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By Steve Levy

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About this blog: I grew up in Los Angeles and moved to the area in 1963 when I started graduate school at Stanford. Nancy and I were married in 1977 and we lived for nearly 30 years in the Duveneck school area. Our children went to Paly. We moved ...  (More)

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Take the Deficit Reduction Quiz

Uploaded: Nov 14, 2010
The New York Times has a deficit reduction quiz based and a series of related articles on their homepage today.

Here is the link to the quiz.

I made my choices and balanced the budget in less than five minutes.

Here are my cholces

I would go further and let the Bush tax cuts expire for folks making more than $100,000 or $150,000 but possibly keep the low rates for capital gains and dividends. This would save even more money while preserving investment incentives.

I invite readers to take the quiz and share their choices.
What is it worth to you?


Posted by Greg, a resident of ,
on Nov 14, 2010 at 3:27 pm


How funny, I seemed to have missed the question:

Eliminate all unnecesaay restrictions of the licensing of new nuclear power plants...savings $500 billion.

Why do you think that question was not in the NYT quiz, Stephen?

Posted by Anon, a resident of ,
on Nov 14, 2010 at 3:37 pm

I tried it too. Here is my version:

Web Link

Our plans have some similarities, but, I'm in much more in favor of returning taxes to the Clinton-era levels: we had plenty of economic growth and plenty of investment.

[I think "malpractice reform" is a red herring -- I think fear of malpractice makes very little difference in cost of treatment. (Warning -- family members were doctors). Malpractice is sometimes the only recourse you have and the only way to get bad doctors out, since the profession policing itself generally doesn't work.]

The long-term deficit problems are caused by rising medical costs, and, that is the number one priority in addressing the deficit problem long term. I think we need to address that problem by getting insurance companies out of the loop for most people, one way or the other.

Posted by stephen levy, a resident of ,
on Nov 14, 2010 at 3:58 pm

stephen levy is a registered user.

Thanks Anon.

We are actually closer. I agree about health care costs and did not check the "cap on growth" box only because it seemed rigid and did not emphasize cost savings through best practice solutions.

And I am open to more substantial roll back of the tax cuts to folks making more than $100,000 or $150,000/

Posted by Greg, a resident of ,
on Nov 14, 2010 at 4:56 pm

Lot's of zero-summing assumptions here. What we need is a massive mulitplier, like nuclear energy. Nuclear has an enormous amount of positives, like clean and cheap base load energy, a lessening of the military requirement to protect the oil supplies around the world, well-paid domestic jobs, nuclear technology development (that can be exported safely) and a safe security blanket for our country.

Perhaps even more important, is that the Amercan people will wake up to reality. Stephen, when will you wake up to this fact?

Posted by My results, a resident of ,
on Nov 14, 2010 at 6:15 pm

Mine for all it's worth.

Web Link

Posted by My results, a resident of ,
on Nov 14, 2010 at 6:17 pm

Note: mine does not just eliminate the deficit. It creates a surplus

Posted by Sharon, a resident of ,
on Nov 14, 2010 at 6:27 pm

IBM Consulting has offered to help bring the Fed Administration up to date and save 30 to 40% of its costs to the US taxpayer.

IBM is still waiting for a reply--

Posted by stephen levy, a resident of ,
on Nov 15, 2010 at 7:30 am

stephen levy is a registered user.

One on my friends took the quiz. Here are his choices.

Web Link

Join the conversation==conservatives, liberals and folks in the middle.

Take the quiz and add your voice to this national discussion.

Web Link

Posted by My results, a resident of ,
on Nov 15, 2010 at 2:12 pm

Hi Stephen,

Ouch, your friend's proposal would be very painful for us. We are a one income family and the wage earner is a... civilian federal employee. We are already just barely able to scrape by on this income here in Palo Alto. I can't imagine how we'd do it with a pay cut.

What you need to know is that as a federal employee, in 2007, you earned much less than someone in the private sector. True, we have not had a pay cut, but we have not caught up either, far from it. Do you also know what our raises are based on? They are based on the increase in the levels of social security pension payments. It's been very symbolic only the last couple of years. Furthermore, do you know that the Federal pay scale is nationwide? What would be a nice salary elsewhere in the country is paltry here in Silicon Valley. The other one of us is disabled (and gets no money from anyone, government or private sector for it). So going back to work is an impossibility.

If on top of that you cut our mortgage interest deduction or eliminate it, we'll be in deep trouble. It's our only tax break. We would be facing bankruptcy and/or would have to move away from here. We have children in school and college too...

On the other points, I overall agree with your friend's ideas. Small consolation though.

Posted by stephen levy, a resident of ,
on Nov 17, 2010 at 8:52 pm

stephen levy is a registered user.

My Results,

Your response indicates the dilemma we face. All of these proposed changes affect someone negatively. And I am not arguing for my friend's selections over yours.

