Mitch Daniels’ New Math Ignores the Real Numbers
I caught the last half of Indiana Governor Mitch Daniels explaining his new budget math to CNN’s Candy Crowley. Daniels is trying to pitch himself and his book with the idea that the federal deficits and long-run debt pose an existential threat to the Republic. It’s just arithmetic, he says. But which numbers matter?
Math can be hard, but it’s impossible for those who ignore the relevant numbers. The essential numbers (among dozens we could cite) are these:
First: The US Government can currently borrow money for 10 years at about 1.8 percent, which adjusted for inflation means that the real cost of borrowing money long term is essentially zero. The market is screaming at us that money is free if we want to borrow more to put people back to work doing stuff that needs to be done.
Second, with unemployment at 9 to 17 percent, depending on what you measure, there are about 25 million people who need jobs or more hours in the jobs they have. Smart economists told us early on, and more are telling us now that this condition could last for several more years. And that’s assuming we don’t slip into a worse depression, which we might because Europe is led by people as dumb as Mitch Daniels. So even the “better” proposals to spend a little more now and postpone austerity measures until 2013 are misguided.
Third, the deteriorating infrastructure in the United States needs over $2 trillion in investments over the next decade, starting yesterday. Again, it costs us essentially nothing to borrow the money to do this.
Fifth, the richest 1 percent in America continue to capture a grossly disproportionate share of the nation’s income and wealth, and that trend is continuing. But their effective tax rates haven’t been lower in decades.
Sixth, we’re laying off tens of thousands of teachers. It is because we have too many teachers? Too many over-educated children? No, we need more and we need to pay our teachers better. Our schools are failing, our kids are falling behind those of other nations and we’re losing out in the competition for what we need the next generation to know. That’s called losing the future.
And on and on. But Mitch Daniels didn’t bother to repeat any of those numbers. Instead, he claimed that just the interest payments on debt alone would force us to stop educating our children, which is patently absurd. He then claimed that historically, when countries reach a certain threshold of debt, they fail. But he didn’t say what that threshold is or cite any examples from history — he’s probably just misreading Reinhardt, as the GOP tends to do — nor explain why he believes the US is even remotely close to such a threshold when it’s clearly not. Once again, the government’s 10 year interest rate is around 1.8 percent . . .
Daniels is the “moderate” Republican that gets people like George Will all excited, because, I assume, he thinks Daniels at least has some tenuous grasp of reality while most of the presidential wanna bees don’t. Nope. Stick to baseball, George, where the statistics are there for all to see.