it supposedly creates more jobs, as does government workers and aid to states. Very cool find, though. Maybe it should be a required exercise before each election season, just to discourage politicians from focusing on the less important topics. One last eye-opener: this only helps plug up the year-to-year budget deficit. The actual national debt is $13.5 trillion, and should another recession hit us between now and 2030, we'll be in bigger trouble even if you managed to balance the budget in this "simulation."
- noodle 16y ago
  indeed. for example, the GOP has a list of the top 5 things they want to cut to save money for the government (can't find the website offhand). they're nothing more than token issues which would, in total, reduce the budget expenditure by something like 0.00001%. here's a graph of how the 2010 budget is spent: http://en.wikipedia.org/wiki/File:Fy2010_spending_by_category.jpg http://en.wikipedia.org/wiki/File:Fy2010_spending_by_categor... no one on either side of the aisle wants to touch cutting anything that will actually matter
  - jacoblyles 16y ago
    Have you seen Paul Ryan's "Roadmap" budget?
    - quanticle 16y ago
      I have. I also know that the "Roadmap" budget has been intentionally buried by the Republican leadership because they don't want the people to know what kind of sacrifices they'll have to make if they want to reduce the deficit without raising taxes.
gahahaha 16y ago
Implicit in this "puzzle" is that the US budget should be balanced right now. It should not! Interest rates are EXTREMELY low right now, and due to high unemployment, investments by the government will give more bang for the buck than in a VERY long time. So what the situation tells us is that this would be a GREAT time for the government to start investing and spending money until private demand rises. We should spend now, and tax a little bit more in the future. That is what the markets are telling us. Total spending in the economy = total savings in the economy. Consumers have overextended themselves and now have to save, to avoid a depression (when EVERYBODY saves at the same time and nothing gets done) the government (whom the market is clamoring to give money to) must spend. It's simple, really. Why people have such a hard time understanding it is beyond me.
- raesene 16y ago
  I'd agree with you in theory, it's pretty standard demand management, that the public sector picks up the slack when private sector demand is low. the problem with a lot of governments, including the US, appears to be the other half of the equation, which is that when the private sector is doing well, the public sector should contract, in order to mitigate the effects of inflation. What seemed to me to have happened in the last decade is that government costs expanded in the "good times" causing a deficit, and meaning that when the bad times came with the financial crash it's a lot more difficult for them to expand spending. The other problem (although it doesn't apply as much to the US as other countries) is sovereign debt risk. Countries like the republic of Ireland absolutely have to cut expenditure as otherwise the bond markets see them as a real default risk and hike up the cost of their borrowing, so they have no real choice but to decrease government spending.
  - gahahaha 16y ago
    The unfunded wars in Iraq and Afghanistan and the unfunded Bush tax cuts put us in a much worse fiscal situation leading into this crisis, but the US has unlimited credit lines now. It should use them. Ireland and Greece is fucked. Germany and China only think about themselves. American economic historian Charles Kindleberger used to argue that ultimately the Great Depression happened because of this failure of economic leadership on the world stage. He believed that a well-functioning global economy required one country to act as the leader, in effect to do more than its fair share of keeping the global economy moving, fully recognizing that smaller countries will freeload off of its efforts. If we are at a similar transition point in world leadership, if the United States has indeed been knocked off its pedestal in much the same way as was Britain in the early twentieth century, it does not bode well for the ability of the global economy to navigate its next storm. Through much of the nineteenth century Britain was the linchpin of the world financial system. It was the capital supplier of last resort during crises and acted countercyclically as the economic locomotive for the world. But, almost bankrupted by the First World War, it was no longer able to fulfill that function after 1919. The mantle of leadership should have passed to the United States. But American leaders were too parochial and insular to seize the opportunity. Thus, during the 1920s and 1930s, the United States was unwilling to lead and Britain unable.
wazoox 16y ago
It forgot one thing : historically all large deficits and sovereign debts have been solved by huge inflation. However returning taxes rate to Clinton era levels + some more taxes (not much really) + a severe miltary spending cut would solve the deficit according to this game. That's the way I'd go, but I don't hold my breath :)
dustintownsend 16y ago
The problem with the Taxes section is it doesn't account for the unintended consequences of raising taxes. Historically when taxes are raised, revenues tend to never get close to projections. Why you might ask? Well, because an increase in taxes usually leads to less investment (startups, expanding existing business, etc). In the extreme case an increase an taxes could even lead to companies moving to other locations to shelter themselves from the added tax burden. Something we are seeing happen in the US now, because of fear of increased taxes. Many large corporations are making structural changes and moving assets out of the country. We need to cut spending and cut taxes. Reduce, simplify, eliminate.
