Capital Gains & Games

8 House GOP Freshman Want Credit For Getting A Cash Advance On Their Master Card To Make A Payment On Their Visa

This should eliminate all doubts about how little some members of Congress understand about federal finances.

As Dana Milbank explains in his column from today's The Washington Post, eight House Republican freshman made a grandstanding play this week to get public attention and credit for something that makes no financial sense whatsoever.

First, the eight representatives didn't spend all of the amount they got in 2011 from the House of Representatives to pay for staff and other expenses in their Washington and district offices. They correctly claimed that they saved taxpayers money by doing so.

But second, the representatives then said that they wanted to return the unspent money to the Treasury and designate that the funds be used to reduce the national deb. They clearly felt that they should get big props for doing this.

This is wrong on so many levels that it's hard to know where to start.

The Treasury doesn't give each member a wad of cash to spend; it only pays actual expenses after they're incurred. Fewer expenses mean no spending; no spending means no federal borrowing.

In other words, the deficit and federal borrowing were already lower than they would otherwise have been just because the members of Congress didn't spend all that they were allowed. There is no unspent cash to be returned to the Treasury and there's nothing to designate for debt reduction.

The only way the eight first-term Republican House members could have done what they said they wanted to do was first to have gotten the Treasury to borrow more so that they could then use the borrowed funds to borrow less.

And it gets more ridiculous. The Treasury would have had to borrow the funds and pay them to the members of Congress personally (I'm pretty sure that's against the law, but never mind). The members then would have had to return the funds they were not allowed to have back to the Treasury and ask that they be used to lower the debt.

In other words, the members of Congress who were trying to play the role of budget super heroes were really nothing more than financial illiterates. They were doing the Washington equivalent of being proud of paying down a balance on one credit card by getting a cash advance on another...and increasing that car's balance in the process.

If you're shaking your head at the stupidity of this situation...congratulations: You understand it better than at least eight members of the U.S. House of Representatives.

For the record, the eight anything-but-financial-geniuses are Jeff Landry (R-LA), Tim Huelskamp (R-KS), Joe Walsh (R-IL), Jeff Duncan (R-SC), Kevin Yoder (R-KS), Raul Labrador (R-ID), Steve Southerland (R-FL), ad Mick Mulvaney (R-SC).

I doubt they're embarrassed, but they really should be.

Dollar Coin Supporters Trying To Sell Us The Brooklyn Bridge

For some reason the dollar coin keeps coming up.

A press release in my inbox yesterday announced that Senators Tom Harkin (D-IA) and John McCain (R-AZ) had introduced the "Currency Optimization, Innovation and National Savings (COINS) Act" that would create yet another dollar coin. This is the Senate version of a bill introduced in the House last year.

As I've posted several times before (here, here, and here) I know from very very personal experience with the Golden Dollar in 2000 that, as far as the budget is concerned, a dollar coin is a good idea for the federal government.

I also know, however, it's been impossible to eliminate the bill so that the dollar coins that have been created have been a supplement to rather than a substitute for the greenback. That completely changes the transaction: Instead of producing savings, the dollar coins that have been minted have ended up costing taxpayers more rather than less. The real beneficiaries have been the suppliers of the raw materials for the coins and the armored carriers that delivered them to banks and retailers.

Think of it this way. Suppose there was a old bridge that cost the government a great deal to maintain every year and someone determined that replacing the bridge with one that was more efficient made a great deal of budget sense. It clearly was going to cost more in the first few years to build the new bridge than to maintain the old one, but the new one was going to save money over the next three decades compared to what it would cost to keep the old one in place.

But there's a problem: Drivers like the old bridge and aren't going to use the new one because it's located 3 miles further down the road. They also don't like the design of the new bridge and have trouble getting there because the access points are difficult to maneuver.

As a result, traffic on the old bridge only decreases slightly and the government still has to pay to maintain it while it also pays for the new bridge. The result is more rather than less spending. That makes the new bridge a good deal for the companies and workers that build it and the steel and concrete manufacturers that provide the raw materials. But it's a terrible deal for taxpayers.

I'm sure you see where this is going. The savings can be guaranteed if the old bridge is torn down. That, in fact, is what the newly introduced COINS act would do: it would mandate that the dollar bill be eliminated.

But that doesn't take into account the politics of the situation. The bill is very popular (some consumers feel incredible loyalty to it and think of using a coin as the equivalent of cheating on a spouse), and retailers don't like them because they are more expensive to have delivered than bills.

Vending machine owners whose machines don't already accept dollar coins don't like them because it costs a good deal of money to make the conversion (It was $50 per machine in 2000; that's undoubtedly $75 or more now).

