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I think that the best thing is that it shows it is possible! More interestingly, it does not even seem to require all out austerity measures. For example, if you choose "Cap Medicare growth" and "Reduce the number of troops in Iraq and Afghanistan to 30,000 by 2013" you are halfway there for 2030 with only those two choices.

Go on to choose "Eliminate Loopholes but keep taxes slightly higher", "Reduce Tax Break on Employer-provided Health Insurance", "Payroll tax: Subject some incomes above $106,000 to tax" and the 3 largest cut-military-spending options and you are done. Sure, these things aren't as side-effect-free as they sound, but it almost sounds feasible and does not require flour sacks and cat food.

You don't even have to raise the taxes - all you have to do is more eligibility for social security to 70 and that alone will get you half way there, combined with ending the waste in Iraq/Afghanistan and that is all that is required.

And ending farm subsidies is a good thing, in any case. Even if that would not save any single dollar. (Just getting rid of the market distortion would be good enough.)

Market distortions are unilateral evil only under a ton of economic assumptions. I don't know enough about the US agriculture foods market (let alone how exactly is it subsidized) but I would imagine it to be reasonable to provide your farmers with some kind of protectionism against foreign suppliers because the latter definitely have lower costs, with cheap labor, less legalities, whatever. You really don't want to depend on some China for your food supply.

...and also you want to make sure that you have a fair bit of domestic food production in case war or some other geopolitical event causes imports to become expensive or unavailable. It's potentially a life-and-death question. You Americans don't have a lot of history with this, but Europeans have.

The USA is a major producer and exporter of food, most of which doesn't get subsidies. Reducing or eliminating the subsidies on corn, sugar, peanuts, and milk wouldn't make that change. We are the most successful agricultural producer on Earth.

Conversely, you may _want_ interdependence for exactly this reason. If two countries are dependent on each other for basic needs, they will not be able to go to war.

This kind of reasoning was the seed for the European Union: by joining the coal and steel industries of France and Germany into a single entity, the European Coal and Steel Community was thought to make further wars in West Europe practically impossible.

The US is the worlds largest exporter of grain. I think we'll have enough even without subsidies that strangle African farmers.

Its one thing to do protectionism (if you want to ensure a base level on quality, codify that in law and put harsh enough penalties on it that people follow them), but the way the US does it is that they subsidize corn production, but put protection in against foreign sugar which means sugar is very expensive, but corn is cheap and so is used as a substitute.

Not to mention it's used as a substitute for other, less well subsidized US grown produce.

We protect the Sugar industry from Brazilian sugar mostly because the Florida Sugar growers have clout. We subsidize the corn industry to make fuel at 3 times the cost Brazilian sugar would cost because the Presidential elections start in Corn country. We protect the peanut farmers for God knows what reason, and we subsidize the cotton producers because that area also is critical in early elections. We depress the price of milk, too, mostly because it plays well with Middle America.

And to top it off, it's distorted the food we produce. Corn seems to have become the go-to crop for almost everything, where possible, even when it wouldn't normally make sense. It has made sugary diets more affordable than they would be otherwise, which has had bad consequences for Americans' diets, which feeds into the extremely high medical costs we face, lowered productivity, and a host of other problems.

I would say the farm subsidies are one of the worst government programs in place today, in terms of the well being of the US populace and economy.

Biofuels are another example of a disastrous subsidy program, but not on quite the same level.

Actually corn hasn't made sugary-diets more affordable. Look up the prices. Corn-syrup couldn't compete with Brazilian cane sugar, even with subsidies if it weren't tariffs.

I agree though. Corn syrup is probably worse than cane sugar.

Biofuels from corn are very wasteful. Biofuels from, say, Brazilian sugar cane, again, are much better energy for money.

Ah I didn't realize that sugar was more expensive than unsubsidized corn syrup because of tariffs. Good to know, thanks.

Not really. In fact the subsidies you're talking about usually don't even benefit the group they're purported to target.

