"Divide each difficulty into as many parts

 as is feasible and necessary to resolve it."

from  'Discourse on the Method of Rightly Conducting the Reason, and Seeking Truth in the Sciences' (1637 A.D.)

Simplify Your Future

Simplify Your Future from Bruce Kasanoff

26 Time Management Hacks I Wish I'd Known at 20

26 Time Management Hacks I Wish I'd Known at 20 from Etienne Garbugli @egarbugli

The Earth At Night from the International Space Station

Where did the mammoth US budget deficits come from?

Let's go back about a decade, when budget surpluses were predicted for the foreseeable future. Somehow, the math went terribly wrong, by trillions of dollars. Here's an accounting of what happened.

By Peter Grier - The Christian Science Monitor

What’s the cause of the federal government’s huge budget deficits? That’s a question that is harder to answer in the particular than you might think. The general problem is obvious: Uncle Sam has been spending more money than he takes in. The specific reasons as to why this state of affairs exists are a mix of human decisions, economic circumstance, and the cumulative effect of time.

Context is important here. So let’s start with 2001. That year, the Congressional Budget Office looked out over the decade to come and saw ahead nothing but blue skies and black ink. It predicted that between 2001 and 2011 the US would run budget surpluses totaling $5.6 trillion.

That didn’t happen. Instead, the US racked up $6.1 trillion in deficits over that period. CBO’s prediction was a whopping $11.7 trillion off the mark. How did things go so wrong?

CBO has gone back and studied that, as it happens. In a paper published earlier this year, the group’s economists tried to pull out and compare the reasons for the multitrillion swing.

One big problem was that CBO isn’t magical. Unblessed with the ability to predict the future, it didn’t accurately foresee the economic troubles of coming years, including the crash of the Great Recession. This meant that less tax money came in than anticipated. Overall, CBO says that about $3.3 trillion of its $11.7 prediction error can be attributed to “economic and technical changes” to projected revenues.

Then there were the tax cuts. President George W. Bush instigated most of these, but President Obama also pushed through Congress a payroll tax cut intended to pump money into a moribund economy. Tax cuts accounted for a further $2.8 trillion of the $11.7 trillion discrepancy. (Yes, the big kahuna here is Mr. Bush’s 2001 reduction in income-tax rates, which alone accounts for about $1.2 trillion in revenue foregone over the decade.)

Finally, there are the increases in outflows unpredicted by CBO. Between 2001 and 2011, increased discretionary spending amounted to about $3 trillion. This category includes defense spending related to the wars in Iraq and Afghanistan, homeland security upgrades in the US, spending on food stamps and other hard-times safety net programs, and other general budget categories that are supposed to be approved annually by Congress.

Mandatory spending – a category that includes the Medicare prescription-drug program approved under Bush, the TARP bank bailout, and Mr. Obama’s economic stimulus package – went up by about $1.4 trillion during the period in question. (This type of outflow is called “mandatory” not because we had to do it, but because it results from formulas established by Congress instead of appropriated dollar totals.)

Charles Blahous, a former economic official in the Bush White House who is currently a Hoover Institution research fellow, has rolled all these numbers together into a simple pie chart. His answer to the question “where did the $11.7 trillion go?” is this: 27 percent went away due to projection inaccuracy; 24 percent went to tax cuts; and 49 percent can be accounted for by various forms of increased spending.

Yes, yes, but who’s to blame? It’s election season, after all, and accusations as to which party is responsible for most of this damage are as thick on the ground as October leaves after a windstorm. Asked why the debt has increased during his four years in office during a “60 Minutes” interview last week, Mr. Obama pointed a finger at his predecessor:

“Over the last four years, the deficit has gone up, but 90 percent of that is as a consequence of two wars that weren’t paid for, as a consequence of tax cuts that weren’t paid for, a prescription-drug plan that was not paid for, and then the worst economic crisis since the Great Depression.”

That answer is not accurate. Obama appeared to be talking about numbers that reflect the cumulative debt since 2001, not just his term. According to a White House-produced chart on the national debt, if you take the 10-year period of 2001 to 2011, Bush policies accounted for 55 percent of that figure. Obama-initiated policies such as the stimulus accounted for 11 percent, while the recession took care of the rest.

(The White House chart puts the total debt at $12.7 trillion, not $11.7 trillion, as does the CBO. The White House uses different underlying economic assumptions.)

But even that chart is something of an apples-to-mangoes comparison. Bush was president for eight years, and Obama for three. This is where the passage of time comes in – Bush’s tax cuts in particular had more time to accumulate and thus appear as a bigger part of the overall picture than the later-arriving Obama stimulus package.

Washington Post fact checker Glenn Kessler has looked at this in depth, and made his attempt at adding up who is responsible for the $1.3 trillion 2011 deficit alone. His rough estimate is that economic factors accounted for about 46 percent of this single-year shortfall, while Obama policies accounted for 44 percent, and Bush-era policies for about 10 percent.