Banks don't like new dollar coins because they still have large inventories of Susan B. Anthony dollars -- maybe the most unpopular coin is U.S. history -- and can't get get consumers to take them.

And lets not forget the companies that manufacture the paper and ink for the bills that want to keep selling that to the government.

So the likelihood that the dollar bill will be phased out is small to nonexistent. That means that the transition to a dollar coin in the U.S. will not produce the budget savings its supporters claim.

It also means that the supporters are just trying to sell us a bridge.

The Real Story About The Obama Pentagon Changes

Here are two easy-and-quick-to-read pieces on the magnitude of the military spending changes Secretary of Defense Leon Panetta actually announced last week. The simple answer according to two people who know is that the reductions are less than the headlines indicated.

First, over at the Will and the Wallet, CG&G alum Gordon Adams did this very nice post about how what Panetta announced is "promising" in the sense that it shows there is finally the start of a meaningful shift in DOD strategy that could lead to significant savings. But Gordon says the proposal is also "dangerous" because the plans leaves "the long term budget trajectory...unrealistically high" and will leave Pentagon planners with the notion that they'll have more to spend in the future than will be the case.

Over at his own blog GoozNews, Merrill Goozner did this excellent post that talks about the numbers and the politics of the military budget changes Panetta announced. His conclusion: there's much less in what was announced than the White House wants you to believe.

Stan To Budget Committee Chairman Paul Ryan: Changing The Budget Process Will Do Nothing

House Budget Committee Chairman Paul Ryan (R-WI) apparently thinks the root cause of all our budget problems is changing the budget process. My column from today's Roll Call explains why, even though changes are needed, what he's proposing and when he's proposing it is an attempt to do something without actually doing anything.

Change the Budget Process? Give Us All a Break

You would think that the deficit and national debt that many in Congress keep telling us are way too big would prompt a serious discussion about what should be done that has at least some prospect of actually succeeding.

But what instead is being proposed as salvation from our devil-sent combination of fiscal afflictions and budget transgressions? Apparently, all we have to do to be delivered is to change the Congressional budget process.

And for some reason, putting the country on the path to economic good health and righteousness once again includes the perennially proposed change from a one- to a two-year federal budget, even though that has never been proved to have any value whatsoever and could actually make things much worse.

That’s not to say this is unexpected. Blaming the process is a mainstay of the budget debate in Washington, D.C. Congress typically proposes to do something about the budget process when it can’t or won’t do anything about spending and revenues. This has been observed so often over the years that it’s now a basic fact of life among budget insiders.

So it’s not at all surprising that, given Congress’ continuing inability to agree on the deficit reduction proposal so many say is needed, House Budget Chairman Paul Ryan (R-Wis.) last week pushed his committee to approve legislation that would change the budget process.

It was, however, very disappointing.

It was also just the latest sign that there’s going to be little progress on the federal budget this year.

I’m hardly the first person to insist that changing the budget process is just a cover for not dealing with the real issues. Although it’s repeated often, it’s been more than a quarter-century since Congressional Budget Office Director Rudolph Penner provided one of the most famous quotes in federal budget history when he said that the budget process is not the problem; the problem is the problem. Penner also told a House Rules subcommittee reviewing the budget process in 1984: “A process, no matter how well designed, cannot make difficult problems easy.”

The truth is that even if there was no process change at all, let alone the changes Ryan thinks are needed, Congress already has all the power and procedures it needs to deal with the budget. In fact, the process barely matters.

As we’ve learned repeatedly from the debates of the past few decades when the House, Senate and White House didn’t implement some part of the supposedly required budget procedures, no rules force Members of Congress or the president to cut spending or increase revenues if they don’t want to do so.

That’s why having joint instead of concurrent budget resolutions, requiring that the CBO provide dynamic scoring cost estimates for proposals, and changing the way baselines are calculated, all of which are required by the legislation approved by the House Budget Committee last week, won’t make a dime’s (let alone a trillion dollars’) worth of difference.

But another proposed change that Ryan and others are pushing — biennial budgeting — is the biggest fraud of all.

Voting on a budget every two years instead of annually just means that Members of Congress only have to go on record every other year on the overall deficit and debt. That means less, rather than more, accountability. It also means less transparency and responsibility if the ultimate result is that votes on the budget can be avoided more often before the next election.

Biennial budgeting also makes little sense because of how unlikely it is that a two-year budget will be based on an accurate assessment of the economy over the period it will be in place. With a biennial budget, White House economic forecasts and cost estimates would be completed 10 months before the first of the two fiscal years covered in the budget and almost two full years before the second. Other than pure luck, there’s no way any of the forecasts, projections and estimates in the second year would be close to correct.