For example, take the gasoline subsidies in Iran. The group the subsidy purportedly helps is the poor. Yet, if you look at the demographic and vehicle usage data, the middle class and rich have more cars and drive more, hence claiming most of the benefit from the subsidy. If the government of Iran really wanted to help ameliorate the cost of fuel for their poor, they'd hand out coupons for free gasoline/diesel directly to the poor.

This also applies to American farm subsidies. The only reason they're in place is because politicians claim to be protecting "family farmers". Yet, if you look at the statistics, family farms haven't been the primary form of American agriculture for almost three generations now. The vast majority of the subsidy goes to helping corporate farms, simply because the vast majority of all farms in America are owned by corporations. If the government really wanted to protect family farmers it would simply write them a check for the amount of the subsidy every year.

No, I'm with the parent. These subsidies do nothing but distort the market in favor of entities that don't need the help in the first place. Let them go.

You could save even more money by eliminating social security altogether, yet it is a useful service that shouldn't be dismantled for the sake of budgets alone. When cutting its important to take into consideration why something was started.

Or even better: Why something is useful right now.

But there's enough waste you can cut, without impacting on the worse off too hard.

I think that increasing eligibility for social security to 70 is dumb. It should be linked to something, like life expectancy. Without a formula we have to face the same upheaval every time people live longer.

Sure but that wasn't an option to pick.

I love multiple-choice tests where someone that I disagree with most of the time gets to pick the options.

I think that's the other side of the coin - which the puzzle sort of glosses over. Costs are going to go up wildly, mainly due to increased health care costs and an ageing population. Without either capping medicare or increasing the retirement age, you have to slash a whole bunch of stuff to make up an equivalent amount.

I have some questions for you:

1. What state decided the 2000 election?

2. What state has a huge retiree population?

3. What state, which was once a safe Republican state, was a swing state in 2004 and 2008 and will likely be a swing state in 2012?

Hint: the answer to all three is "Florida".

Raising the minimum age wouldn't hurt people who are already retired. But that wouldn't stop the AARP from mobilizing its entire membership against it, of course.

All you have to do is cap medicare growth? Wow, that's easy.

How's that work? How do you "cap" it? Obamacare was a huge process just to limit future growth, and it involved talk about "death panels" in order to make incremental reform happen. What's a straight "cap" look like?

Well the specific proposal the New York Times cites would essentially put Medicare funding on autopilot. Instead of letting Medicare funding be dependent on the whims of the current Congress it would allocate 1% of GDP to Medicare every year. It would be up to the Medicare administrators to determine how to spend that 1%.

I think its a good idea, but its so politically infeasible, it may as well not be considered. I mean, anyone who tries to defend a hard limit like that is going to get totally mauled by the other party, who will demagogue it as, "You're going to kill seniors by taking away their health care."

There's a hard limit on it today, this would just make the hard limit consistent.

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_categor...

no one on either side of the aisle wants to touch cutting anything that will actually matter

Have you seen Paul Ryan's "Roadmap" budget?

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.

It's heartening for me to see a realistic plan to balance the budget that doesn't start with the assumption that current spending levels are fixed.

> One last eye-opener: this only helps plug up the year-to-year budget deficit. The actual national debt is $13.5 trillion...

This. The political reality is that people scream bloody murder when even the "small ticket items" are changed. There is no possible way the people and the politicians they elect will face and solve this budget crisis in time to avert a crisis. The NYT "game" should have had one check box at the bottom labeled "continue to borrow until the dollar is destroyed". But people dismiss this danger as just abstract theory and rationalize it on the Russian Roulette Principle (we got away with it in the past).

As an aside, there are all sorts of unidentified or implicit errors and bad theories built into this game which makes it a pointless exercise and impossible to actually judge. For example, If you reduce the tax break for employer-provided health insurance it shows up as a spending cut but that is actually a tax increase on imputed income. Another example is that if you cap Medicare growth the economic implication (especially if inflation takes off) is price-fixing or rationing of services. This is Econ 101 (it won't work) but the average person probably does not have the analytic skills to see the cap for what it is.