Splitting up deficit causes by administration may be politically interesting. It’s possible, though, that it’s effectively pointless, in that it doesn’t lead to a better understanding of the choices that will confront US policymakers in years to come.

A more useful way of looking at things could be to reslice deficit numbers into cyclical and structural figures. The cyclical deficit is caused by stuff that varies from year to year, like food stamp spending, which is driven by unemployment. The structural deficit is welded into the structure of the federal budget like steel beams. It reflects chronic problems that only worsen, such as the rising cost of health care.

According to CBO, about $367 billion of the $1.3 trillion 2011 deficit was caused by cyclical stuff. Some $928 billion was structural. This is the part we really need to worry about, according to such budget watchdog groups as the Concord Coalition.

The most important of these structural factors should come as no surprise. They are the aging of the baby boom population, which will drive up the number of people enrolled in Social Security and Medicare; and the continued increase in health-care costs, which makes Medicare, Medicaid, and other government health-care programs more expensive on a per-person basis.

Population aging accounts for 64 percent of the cost growth of Social Security, Medicare, and Medicaid through 2035, according to a Concord Coalition analysis published earlier this year. Thirty-six percent is due to rising health-care costs.

“Borrowing our way through this is not a viable option because the rising cost of Social Security, Medicare and Medicaid is not a temporary blip. It gets bigger with time. Incurring permanently rising debt would result in staggering interest costs and ultimately a total debt burden that would crush the economy,” concludes the Concord Coalition analysis.

The American Dream Is Now a Myth: Joseph Stiglitz

By Deepanshu Bagchee | CNBC

Once seen as the land of opportunity, the U.S. today is grappling with rising inequality and a political system that benefits the rich at the expense of others, resulting in lower growth and risking the death of the American dream, according to Nobel prize-winning economist Joseph Stiglitz.

"The U.S. worked hard to create the American dream of opportunity. But today, that dream is a myth," Stiglitz wrote in an opinion in the Financial Times on Tuesday.

Stiglitz said U.S. inequality is at the highest point in nearly a century and the gap between those with the median income and those at the top is growing.

"The U.S. used to think of itself as a middle-class country - but this is no longer true," he said. "Today, a child's life chances are more dependent on the income of his or her parents than in Europe, or any other of the advanced industrial countries for which there are data."

According to a Census Bureau report, U.S. household income inequality has grown by 18 percent since 1967, although this trend has slowed in recent years. Wealth disparity is also proving to be a hot topic during the 2012 election year, with Democrats arguing that Republican candidate Mitt Romney's wealth makes him out of touch with ordinary Americans.

According to Stiglitz, regulations, particularly those governing the financial sector are contributing to the disparities. "Financial regulations allow predatory lending and abusive credit-card practices that transfer money from the bottom to the top. So do bankruptcy laws that provide priority for derivatives," he said. Stiglitz argues that Americans were increasingly being made to think that higher income inequality was a byproduct of faster growth, but he says that's a false choice. The U.S. economy grew faster in the decades after the Second World War, when inequalities were lower, than it did after 1980, he said.

"Textbooks teach us that we can have a more egalitarian society only if we give up growth or efficiency," he said. "However, closer analysis shows that we are paying a high price for inequality: it contributes to social, economic and political instability, and to lower growth."

Western countries with the healthiest economies, such as those in Scandinavia, have the highest degree of equality, Stiglitz noted. To prevent the worsening disparities, Stiglitz argues that the U.S. should stop cutting public education and other programs that enhance opportunities for the middle class and the poor.

"President Barack Obama's support for these investments, as well as the "Buffett rule" that asks those at the top to pay at least as much in tax as a share of their income as those who are less fortunate, are moves in the right direction," he said. He criticized Republican proposals to extend the Bush-era tax cuts on capital gains. But a number of economists as well as Democrats have come out in recent months in support of extending the tax cuts. 

"The country will have to make a choice: if it continues as it has in recent decades, the lack of opportunity will mean a more divided society, marked by lower growth and higher social, political and economic instability," he said.

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Obama prepping thousands of lawyers for election

By MIKE BAKER | Associated Press

OLYMPIA, Washington — President Barack Obama's campaign has recruited a legion of lawyers to be on standby for this year's election as legal disputes surrounding the voting process escalate.

Thousands of attorneys and support staffers have agreed to aid in the effort, providing a mass of legal support that appears to be unrivaled by Republicans or precedent. Obama's campaign says it is particularly concerned about the implementation of new voter ID laws across the country, the possibility of anti-fraud activists challenging legitimate voters and the handling of voter registrations in the most competitive states.

Republicans are building their own legal teams for the election. They say they're focused on preventing fraud — making sure people don't vote unless they're eligible — rather than turning away qualified voters.