My hope was that through this post we could get discussion of these choices here in Palo Alto and I am disappointed that readers are looking at the post but choosing not to participate although it is completely anonymous. I thank you for taking the time to participate and offer your perspective.

Our family goes to Panda Express from time and I hope the new location does well.

But to have more responses on the possible opening of a Panda Express than on solving the national budget challenge is a bit hard to understand in a place with strong opinions like PA.

Posted by Greg, a resident of ,
on Nov 17, 2010 at 10:40 pm


Let us know, definitively, where you stand on nuclear energy. Some gravitas, Stephen. No more zero-sum stuff! It is time.

We need serious GROWTH in this state, not more hallow hopes and mysterious, magic economics.

Nuclear is the future. It is time to stop being part of the past, Stephen.

Posted by Regretfully, I bit, a resident of ,
on Nov 18, 2010 at 5:35 am

I finally bit, knowing I was going to get irritated by a very highly selective, biased "solutions" menu..and it was.

Bottom line, this survey reflects the leftist's mentality of raising taxes ( which does not understand..the higher the taxes, the less the economy grows...when will we learn from every other nation which has done this, as well as every state in our union that is failing, including ours??) while throwing a sop at a few, minimalist, spending cuts, mainly aimed at military, a little at tightening disability definitions, a little at cut of fed employees salary.

Sorry, not gonna play with that ball.

Bottom line, cut spending across the board to 2006 levels..cut the new entitlements of Bush completely out, the increased Fed spending on k-12 education ( he doubled it under NCLB), and the new Medicare Drug entitlements. Raise social security and medicare entitlement ages gradually to 70, depending on age of working citizen right now ( can't do it to someone 64, but CAN gradually increase for those younger).

Just going back to that simple standard of 2006, a mere 4 years plus cut of those 2 entitlements, along with stopping illegal immigration, and maintaining our current tax code, for a commitment of 10 years, would explode our economy. Then, commit to putting the extra money flowing into the Fed coffers into reducing our debt..and problem is on the way to solved.

Biggest problem I had with the "Old RINOs" like Bush et al is that, yes, they knew how to grow an economy even after a big hit like 9/11,. and we had the most money flowing into our Fed coffers of ALL TIME back in 2006,.... but then they SPENT IT ALL, ..and that was the problem.

I was so disappointed.

Posted by Anna, a resident of ,
on Nov 18, 2010 at 6:08 am

Levy's solution is mostly higher taxes and military cutbacks. His friend's solution is even more radical. Even the "bipartisan" commission set up by Obama, and the (also putatively bipartisan group headed by Alice Rivlin and Peter Dominici) have about 3:1 spending reduction:tax rise ratios.

I would expect that conservative or libertarian (as opposed to liberal) solutions would have much higher ratios of spending to taxes - perhaps even infinity. So what? We're split on philosophies of government.

A weakness of the NY Times quiz is that the results do not show how much of the GDP government consumes under the various scenarios. Currently, the federal government spends upwards of 26% of GDP and taxes about 18-19% of GDP. (Historically, spending is about 21% of GDP and taxes a little less than 20% on average....This shows why the deficit has been steadily and inexorably rising over the past three or four decades. And it shows how radical the spending increases of the current administration have been.)

Another - major - weakness of the discussion here is that it does not deal with the effects on the growth of the economy under the choices made here. Many of the budget problems we have will be much less in the future if we have robust economic growth than if we have anemic growth. There's not much dispute that larger government spending and taxes will in the long run retard economic growth as opposed to smaller spending and taxes. (There is a lot of dispute over how much any particular amount of government will retard growth to be sure. And nobody here - including particularly Levy - knows enough to opine intelligently on the subject.)

Over the long run, the effects of growth are overwhelming. (To take an extreme example, in 1960, Hong Kong's GDP was approximately the same as the average GDP of African countries. Five decades of robust growth have made Hong Kong's poorest residents fabulously rich compared to the typical African.) We will be much more able to balance the budget in 2030 (or 2040 or 2050) if we pursue high growth policies than if we burden the economy with government spending and taxes.)

I expect that an expert economic opinion would predict that the relatively high spend/high tax soluti0ns of Levy and his liberal friends would leave our children much poorer than necessary in a few decades. Pity that the NYT quiz doesn't deal with this essential part of the discussion.

Posted by Perspective, a resident of ,
on Nov 18, 2010 at 6:15 am

Federal budgets over the last 10 years

Web Link

Yes, we had "surplus" 1998-2001...by cutting our military coincidentally precisely the amount of the "surplus". Which we had to re-enact post 9/11. Take what you want from that.

For those of you who loved Clinton, let's go back to HIS spending levels of 1998..If that is too little for you, then pick any year after that, since it grew every year, until you find a year you can live with. Any of them will be at least a trillion/year less than we are borrowing now.