Biennial budget supporters say that two-year budgets and appropriations could always be revised. But there’s no point of doing two-year budgets and spending bills if annual (or more frequent) updates are going to be needed anyway. That’s budgeting by supplemental appropriation and is a terrible idea.

The long-held view that two-year budgeting will allow Congress to do more oversight of existing programs is nonsense. Few of the authorization committees that do oversight currently have budget-related responsibilities that prevent them from reviewing the agencies and departments within their jurisdiction.

They just don’t do it. The budget process is not what’s stopping the committees now; a two-year process won’t make it more likely that they will do more (or any) in the future.

Using budget process changes to implement an actual agreement on spending and revenues would make a great deal of sense. In fact, the budget process revisions of the past have only been successful when they implemented that type of political consensus.

But without that consensus, saying that changing the budget process will solve our fiscal woes is the federal budget equivalent of telling an alcoholic that all he or she has to do to deal with the disease is take a different route home so they don’t walk past the bar every day.

Why Former OMB Directors Like Mitch Daniels Don't Make Good Presidential Candidates

It was just two weeks ago that I explained why OMB directors in general are seen as good White House chiefs of staff by the presidents they serve.

In a very strong piece in today's The Washington Post, Ezra Klein explained why one particular former OMB Director -- Indiana Governor Mitch Daniels -- was never going to be the strong presidential candidate some were saying he would be and is not the savior some in the GOP are looking for.

Ezra's analysis about Daniels can easily be broadened to OMB directors in general: With very rare exceptions they're just not right for today's presidential politics. The top five reasons are:

1.  A Very Bad Track Record.  OMB directors almost certainly have to take responsibility for a budget situation that got worse...and in many cases much worse...while they were in the job. It may not have been their fault, but it happened on their watch.

Jack Lew, who just left OMB to become Obama's chief of staff, is the only OMB director since Robert Mayo in 1969 who can say that the budget was balanced while he headed the agency. It's hard to be convincing that you'll fix what for many voters is THE hot-button issue when you can be tagged with failing miserably at it the first time.

2. No Friends. Face it: OMB directors have to say "no" to most of the people they deal with. That's not a great way to get people to support your candidacy.

3. You're A Geek. As someone who falls into this category, please understand that I say this with the utmost respect: More often than not OMB directors are or become policy nerds who get in the weeds of most decisions. As I said two weeks ago, OMB directors are familiar with the full scope and breadth of everything the federal government does and that would seem to make them ideal candidates for president. But they generally focus more on the micro than the macro. That makes them great staffers to presidents rather than the presidents themselves.

4.Not Great Communicators. You can count on one hand (and maybe just one or two fingers) the OMB directors who have had the ability to connect with mass audiences.

5. Not Known Beyond The Beltway. OK...this is a little strong: Some OMB directors have not been Washington insiders (Anyone else remember Bert Lance?). But even the few that were known outside the beltway were not household names when they got the job and then had to focus their attention and energies on a vary narrow group inside.

Even the former members of Congress who moved to OMB like Leon Panetta (D-CA), Jim Nussle (R-OHIA), Rob Portman (R-OH) and David Stockman (R-MI) didn't have much of a national constituency when they took the job and even less of one when they left.

Speed Cameras Are Good For Lower Taxes

My Beautiful and Talented Wife (The BTW) and I have both been caught by speed cameras -- several times for each of us -- in recent years. So before you start screaming that I would feel differently if it had happened to me, please keep in mind that it has and my opinion is still the same.

This is all prompted by this story in The Washington Post about local celebrity chef Geoff Tracy being unhappy about being caught speeding three times by the cameras in his neighborhood. Note that Chef Geoff doesn't say that he wasn't speeding, only that he didn't like being caught and having to pay the fine.

I don't like paying fines either, but I do like it when a government does something efficiently and that's what speed cameras are: a highly efficient way to enforce existing law.

A local government could accomplish the same thing by having a police officer at the same location 24/7, but it would be far more expensive to do it that way. Using technology -- a speed camera in this case -- allows the local government to provide the same level of law enforcement at a lower cost. From a budget perspective, that's something we should be doing as often as possible.

The usual complaint is that speed cameras are just a way for a government to increase revenues by imposing more fines. That ignores the fact that, if the cameras are operating properly, the fines are only imposed on those who are actually breaking the law.

The cameras would make no sense and would be costing a government money if there were no speeders. As Chef Geoff admitted, the cameras have gotten him to drive at or below the speed limit so he's no longer getting tickets.

You want the speed laws changed so you can drive faster? Go tell the city council and get them to enact an amendment.

