RWP was born in Manchester, in the north of England, in the late 1950s, so he is very old. He really liked the north of England, which by 1965 was hip and had three TV channels, and where he went to a coed school. His parents, for reasons best known to themselves, then yanked him away, to Belfast and then Dublin, which had one TV channel that started up at 6 pm with the Angelus (Catholic call to prayer). He also had to go to an all boys school, where he realized he really missed girls. This probably let him focus on schoolwork, though, and at age 19, after he had finished college, he set off for America, where he still resides. He has a bachelors degree in biochemistry and a Ph.D. from Harvard in biophysics, and has lived also in Mainz, Germany, Setauket NY, and Richland WA. He currently divides his time between Nebraska, Rosslyn VA, and Florida.

Thursday, August 23, 2012

Bob Kerrey's shocking economic ignorance

Bob Kerrey tweeted the following astounding misstatement yesterday
Speaking in Omaha: "The last time our spending was at 18% GDP, Thomas Jefferson was President." #nesen
You can look up US Federal spending as a percentage of GDP in all sorts of places, including the White House website, but I like this graph.

First things first; obviously Kerrey is ludicrously wrong. Spending was below 18% of GDP as recently as 1966, and it was 18.2% of GDP in 2000 and 2001. Deb Fischer's goal of returning it to 18% of GDP is entirely reasonable, from historical standpoint. But look at what this says about Kerrey's conception of the federal government. The US govt. during peacetime consumed 3% or less of GDP until 1930. Wars obviously vastly increase expenditure, and you can see a ratchet effect in a graph; after every war, spending comes down, but not to the previous baseline. A better argument for Ron Paul's policy of non-intervention I can't think of.

Bob Kerrey has a completely different, and completely wrong, mental picture of the historical role of the federal government. He sees it as consuming almost a fifth of the nation's wealth almost all the way through the 19th century, when it actually consumed 2 - 3%. Peacetime federal spending only really exploded under the New Deal, and it took blackmail of the Supreme Court to allow the federal government to assume that role.

Seriously; if you are that ignorant of the economic history of the United States, how can you credibly be trusted to reform entitlements?

It wasn't just a one-time misstatement either. This is what Kerrey said in Falls City on July 31
“We’re spending 16 percent of the GDP - it hasn’t been that low since Thomas Jefferson was president,” he said. “Deb Fischer says we can balance the budget with nothing but cuts? If you do that, you’re going deep into Social Security. You’re cutting deep into Medicare. You have to have additional revenue. And there are terrific Republicans in the Senate right now who understand that reality. Yes, we have to have cuts, but we need additional revenue too."
I think he meant we're taking in 16% of the GDP in Federal tax, but really, who knows?

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