Bottom line, government has grown every year, regardless of who is in power, regardless of what our economy is like, exponentially in the last couple years. We have to reverse it.

We must stop our spending from the endless non-existent money tree.

Posted by stephen levy, a resident of ,
on Nov 18, 2010 at 8:15 pm

stephen levy is a registered user.

I don't see why the cut government crowd won't take the challenge and just complains about the rules.

Here is a 100% cut spending solution

[Web Link The 100% cut solution]

But here is the real challenge and why everyone should get involved.

Today's CNN poll

[Web Link

says my choices are unpopular but the conservative cut spending choices on Social Security, Medicare, Medicaid and even farm subsidies are unpopular.

If people concerned about our fiscal future can't come to some agreement then the budget will remain out of control.

My choices ended up as roughly 50% spending cuts and 50% tax increases.

If you don't like my choices there are plenty of others on the list.

How about taking the budget challenge and posting your choices?

Posted by Perspective, a resident of ,
on Nov 19, 2010 at 6:41 am

I did "take the test" Mr. Levy, but did not submit it, not willing to be a tool in yet another highly biased "survey" with extremely limited options to support the foregone conclusion desired...which is to raise taxes, cut military.

That is what the left in this country has wanted since after JFK, ( he, on the other hand, understood economics), and I won't play with that ball.

I will not let my opinions be defined by that template.

Simply go back to the spending levels of any time before now, and I will be happy. Even to just 2 years ago. Start there, then keep chiseling.

Do the very odd thing that the rest of us have to do..live within what we make, or go bankrupt.

There is the continued fallacy promoted by folks who have yet to learn from history, from FDR through now in California, from France to Cuba...the more we confiscate from producers, the less we all have to actually use.

Stop confiscating from producers, stop the never ending spiral of shifting the tax burden to fewer and fewer people ( only 52% of us pay any Federal taxes at this point in our nation's history..the top 25% pay 86% of all the bill)..and guess what? We will explode. Spread the tax burden wider, decrease it on those who produce jobs, and voila, more jobs, more tax base.

What brings in more money into the tax coffers? 100,000,000 employed people, all paying something, or 10,000,000 people paying a lot? Just asking a hypothetical, not based on any actual numbers, to get the point across.

In other words "spread the burden", not "spread the wealth", works a lot better for all to rise.

What works better to encourage risk taking and hiring? Fear of having the benefits, if the risk-takers win, confiscated by the Feds, fear of being regulated out of business, fear of being a "loser" in the govt picking winners and losers? Or people knowing that if they win, they get to keep their winnings and continue to grow them without interference?

Think of a raffle, or a lottery. How many takers would you get in a lottery that costs $100, if the most the winner could win was $200? How many takers if the most you can win is $1,000,000,000? How many if the most has another zero? How many if the winner didn't know what he would be allowed to spend it on? How many takers if the winner knew that as soon as he won, the govt would arbitrarily decide, at that time, how much it would confiscate, and how the winner would be allowed to utilize the winnings?

Apply these basic rules of human nature to us, the people of the USA, trying to create businesses, and you will see why your basic game rules don't work.

That is why we won't play the game by the NYT/Democrat "rules". The rules ignore the reality of human behavior results.

And results count.

Posted by Anon., a resident of ,
on Nov 24, 2010 at 8:54 am

I solved the deficit in 2 minutes - WTF is Washington's problem?:

* Cut foreign aid in half
* Eliminate earmarks
* Cut 250,000 government contractors
* Reduce nuclear arsenal and space spending
* Reduce military to pre-Iraq War size and further reduce troops in Asia and Europe
* Reduce Navy and Air Force fleets
* Cancel or delay some weapons programs
* Reduce the number of troops in Iraq and Afghanistan to 30,000 by 2013
* Reduce the tax break for employer-provided health insurance
* Reduce Social Security benefits for those with high incomes
* Return the estate tax to Clinton-era levels
* Payroll tax: Subject some incomes above $106,000 to tax
* Millionaire's tax on income above $1 million
* Eliminate loopholes, but keep taxes slightly higher
* Reduce mortgage deduction and others for high-income households
* Carbon tax
* Bank Tax

Posted by bru, a resident of ,
on Nov 24, 2010 at 9:02 am

bru is a registered user.

I agree with the first poster on nuclear energy, however for the next 30 or so years I think all nuclear plants should be run by a branch of the government ... specifically NASA as a profit generating concern in order to free us from coal and oil imports by moving to an all electricity economy .. with solar and wind, etc too.

In 30 years the plants should be sold off to private industry since private industry, when regulations and protocols are in place, since private industry now cannot seem to do nuclear with major abuses, fraud and incompetencies. Hopefully NASA can.

Also, anyone living within 5 miles of a nuclear reactor should be given free internet access and a subsidized geiger counter as a measure of seriousness and transparencies about safety. All the readings ... before and after plant installation should be publicly available and any incident should be publicly posted an resolved.

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