Nothing, including capping Medicare, will "work" if you mean "provide all possible health care to seniors."

Medical science is wonderful, but it's moving faster than the overall economy - the things we can do are advancing faster than our ability to pay. There will simply be too many old people, with too many health problems, to provide top-flight treatment to everyone. Someone will have to tell them "sorry, you don't get that procedure." The only remaining question is: will that decision maker be a health insurance company, a government official, or the health provider refusing to work without payment.

Seniors, and their children, will loudly demand that the government pay their health bills, no matter what the economic wreckage. That's why we need to lay the political groundwork now. Pundits, economists, and anyone else who can understand the situation should be repeating loudly and repeatedly: Health care is not a right, because it can't be. All of us will die, eventually. Most of us will die even though a treatment exists that could have extended our lives a bit. We need to get used to that fact.

I agree with you, health care is not a right, and did not mean to imply that somehow Medicare could be made to work if proper econ principles were addressed. I was just pointing out the theories and implications behind the example of a seemingly simple choice as "cap Medicare".

Also there are important historical questions like how did we get to this point -- something traditional MSM like the NYT has been horrible at explaining. These political issues are raised mid-stream (e.g. how do we cut spending or raise taxes to balance the budget) without any context or question of causes. For example, the other issue I mentioned, income tax exemption for employer-provided health insurance, arose from a prior policy of wage and price controls during WWII. Employers were banned from offering higher wages so they offered non-taxable benefits as a substitute as a means to circumvent the controls and effectively raise wages. The point here being that capping Medicare will be a failure like capping prices and wages during WWII and lead to all kinds of unwanted effects, including further increasing the complexity of the tax code and the government intrusion into our lives.

I also agree that irrational and impossible demands on the government will continue until "economic wreckage" puts an end to it. If we somehow "solve" the budget crisis through some combination of tax increases and spending decreases, but people continue to believe that the government is Santa Claus, then any such solution will be temporary at best. Given these socio-political realities, the end point, in my judgment, is hyperinflation and the destruction of the dollar. I sincerely hope that I am wrong.

Edit: Spelling

> Health care is not a right, because it can't be.

If that's meant to be justified by what went before it, then I think you've overstated it. As long as many effective treatments are very expensive, health care that includes every treatment a person might reasonably want can't be a right.

It's perfectly possible for some health care to be a right. And if by some miracle (and it would have to be a miracle, or something very like one) all the costs came way down, it would be possible for all the health care one could reasonably want to be a right.

The second of these points is, at least for the foreseeable future, merely a quibble. The first is not. It is entirely possible to make some health care -- quite a lot of health care, in fact -- into a right. That's how things are in the UK, for instance, and despite the attempts of some in the US to portray our health system as a disaster, I don't think I know anyone in the UK who doesn't strongly prefer the UK system to the US one.

(I'm taking "right" to mean "thing guaranteed by law" rather than "thing to which one is morally entitled". I take it that was your meaning too.)

Health care is just another example of the "The government owes me something" mentality. We do not need another government program that will only increase in cost that will never go away once it is started.

"I am for doing good to the poor, but I differ in opinion of the means. I think the best way of doing good to the poor, is not making them easy in poverty, but leading or driving them out of it." - Ben Franklin, 1766

How could you call "getting out of Iraq" a small item? Iraq's financial black-hole it quite big by itself.

Iraq's actually a pretty big ticket item on the list. It's an order of magnitude above things like getting rid of earmarks. Amusingly, it saves about three times as much money as getting out of Germany and Japan!

Actually I'd argue that it's the opposite - all you have to do is take cash cows from both sides (Republican: Defense budget and wars, tax cuts, Democrat: Federal employees, medicare, social security)* and take them out in a field and shoot them in the head. Problem solved.

* Both parties priorities listed in order of lobbying dollars.

With enough hype, the NYT is doing a good job in taking things away from K street. It's what journalism is all about.