- dustintownsend 16y ago
  My plan for the deficit http://t.co/FZkXRuz http://t.co/FZkXRuz (0% from tax increases, 100% from Spending Cuts)
- kenjackson 16y ago
  Historically when taxes are raised, revenues tend to never get close to projections. That needs a citation (projections vs reality). I've never heard the claim you've made before. I suspect it is no different than the inaccuracy of projections on tax revenue from conservatives that cutting taxes to the wealthy will provide.
  - gsmaverick 16y ago
    Laffer Curve is the more general concept. http://en.wikipedia.org/wiki/Laffer_Curve http://en.wikipedia.org/wiki/Laffer_Curve
    - kenjackson 16y ago
      The Laffer Curve also says that there is an optimal tax rate for which tax revenue will be maximized. It doesn't say that reducing taxes increases revenue, as this requires the tax rate to be sufficiently high that it is higher than the optimal tax rate.
- 16y ago
klbarry 16y ago
I have to congratulate the New York Times on doing a relevant useful web app really well, with excellent implementation (allow people to save their choices, share it, etc.)
dennisgorelik 16y ago
I agree with all cutting suggestions in this article. + Much more: 1) Not just cut financial aid to the states by 5%, but cut it by 5% every year for 15 years in a row. 2) Cutting number troops in Iraq and Afghanistan to 30000 by 2013? Of course, but that's not enough. How about cutting the number to 20000 by the end of this year, to 10000 by the end of 2011, and finally to 5000 by the end of 2012. 3) Cap Medicare spending growth? Of course. However not in 2013, but right now. And not at budget growth + 1%, but at budget growth - 1%. Etc.
Andrew_Quentin 16y ago
I think my solution is fare and has only little pain. I think that the public would support it: http://t.co/2Gkg0xP http://t.co/2Gkg0xP Maybe there should be some sort of public voting on issues such as this to see what the majority thinks should be cut.
abraham 16y ago
Ok. Fixed it. So does Obama contact me?...
nitfol 16y ago
Pretty cool, but it assumes that many options are independent when they may not be... If I "reduce military to pre-Iraq war size" and "reduce the number of troops in Iraq and Afghanistan to 30,000," can I really save the sum of $49 billion and $169 billion, or am I counting some reductions twice? If I increase the medicare age to 70 and cap medicare growth, can I really save the sum of $104 billion and $562 billion? Even assuming the revenues from taxes takes into account reduced economic activity / moving investments outside of the USA, etc., are there effects from combining them that would further reduce revenue?
Estragon 16y ago
They don't give you enough options for cutting the defense budget. There is far more fat there which could be trimmed.
asnyder 16y ago
My solution: http://t.co/g3D9scr http://t.co/g3D9scr
greenlblue 16y ago
I hate it when people buy into this 'government is a business' mentality and that it should have a 'balanced budget'. Government is not a business and people shouldn't expect to run it like one. The money spent on social services circulates within the US economy but corporate tax cuts get funneled to off shore accounts never to see the light of day within US borders. So what the politicians should be fixing are corporate finance rules and not social security, medicaid or some other social service.
ckinnan 16y ago
This exercise shows a projected budget deficit in 2015 of $418 billion. Seems optimistic. The fiscal year 2010 budget deficit was $1.3 trillion, and the consensus estimate for the hole in fiscal 2011 is another $1.3 trillion...
swankpot 16y ago
The solution I came up with is 80 percent raising taxes, 20 percent cutting costs. I guess I really am a lefty. But, I didn't touch military budgets at all, except for cutting civilian overhead. http://www.nytimes.com/interactive/2010/11/13/weekinreview/deficits-graphic.html?choices=600ln5y7 http://www.nytimes.com/interactive/2010/11/13/weekinreview/d... The biggest shock for me was how little 'cutting earmarks' actually accomplishes, at merely $14 billion. I'm shocked because of how much political hot air is exhaled on it.
johngalt 16y ago
The only thing surprising is how easy a balanced budget would be. There are very few things on that list I'd object to. Lets balance the budget and keep it that way, then we can let the national debt die a slow inflationary death.
ja30278 16y ago
Weirdly omitted from the cut options: Medicaid: $290 billion HUD Programs: $47.5 billion Unemployment: $106 billion Any part of the giant 'Other mandatory' block (~$600 billion) which makes up Food Stamps, WIC, Welfare, etc.
- philwelch 16y ago
  It's only allowing plausible options. Obviously you could go full-tilt libertarian and run the whole federal government on $100 billion a year, and you could even pay off the national debt by selling federal property (who wants to buy a stealth bomber? China? Larry Ellison?), but that will never happen. Most of the items on the list of options are at least conceivable.
Jach 16y ago
Why do they project it out to 2030? 2015 is somewhat reasonable, but 20 years from now is a long time at the rate of progress the species is making.
nl 16y ago
Sorry, I must be dumb. Why exactly does the US want to cut the deficit when the unemployment rate is 9%, inflation is 1% and the federal interest rate is 0.25%? (I do understand the problem that the cost of future health care may cause, but it seems to me that problem is structural rather than just financial, and it seems odd to try and tackle that problem when the economy is doing so badly)