Since the disputed 2000 presidential election, both parties have increasingly concentrated on building legal teams — including high-priced lawyers who are well-known in political circles — for the Election Day run-up. The Bush-Gore election demonstrated to both sides the importance of every vote and the fact that the rules for voting and counting might actually determine the outcome. The Florida count in 2000 was decided by just 537 votes and ultimately landed in the Supreme Court.

This year in that state alone, Obama and his Democratic allies are poised to have thousands of lawyers ready for the election and hope to have more than the 5,800 attorneys available four years ago. That figure was nearly twice the 3,200 lawyers the Democrats had at their disposal in 2004.

Romney has been organizing his own legal help for the election. Campaign attorney Ben Ginsberg did not provide numbers but said the campaign has been gratified by the "overwhelming number of attorneys who have volunteered to assist."

"We will have enough lawyers to handle all situations that arise," he said.

The GOP doesn't necessarily need to have a numerical counterweight to Obama's attorneys; the 2000 election showed that experienced, connected lawyers on either side can be effective in court.

Former White House counsel Robert Bauer, who is organizing the Obama campaign's legal deployment, said there is great concern this year because he believes GOP leaders around the county have pursued new laws to impede the right to vote.

"The Republican Party and their allies have mapped out their vote suppression campaign as a response to our success in 2008 with grass-roots organization and successful turnout," Bauer said. "This is their response to defeat: changing the rules of participation so that fewer participate."

Several states with Republican leaders have recently pursued changes that could make voting more difficult, including key states such as Florida and Ohio, despite objections from voting rights groups that believe that the laws could suppress votes from low-income and minority blocs.

Republicans dispute that the laws are political, pointing to cases of election fraud and arguing that measures like those requiring voters to show identification are simply common sense. Pennsylvania's Republican House majority leader, Mike Turzai, however, told GOP supporters over the weekend that the state's new ID law "is going to allow Governor Romney to win the state of Pennsylvania."

Independent from the Romney team, a conservative group is prepping an Election Day team of its own to combat possible fraud.

Catherine Engelbrecht, president and founder of True the Vote, said the organization hopes to train and mobilize up to one million volunteers this year, many of them to serve poll watchers. One of the group's main initiatives is to "aggressively pursue fraud reports."

"Being a poll watcher is an age-old tradition and we're fortunate that so many volunteers are ready and willing to take a day off, learn what they need to know and help out at the polls," Engelbrecht said. True the Vote already has thousands signed up to help and had 500 trained election workers monitoring the Wisconsin recall vote earlier this month.

"They serve as volunteer guardians of the republic, to ensure that procedures at the polls are in keeping with state law," she said.

It's one of the efforts that have Obama's team fretting. The Democrats fear that anti-fraud activity could get out of hand, with vigilante poll watchers targeting and intimidating voters who may not know their rights.

"We will have the strategy and the resources to address the threat and protect the voter," Bauer said.

The Obama-aligned attorneys, most of whom are not election experts by trade, undergo training and have materials to show them how to help at the polls on Election Day.

Charles Lichtman, who is helping advise the effort in Florida this year after leading it in the last two cycles, first created the Florida Democratic Lawyers Council after the 2000 election, vowing that there would never be a repeat of that disputed vote. He contends Democrat Al Gore would have won the presidency over Republican George W. Bush if a similar legal infrastructure had been in place then.

Lichtman's efforts have since been replicated for other states. He said that is vital to provide voter protection.

"My experience has been that, in every election, the other side has taken drastic measures to try to suppress the vote," Lichtman said. The volunteer organization has not been involved in the 2012 legal disputes so far, though they are monitoring the developments.

Four years ago, the teams of lawyers organized by Obama and Republican candidate John McCain in 2008 went largely unused since the election wasn't very close.

But this year may be different given all the changes to voting laws — and the closeness of the race in recent polling.

The states with the strictest ID laws require voters to show photo identification before casting ballots. If they don't have proper identification or fail to bring it, they can cast a provisional ballot but must later go to meet with state elections administrators to sort things out before the ballot is counted.

Voting groups see a variety of potential problems, such as how voters are informed of the rule changes, how poll workers handle voters who fail to bring IDs and whether voters are provided adequate notice of the steps they need to take after casting an absentee ballot.

About 30 states have some form of an ID law, with varying methods of implementation.

Legal challenges typically start coming in the weeks before the election, but "litigation has started coming sooner and more vociferously" this year, says Edward Foley, an elections law expert with Ohio State University. That includes lawsuits surrounding Florida's plan to purge ineligible voters from the rolls.

Foley said. "We're in an era of increased litigiousness over the voting process."

He said lawsuits after Election Day may occur only if votes in a battleground state are within the "margin of litigation." That would probably be a difference of just hundreds of votes, a result that would be rare.

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