John McCain Promises to Balance the Budget

Thanks to an article in Politico, I learned yesterday that John McCain has pledged to balance the federal budget by the end of his first hypothetical term in 2013. After living through 8 years of the new “conservative” movement and the current administration’s complete disregard of economic policy beyond tax cuts, I’m all for a balanced budget (as well as the opportunity costs that a balanced budget will no doubt require from taxpayers).

So, I was initially interested - abet a bit skeptical - that McCain has set a balancing the budget as a priority in his campaign.

It turns out that McCain's plan is great as long as you ignore every single detail and assumption that goes into it. hilzoy has a great post that breaks down McCain’s plan and the ridiculousness of his numbers, which is worth a read if you like math.

Basically, the Congressional Budget Office currently estimates that in 2013, we will have a deficit of $443 billion assuming the Bush tax cuts are extended (which McCain has come out in favor of doing). Now, McCain has already proposed a number of additional policy measures that would increase the deficit even more. It’s estimated that his tax plan would cost an additional $195 billion a year. He’s also in favor of capping the Alternative Minimum Tax, increasing the size of the army, procuring advanced weapons systems to protect the country, and the Lexington Project – aimed at breaking our dependence on foreign oil.

None of the above comes free and hilzoy conservatively estimates that if McCain implements the above policies, he would have to cut a staggering $695 billion a year from the budget, or two-thirds of all discretionary spending by the US Government. It seems like quite the feat. How does McCain plan on doing it?

According to Politico:

“curbing wasteful spending and overhauling entitlement programs, including Social Security.”

Oh, ok. Count me in the camp that believes the federal government is inefficient and wastes money, but cutting it by two-thirds seems a little insane. There is also this sweet little idea:

“The McCain administration would reserve all savings from victory in the Iraq and Afghanistan operations in the fight against Islamic extremists for reducing the deficit. Since all their costs were financed with deficit spending, all their savings must go to deficit reduction.”

I’m not sure how McCain plans to reconcile “victory in Iraq and Afghanistan ” with “we’ll stay in the Middle East as long as is necessary” but color me interested. I really like the idea that magical ponies could be involved in the solution.