190 points by ojbyrne 16y ago

Of course no truly creative solutions are allowed in the puzzle. It really only serves to illustrate how impossible it is if you stay within the bounds of the current political climate. Not to mention it's a rather limited view of the problem not really taking into account the various feedback loops each option has when it feeds back into the economy and thus back into taxes collected. Even with all of that said though I like seeing these kinds of exercises brought to the public to raise their awareness of the issues. I really don't envy our gov't leadership trying to solve this problem. The sheer number of variables make it almost impossible to truly predict the result of any action.

Encosia 16y ago
I agree that it's too simplistic to ignore the chain reaction of side-effects those changes would have. I also agree regarding creative solutions, though how would you even begin to put a user-friendly interface on that? That said, it was not difficult to find an acceptable solution. As I started, I thought the moral of the exercise was going to be how hard a problem this is. As it turned out, I had a solution less than 2/3 of the way into the list.
- Benjo 16y ago
  If you could quantify the actual effect each change would make, it wouldn't be that hard politically to reach an actual solution. The problem is that political noise makes it very difficult to convince anyone that you are making a reasonable estimate.
- eru 16y ago
  They bias you towards spending cuts, by putting them first on the list. At least that's how I felt. (But I am more in favour of spending cuts anyway.)
- jorgeortiz85 16y ago
  Yes, but given all the interests groups affected by the choices, could you get 2/3rds of the Senate to agree with your solution?
  - Encosia 16y ago
    Maybe not. At the same time, they eventually aren't going to have a choice, and waiting only deepens the inevitable cuts. I don't subscribe to any of the Beck-type fear and paranoia, but I do believe our legislators are going to find their employer insolvent if they don't work together to get our finances in order.
devmonk 16y ago
Agreed. What if we: - Developed and focused on a small set of specific goals for the U.S. government. - Eliminated most of the IRS and replace our current taxes with a graduated sales tax. - Cut the myriad of handouts to various organizations that our government makes in one form or another every year. - Developed and supported sustainable agriculture. - Eliminated the public education system but provided allowances such that every child can get an education tailored to their abilities and desires, and advance at their own speed rather than the speed of their class. - Eliminated most of the FDA, DEA, and other enforcement agencies, with the exception of the FBI, and allow our judicial system to imprison employees of companies found responsible for knowledgeably harming citizens simply using trial by jury, and replace bail/monetary remedies with prison sentences only. - Focused efforts on planetary defense and colonization of other worlds via a beefed-up NASA whose purpose is to support private space enterprise. - Allowed individuals at businesses to be sued rather than the company itself, for which there would exist no legal entity. Of course, they won't do these things, but since they are asking...
- eru 16y ago
  > - Allowed individuals at businesses to be sued rather than the company itself, for which there would exist no legal entity. Interesting. What problem would this proposal solve? You had this legal situation earlier in the US. The problem was, that the consumer could not pinpoint who to sue. That's a horrible incentive to make the structure of who did what in your company totally non-transparent.
  - devmonk 16y ago
    But the current remedy of a non-human legal entity is that the entity can be sued and affect many people adversely who weren't responsible for the wrong. We need a different remedy, like the ability for a citizen to sue every citizen belonging to an organization together if the organization was found responsible for the wrong. Then those citizens not responsible in that organization would have to have witnesses and documentation to prove that they were not responsible for the wrong. And instead of sueing, I think that prison sentences would work better. Putting all responsible persons from a company into prison would get people's attention. Also, citizens and lawyers producing substantial litigation without merit would be imprisoned.
bilbo0s 16y ago
