Four problems with the New York Times' deficit calculator
The New York Times has an "interactive deficit puzzle " that allows readers to attempt to "fix the budget" through various tweaks to spending and tax policy. There's a lot to like about the project, starting with the fact that it is an attempt to educate readers about policy rather than speculate about politics. (Bonus: No mention of the word "Palin.") And it does a good job of driving home the point that the standard talking-point approaches to the deficit won't do much: Users can choose to cut foreign aid in half, completely eliminate earmarks and farm subsidies, reduce the federal government workforce by 10 percent, cut the salaries of those government workers who remain by 5 percent, cut 250,000 government contractors, cut aid to states by 5 percent, and cut funds for the Smithsonian, National Park Service, Office of Safe and Drug Free Schools -- and see that all of that combined would barely make a dent in the long-term budget shortfall.
So, that's useful. (More useful still would be a decision to never print a quote from a politician talking about balancing the budget by cutting "waste, fraud and abuse" or "foreign aid" or government payroll without reminding readers that such steps would do very little to fix the problem.)
But I have a few problems with the Times' project.
First, the choice to devote such journalistic resources to the deficit suggests that it -- rather than, say, getting the economy moving and reducing unemployment -- is the nation's most pressing economic problem. That's questionable at best -- and may be counterproductive even from a deficit standpoint. As the Brookings Institution's Henry Aaron noted  in critiquing the Bowles-Simpson plan, "[P]remature deficit reduction could intensify and lengthen the recession. This is not a minor issue, as nothing more effectively depresses revenues and generates deficits than a weak economy." The Times should consider a similar project that focuses on economic growth and jobs. (Added incentive: In doing so, the Times would be giving the people what they want .)
Second, the Times package offers readers little information about the consequences of their choices. For example, readers are told they can shave $24 billion from the long-term budget shortfall by reducing the Navy's battle fleet from 286 ships to 230, and by reducing the number of fighter jets purchased by the Air Force. But I'd be shocked if one reader in a hundred has any idea what that would do to the nation's ability to meet its national defense needs -- and the Times doesn't provide so much as a hint. Likewise, the Times lets readers reduce the mortgage-interest deduction, the benefits of which "flow mostly to high-income households" -- but doesn't tell readers what "high-income" means, or offer any indication of how the reduction would affect anyone. Readers can choose to "Reduce the tax break for employer-provided health insurance," but they aren't told how those reductions would affect their tax bill. And so on.
Third, the Times tells readers  "No matter what you pick, keep in mind the potential effects on economic growth. Arguably, economic growth is the most important yardstick for any plan, because growth can do much to reduce the deficit, as it did after World War II and in the 1990s." Good! But at no point does the Times help readers understand the potential effects their choices would have on economic growth. In all, the Times offers readers 40 budget changes to choose from, each with descriptive blurbs -- and not one of them makes even passing mention of the concept of economic growth. To pick just one example, readers would benefit from an indication that cuts to aid to states could have a dampening effect on economic growth, as the Center on Budget and Policy Priorities makes clear :
Cuts to state services not only harm vulnerable residents but also worsen the recession — and dampen the recovery — by reducing overall economic activity. When states cut spending, they lay off employees, cancel contracts with vendors, reduce payments to businesses and nonprofits that provide services, and cut benefit payments to individuals. All of these steps remove demand from the economy.
Fourth, the Times' project is plagued by the usual reliance on "some say … others argue" reporting that carefully avoids telling readers what is true, or giving them enough information to decide for themselves what is true. Though perhaps that is for the best: When the Times does get around to making judgment calls, the results are questionable. For example, the Times tells readers that the "most moderate" of the estate tax options is the one which taxes large estates the least. That's right: According to the New York Times, a proposal that completely exempts from taxation estates worth $4.9 million is the "most moderate" option. The Times construct suggests that the least moderate approach is to return to the estate-tax policies of the Clinton-era -- when, as you may remember, both the overall economy and the wealthy were doing just fine.