Keith Hennessey

Keith Hennessey


116 comments posted · 0 followers · following 0

557 weeks ago @ - The President’s ... · 0 replies · +1 points

I think you have identified a hole in the logic, yes.

557 weeks ago @ - The long term budget p... · 4 replies · +2 points

Here is a quick three-part reply to the 43 vs. 44 discussion above.

1. Part of the FY 2009 spending spike results from the outlays flowing from the first half ($350B) of TARP, which President Bush proposed and Congress enacted on a broadly bipartisan basis. These outlays were used to purchase equity in banks and have been, except in 2-3 cases, fully repaid. So yes, a portion of that spike should be attributed to President Bush, but then an almost offsetting decline should be taken into account in 2010 and 2011 as those amounts were repaid. The initial auto bailout $ should also be attributed in part to 43, but they're several times smaller than TARP and stimulus.

2. The remainder of the 2009 spike was the sum of (a) higher spending from automatic stabilizers like unemployment insurance benefits and (b) higher spending proposed by President Obama and enacted by Congress, especially the February 2009 stimulus. To the extent you care about attributing them to a particular President, these should go on President Obama's tab, as should the second half of TARP, much of which was spent on economic actions that were not repaid.

3. While I would phrase it differently, Cigarvolante's point is an important one. The 2009-2010 spending spike resulted from two policies designed to be one-time and temporary: TARP and stimulus. No matter what your views on those policies or the Presidents who proposed them, they are independent of the spending path going forward, except to the extent that elected officials get "used to" higher spending and refuse to cut it.

I will, as necessary, explain the record of my former boss President Bush as best I can. It is a far more productive use of everyone's time, however, to focus on how to solve the future problem.

The relevant question is: what should we do about the future part of the above graph?

Thanks to all for the comments. Let's try to keep the tone vigorous and constructive, please.

557 weeks ago @ - The long term budget p... · 0 replies · +6 points

In reply to a couple of commenters:
- Yes, budget numbers are uncertain.
- Yes, there are gimmicks in the President's numbers.
- Yes, this year's proposal will be superseded by next year's proposal.
- No, the future will not look exactly like this chart.

This chart is, however, a fair presentation of what the future would look like if the President's policies were enacted as he proposes them, if future policies were not to supersede this year's proposals, and if we ignore the gimmicks.

That's a lot of if's, but in most cases they are second order concerns and should not detract from the conclusions, I think.

I think an even fairer position would be for me to eliminate the gimmicks in the President's numbers. Doing so here, however, would expose my presentation to a distracting back-and-forth that I was somehow fudging the numbers. I want to show that, even if we give credit for all the gimmicks, the outlook is still bleak.

And uncertainty does not in this case change the underlying structural problem. No one can tell you how big our government WILL be fifty years from now. But I believe I can tell you that, if our policies are not changed, it will be a multiple of its current share of GDP, and that's disastrous.

Of course, we won't make it to 2060 on our current path.

Thanks to all for the thoughtful and constructive comments.

557 weeks ago @ - The long term budget p... · 0 replies · +1 points

Thank you, sir. The zero starting point was an explicit choice. The tradeoff is that, on some graphs, it makes it hard to read.

566 weeks ago @ - Financial Crisis Primer · 0 replies · +1 points

Ah, I see. I agree. Your language is better than mine and more precise.

566 weeks ago @ - Financial Crisis Primer · 2 replies · 0 points

On your first point, you're right. The statute requires the Commission to "report" today, and only a majority of the Commission can issue a "report." Without two more votes, the best the four of us could do was issue a "document" on the statutory deadline.

So my phrasing "... to comply with the law" was imprecise. I have fixed it.

FYI, the statute is silent on whether the Commission should report recommendations.

The length limitation applies only to the commercially printed "book" version of the report, not to the official GPO version (printed or electronic), or to material posted on the website.

567 weeks ago @ - Support the tax deal · 0 replies · +1 points

Great and constructive comment.

583 weeks ago @ - Obama Economy Facts · 0 replies · +1 points

There are several different ways to measure spending, taxes, and deficits. I am using public CBO and OMB data to show absolute levels without adjusting for the business cycle's effects on the budget. The links you provide make such an adjustment, and the figures you cite are for changes relative to a particular baseline.

There's no reason they can't all be correct, just as one could say a lemon is both yellow and sour. I stand by the facts and sources cited (subject to a few minor corrections noted above.)

583 weeks ago @ - Obama Economy Facts · 0 replies · +1 points

Because I had a brain freeze. Now it's 3.8%. Thanks again.

584 weeks ago @ - Roles of the President... · 0 replies · +1 points

You're right, of course. That was a result of me moving some text around at the last minute.