"...it's a rather limited view of the problem not really taking into account the various feedback loops each option has when it feeds back into the economy and thus back into taxes collected..." This would be a difficult thing to do. What would be an acceptable model for these feedback loops? Given that, at the end of the day, the budget MUST balance. Let's say we all agreed that cutting taxes X%, would have a Y% chance of increasing tax revenue Z% over W number of years. How do we know that? Or, more precisely, what is the probability ratio that we assign that node in the decision tree? Y, right. Now if Y is not 1, then we do not KNOW that the budget will be balanced at date W. My point is, when modeling economic feedback loops 'Y' is rarely 1. So I think what they are saying is, given the serious nature of the current economic shortfalls, they will confine the discussion to only those cuts whose savings can be assigned a probability ratio of 1 in the decision tree. I think they would readily concede that this leads to 'non-creative' solutions. But the output of that decision tree is also guaranteed to work if implemented.
- lukeschlather 16y ago
  Nothing on that list has an obvious probability ratio of 1. This is world politics, not a computer simulation. Most government services provide a safety net for minimal-income workers. You take that away, the lower class could quickly become insolvent, threatening our entire social structure. Obviously I'm specifically hitting entitlement, but all government services have people who rely on them, and in most cases the government does them more efficiently than private business can. Military spending secures the US role as world superpower. You take that away and businesses working abroad have a much harder time creating factories with exploitative labor pricing. Prices rise. There is a possible good outcome where factories are forced back into the states, but it's a gamble. Take that stuff away, there's barely 100 billion worth of cuts with a probability ratio with anything approaching 1.
  - eru 16y ago
    > Military spending secures the US role as world superpower. You take that away and businesses working abroad have a much harder time creating factories with exploitative labor pricing. Prices rise. Sounds very outlandish to me. But then, by that understanding, say, Germany is probably just freeriding on American oppression.
Retric 16y ago
impossible? I fixed the budget before getting 1/2 way down the list. I am fairly liberal and I am more than willing to gut medicare let alone the minor changes they are suggesting.
- zaphar 16y ago
  sure you fixed it by ignoring political realities and making choices purely based off of how much money each choice would free up. It's easy if you do it that way. Now try and do it in a way that isn't political suicide and doesn't put the nation at risk abroad.
  - flogic 16y ago
    Well political realities make it almost impossible. Not putting the nation at risk is doable.
- Locke1689 16y ago
  I am very liberal and managed to do it by making modest reductions in military expenditure, capping Medicare, giving a 2015 date for Iraq/Afghanistan withdrawal, and returning most taxes to Clinton levels.
- dagw 16y ago
  Balancing the budget is trivial. Balancing the budget AND getting re-elected, that is tricky part.
tibbon 16y ago
On this concept of feedback loops- do politicians take them into account? Looking at US politics, I strongly feel that members on both side of the aisle look primarily at what is immediately accessible and rarely at long term effects or accountability. Sure, they make drafts, bills laws and propositions that mention things to take effect at some far out date- but that doesn't really mean that they are themselves looking at realistic feedback loops, but rather just what charged issues they can drive against the other side to appease their constituency on their far side. Take DADT, or Same-Sex Marriage. The feedback loop of realistic long-term consequence of them items against other people are likely close to zero. Facts reported in a (leaked) report due to Obama soon seem to point that the effect on the armed forces would be minimal- in my guess probably similar to integrating minorities into the armed forces. The long term effects would be the increased mental health of valued service members, and an increased pool of people that could serve. Yet, R's rally against it, pointing to odd and unfounded rhetoric that is held firmly in just keeping things frozen culturally and socially. They don't look at the long term effects, or even at the fact that some homosexuals might consider voting for them if they backed the bills. It is possible that this isn't the best example, but do politicians really look at feedback loops and probability? No, I don't think so. They look at the feedback onto the next election and that's about it.
- barrkel 16y ago
  They look at what they're motivated to look at, and the people who elect them, in the large, only see headline soundbites in campaign literature. Democracy has relatively little incentive to look at the long term or second-order effects, especially long term benefits that have short term costs. Instead, policies wander back and forth like a pendulum, going too far in each direction, and only changing direction in response to crises. Occasionally the oscillation gets too extreme, and very bad things happen.

Dilpil 16y ago

Wow, this has an utterly horrible interface. The way it bobs up and down as a I scroll is quite appalling. I'd rather have frames than this.

Benjo 16y ago
It doesn't "bob" for me in Chrome.
- kmfrk 16y ago
  Nor here. Maybe a developer version of Chrome is responsible?
  - Groxx 16y ago
    It's just because NYT is positioning the chart stupidly (but probably most-reliably, knowing browsers...). It's absolute-positioned, and they're updating its 'top' when you scroll. WebKit has a fast enough JS engine that this sort of thing is seamless, but not every browser does / not on every computer. edit: tried Firefox (4 beta), it's a handful of pixels off the top, and bobs. You'd think people would know about position: fixed by now.
    - kmfrk 16y ago
      I see - I incorrectly inferred from the parent that the browser used was Chrome.

brown9-2 16y ago

I wish there was an easy way to export the choices I've made. I just turned 2015 into a surplus year!

Encosia 16y ago
Once you've "solved" it, click the Twitter sharing button (don't worry, it doesn't share anything immediately) and extract your solution's URL from the popup.

DannoHung 16y ago

Why can't I choose to eliminate the Bush tax cuts for both those earning less than $250k and those earning more than $250k? And then, why can't I eliminate the Bush tax cuts and then choose the eliminate loopholes but keep taxes slightly higher option along with the eliminate Bush tax cuts option?

invisible 16y ago
Ironically enough, the two tax cuts both involve doing nothing and both save so much that it is half of the deficit. I can easily get it up to 300 with some tax-based changes that are a) not that bad for anyone in particular, and b) should be a burden we all have anyways.
mbateman 16y ago
I think eliminating loopholes and raising the taxes on everyone is a subset of selecting both of the tax cut eliminations. Or at least that's how the NYT sees it.
rdl 16y ago
Eliminating cuts on those making less than 250k includes those above 250k as well, it is just badly presented. I don't think anyone has suggested eliminating cuts only for over 250k.

tibbon 16y ago

That wasn't too hard: http://t.co/Ex8OHv7 http://t.co/Ex8OHv7 In short, return taxes to Clinton era levels. Cut defense spending massively. Cut some gov't contractors. Cap medicare growth. Eliminate tax loopholes. National sales tax, carbon tax, bank tax. Results? 56% savings from tax increase, 44% savings from spending cuts. Gives us a pretty clear surplus that we could invest in education, real healthcare improvements, infrastructure (trains), etc. With this plan, we could actually make the US #1 for many things in the world instead of just military spending. It honestly wouldn't hurt me that much if my taxes overall went up by 10%. My income is probably low/average for the HN crowd.

michael_dorfman 16y ago
I didn't think it was hard either, and although my solution differed from yours in a few particulars, the core remained the same, as you mention: defense cuts, and returning taxes to pre-Clinton levels. If you have those two things in place, the rest becomes a pretty simple Chinese menu to pick and choose from.
- eru 16y ago
  The retirement and Medicare options also give you huge savings in the long run. (They should probably index the retirement age to life expectancy. That way you wouldn't need to fight huge political battles every decade.)
  - tibbon 16y ago
    Right. If we're living longer, why do we need to leave the workforce so early? I'd argue that with the rise of technology, there is less and less of a need to retire even if your body isn't doing as well. Unless my hands and eyes give up, why would I need to stop programming?
    - rdl 16y ago
      Extra benefit to indexing government pensions/retirement to age as well (both requiring longer time in service to be eligible, and to start collecting at a later age). Right now military and law enforcement are largely 20 years and out, and it's easy to do 20 years in the military and then 20 years in law enforcement and double dip.

mbateman 16y ago

So basically by withdrawing from Iraq and Afghanistan, cutting down on health care massively, and tax reform (loophole-elimination) and a slight increase of the tax rate for everyone, you can easily balance the budget. I know each of these are controversial, but I find it interesting that there are lot of perhaps equally controversial things that aren't necessary. No need to cut government employees, salaries, contractors, etc. No need to reduce military research or benefits. No need to have any special taxes on the very wealthy. The only change needed to social security is to raise the age. It's really almost all in health care.

tomjen3 16y ago
You can do it with 0% tax increases too (the Laffer-curve suggest that you don't get a linear benefit from increasing taxes, so I tried to do it without). You could properly do even better if you could withdraw all the troops from Europe and the middle-east, instead of leaving 30k in Afghanistan.

rdl 16y ago

I (http://t.co/xvLvAuk http://t.co/xvLvAuk) ended up with 15% through taxes, 85% through spending cuts, but also cut more than was needed. I wouldn't be opposed to letting the Bush tax cuts expire (maybe in 2012 for >$250k, and in 2014 for everyone) if it were necessary, but it would impair some economic activity. I also would go for a higher estate tax, except that high estate taxes encourage crazy tax avoidance strategies; dynastic wealth is a bad thing on its own, but maybe that could be addressed by encouraging people to donate >50% of their estates to charity on death. (If there weren't crazy tax avoidance strategies, a 95+% estate tax would be fine with me; there should be no deadweight losses, only accelerated consumption by dying people.) Defense should be cut by 50-75% over the next 10 years, however, which would also go a long way to paying off the debt as well.

stcredzero 16y ago

If you look under the covers "fix" the US budget actually means "delay bankruptcy for another 3 or 4 decades."

borism 16y ago
I'm still waiting for Japan's default and that should have happened 20 years ago...

topherjaynes 16y ago

I actually broke out a pencil and did this puzzle in the paper /BUT/ I can't find which page has the answer? Is it in the same section? Haven't checked by the crossword puzzle, yet

smokeyj 16y ago

Law-makers aren't apt enough to invest resources of behalf of a "society". Law makers invest in activities consumers don't want, such as the War on Drugs/Terror/Reason, while Americans might rather have a War on Cancer. If politicians really knew what "society" wanted then they should visit HN and learn how to run a startup.

deleted 16y ago

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leelin 16y ago

The best thing this widget does is clearly illustrate that there is no easy and painless solution, and that almost all the hot debating in political campaigns today is over the very small ticket items (earmarks, getting out of Iraq, etc). The truly big ticket items are extremely unpopular among most voters: cuts in social security, Medicare, and huge tax increases on certain groups of people (the most influential folks). Also, a huge simplification is that we ignore the impact on the economy; one of the central arguments for keeping the tax cuts is that it supposedly creates more jobs, as does government workers and aid to states. Very cool find, though. Maybe it should be a required exercise before each election season, just to discourage politicians from focusing on the less important topics. One last eye-opener: this only helps plug up the year-to-year budget deficit. The actual national debt is $13.5 trillion, and should another recession hit us between now and 2030, we'll be in bigger trouble even if you managed to balance the budget in this "simulation."

noodle 16y ago
indeed. for example, the GOP has a list of the top 5 things they want to cut to save money for the government (can't find the website offhand). they're nothing more than token issues which would, in total, reduce the budget expenditure by something like 0.00001%. here's a graph of how the 2010 budget is spent: http://en.wikipedia.org/wiki/File:Fy2010_spending_by_category.jpg http://en.wikipedia.org/wiki/File:Fy2010_spending_by_categor... no one on either side of the aisle wants to touch cutting anything that will actually matter
- jacoblyles 16y ago
  Have you seen Paul Ryan's "Roadmap" budget?
  - quanticle 16y ago
    I have. I also know that the "Roadmap" budget has been intentionally buried by the Republican leadership because they don't want the people to know what kind of sacrifices they'll have to make if they want to reduce the deficit without raising taxes.

gahahaha 16y ago

Implicit in this "puzzle" is that the US budget should be balanced right now. It should not! Interest rates are EXTREMELY low right now, and due to high unemployment, investments by the government will give more bang for the buck than in a VERY long time. So what the situation tells us is that this would be a GREAT time for the government to start investing and spending money until private demand rises. We should spend now, and tax a little bit more in the future. That is what the markets are telling us. Total spending in the economy = total savings in the economy. Consumers have overextended themselves and now have to save, to avoid a depression (when EVERYBODY saves at the same time and nothing gets done) the government (whom the market is clamoring to give money to) must spend. It's simple, really. Why people have such a hard time understanding it is beyond me.

raesene 16y ago
I'd agree with you in theory, it's pretty standard demand management, that the public sector picks up the slack when private sector demand is low. the problem with a lot of governments, including the US, appears to be the other half of the equation, which is that when the private sector is doing well, the public sector should contract, in order to mitigate the effects of inflation. What seemed to me to have happened in the last decade is that government costs expanded in the "good times" causing a deficit, and meaning that when the bad times came with the financial crash it's a lot more difficult for them to expand spending. The other problem (although it doesn't apply as much to the US as other countries) is sovereign debt risk. Countries like the republic of Ireland absolutely have to cut expenditure as otherwise the bond markets see them as a real default risk and hike up the cost of their borrowing, so they have no real choice but to decrease government spending.
- gahahaha 16y ago
  The unfunded wars in Iraq and Afghanistan and the unfunded Bush tax cuts put us in a much worse fiscal situation leading into this crisis, but the US has unlimited credit lines now. It should use them. Ireland and Greece is fucked. Germany and China only think about themselves. American economic historian Charles Kindleberger used to argue that ultimately the Great Depression happened because of this failure of economic leadership on the world stage. He believed that a well-functioning global economy required one country to act as the leader, in effect to do more than its fair share of keeping the global economy moving, fully recognizing that smaller countries will freeload off of its efforts. If we are at a similar transition point in world leadership, if the United States has indeed been knocked off its pedestal in much the same way as was Britain in the early twentieth century, it does not bode well for the ability of the global economy to navigate its next storm. Through much of the nineteenth century Britain was the linchpin of the world financial system. It was the capital supplier of last resort during crises and acted countercyclically as the economic locomotive for the world. But, almost bankrupted by the First World War, it was no longer able to fulfill that function after 1919. The mantle of leadership should have passed to the United States. But American leaders were too parochial and insular to seize the opportunity. Thus, during the 1920s and 1930s, the United States was unwilling to lead and Britain unable.

wazoox 16y ago

It forgot one thing : historically all large deficits and sovereign debts have been solved by huge inflation. However returning taxes rate to Clinton era levels + some more taxes (not much really) + a severe miltary spending cut would solve the deficit according to this game. That's the way I'd go, but I don't hold my breath :)

dustintownsend 16y ago

The problem with the Taxes section is it doesn't account for the unintended consequences of raising taxes. Historically when taxes are raised, revenues tend to never get close to projections. Why you might ask? Well, because an increase in taxes usually leads to less investment (startups, expanding existing business, etc). In the extreme case an increase an taxes could even lead to companies moving to other locations to shelter themselves from the added tax burden. Something we are seeing happen in the US now, because of fear of increased taxes. Many large corporations are making structural changes and moving assets out of the country. We need to cut spending and cut taxes. Reduce, simplify, eliminate.

dustintownsend 16y ago
My plan for the deficit http://t.co/FZkXRuz http://t.co/FZkXRuz (0% from tax increases, 100% from Spending Cuts)
kenjackson 16y ago
Historically when taxes are raised, revenues tend to never get close to projections. That needs a citation (projections vs reality). I've never heard the claim you've made before. I suspect it is no different than the inaccuracy of projections on tax revenue from conservatives that cutting taxes to the wealthy will provide.
- gsmaverick 16y ago
  Laffer Curve is the more general concept. http://en.wikipedia.org/wiki/Laffer_Curve http://en.wikipedia.org/wiki/Laffer_Curve
  - kenjackson 16y ago
    The Laffer Curve also says that there is an optimal tax rate for which tax revenue will be maximized. It doesn't say that reducing taxes increases revenue, as this requires the tax rate to be sufficiently high that it is higher than the optimal tax rate.
16y ago

klbarry 16y ago

I have to congratulate the New York Times on doing a relevant useful web app really well, with excellent implementation (allow people to save their choices, share it, etc.)

dennisgorelik 16y ago

I agree with all cutting suggestions in this article. + Much more: 1) Not just cut financial aid to the states by 5%, but cut it by 5% every year for 15 years in a row. 2) Cutting number troops in Iraq and Afghanistan to 30000 by 2013? Of course, but that's not enough. How about cutting the number to 20000 by the end of this year, to 10000 by the end of 2011, and finally to 5000 by the end of 2012. 3) Cap Medicare spending growth? Of course. However not in 2013, but right now. And not at budget growth + 1%, but at budget growth - 1%. Etc.

Andrew_Quentin 16y ago

I think my solution is fare and has only little pain. I think that the public would support it: http://t.co/2Gkg0xP http://t.co/2Gkg0xP Maybe there should be some sort of public voting on issues such as this to see what the majority thinks should be cut.

abraham 16y ago

Ok. Fixed it. So does Obama contact me?...

nitfol 16y ago

Pretty cool, but it assumes that many options are independent when they may not be... If I "reduce military to pre-Iraq war size" and "reduce the number of troops in Iraq and Afghanistan to 30,000," can I really save the sum of $49 billion and $169 billion, or am I counting some reductions twice? If I increase the medicare age to 70 and cap medicare growth, can I really save the sum of $104 billion and $562 billion? Even assuming the revenues from taxes takes into account reduced economic activity / moving investments outside of the USA, etc., are there effects from combining them that would further reduce revenue?

Estragon 16y ago

They don't give you enough options for cutting the defense budget. There is far more fat there which could be trimmed.

asnyder 16y ago

My solution: http://t.co/g3D9scr http://t.co/g3D9scr

greenlblue 16y ago

I hate it when people buy into this 'government is a business' mentality and that it should have a 'balanced budget'. Government is not a business and people shouldn't expect to run it like one. The money spent on social services circulates within the US economy but corporate tax cuts get funneled to off shore accounts never to see the light of day within US borders. So what the politicians should be fixing are corporate finance rules and not social security, medicaid or some other social service.

ckinnan 16y ago

This exercise shows a projected budget deficit in 2015 of $418 billion. Seems optimistic. The fiscal year 2010 budget deficit was $1.3 trillion, and the consensus estimate for the hole in fiscal 2011 is another $1.3 trillion...

swankpot 16y ago

The solution I came up with is 80 percent raising taxes, 20 percent cutting costs. I guess I really am a lefty. But, I didn't touch military budgets at all, except for cutting civilian overhead. http://www.nytimes.com/interactive/2010/11/13/weekinreview/deficits-graphic.html?choices=600ln5y7 http://www.nytimes.com/interactive/2010/11/13/weekinreview/d... The biggest shock for me was how little 'cutting earmarks' actually accomplishes, at merely $14 billion. I'm shocked because of how much political hot air is exhaled on it.

johngalt 16y ago

The only thing surprising is how easy a balanced budget would be. There are very few things on that list I'd object to. Lets balance the budget and keep it that way, then we can let the national debt die a slow inflationary death.

ja30278 16y ago

Weirdly omitted from the cut options: Medicaid: $290 billion HUD Programs: $47.5 billion Unemployment: $106 billion Any part of the giant 'Other mandatory' block (~$600 billion) which makes up Food Stamps, WIC, Welfare, etc.

philwelch 16y ago
It's only allowing plausible options. Obviously you could go full-tilt libertarian and run the whole federal government on $100 billion a year, and you could even pay off the national debt by selling federal property (who wants to buy a stealth bomber? China? Larry Ellison?), but that will never happen. Most of the items on the list of options are at least conceivable.

Jach 16y ago

Why do they project it out to 2030? 2015 is somewhat reasonable, but 20 years from now is a long time at the rate of progress the species is making.

nl 16y ago

Sorry, I must be dumb. Why exactly does the US want to cut the deficit when the unemployment rate is 9%, inflation is 1% and the federal interest rate is 0.25%? (I do understand the problem that the cost of future health care may cause, but it seems to me that problem is structural rather than just financial, and it seems odd to try and tackle that problem when the economy is doing so badly)