But don't demand that taxes be lowered if you're not going to allow the government that's imposing the tax from being as efficient as possible.

(Chef Geoff says he's going to hire someone to stand on the corner with a sign warning drivers about the sign. That's the equivalent of voluntary taxation and I'm sure something the local government appreciates.)

Rosenthal Cartoon

Legalize And Tax Marijuana?

It was several years ago during the Q&A portion of a presentation I was giving about the federal  deficit in a VERY socially and fiscally conservative suburb of Detroit that I was asked a simple and very sincere question: Why doesn't the federal government legalize heroin and crack and then tax the sales?

I was stunned both by the question and by the people who were asking it. They were asking about the mechanics of how it would work, how much revenue legalization would bring in, etc. They were specifically asking about heroin and crack.

And they were completely serious.

Which is why this story by Anita Kumar from yesterday's The Washington Post about a Virginia delegate introducing a bill to figure out how much revenue the state would bring in if it legalized marijuana wasn't as shocking to me as it otherwise might have been.

On the one hand, this is the Commonwealth of Virginia where where the sales of bottled booze are still only available in government-owned stores and religious leaders in the southern and western parts of the state likely would prefer that prohibition return.

On the other hand, this is Virginia which, like most other states, has budget issues and is looking for alternative sources of revenue.

But from a budget perspective (please put aside your religious or moral arguments for a moment), legalizing and taxing actually makes sense because:

1. It would be a potentially significant source of revenue.
2. It would...or should...reduce the cost of law enforcement.
3. It would reduce the amount of time the courts would have to devote to drug-related cases.
4. It would reduce the number of people in jail for drug-related convictions.

And...and I suspect this was one of the primary reasons the folks in the Detroit suburb who were asking about it...the tax would only be paid by those buying the drugs. As with any sales tax, you could avoid it if you didn't buy whatever was being sold. That would mean that more revenues would be collected, the deficit would be reduced or spending wouldn't have to be cut, and someone else would be paying for it.

I'm not suggesting that this is going to happen any time soon or perhaps even at all. After all, as the article explains, the proposal just to study the concept isn't likely to come up for a vote let alone be approved in Virginia.

But if the idea can be discussed openly in socially conservative suburbs in the Midwest and a state like Virginia...

Gabby Giffords: "I will recover. I will return."

If this clip from earlier today in the House floor when Rep. Gabrielle Gifford (D-AZ) resigned doesn't make you at least a little teary, you have no soul.

Deficit Barely A Footnote In SOTU

Last night' State of the Union Address almost certainly made deficit hawks very unhappy, extremely angry and, from a policy perspective, close to suicidal. After pushing hard for so long to make the deficit the issue, it was barely a footnote in the president's hour-plus address and wasn't missed that much.

It took less than an hour for the Committee for a Responsible Budget to send out a statement excoriating the White House for missing "...an opportunity to throw down the gauntlet to Congress on the debt and demand a large, bipartisan debt reduction plan this year."

If the speech is an indication, the administration has no interest in throwing gauntlets or anything else on the budget this year.

I was surprised. With Congress unwilling or unable to do much of anything on the budget, I had expected the White House to call for the House and Senate to deal with the budget and to offer to meet anytime, any place, etc. At the very least this would have put it in a good position to be critical when that didn't happen.

But the SOTU turned out to be even more of a campaign speech than I had expected (If you have any doubt about that just listen with your eyes closed to the over-the-top soaring rhetoric at the end and ask yourself if it doesn't sound like the president was accepting his party's nomination.) and campaign speeches don't promise to impose pain (Ask Walter Mondale). That meant that the budget, deficit, and national debt were out and proposals that make you feel good about the future were in.

The subtext was clear: The president was saying to congressional Republicans that this year he'll be happy to let them propose the spending cuts that will cause the political pain. They can appeal to the tea party wing of the GOP; he'll take everyone else.

The speech confirmed what anyone but the most wishful thinkers who follow the budget already knew: barring a crisis, there is next-to-no chance there will be any legislated change in the fiscal policy outlook before the election. The deficit will fall by several hundred billion dollars from fiscal 2011 to 2012 because of what's already on the books and because the economy is likely to continue on its current path.

Anything beyond that will have to wait until a lame duck session of Congress at the earliest. The next session of Congress in 2013 is probably more likely.

Live-Blogging The SOTU

851 pm: 

OK, let's get this show on the road. I'll be commenting on a variety of aspects of the speech but...wait for it...anything having to do with the budget, spending, taxes, deficits, and the debt. I know, that's a shock.

859 pm:

Just read an embargoed copy of the speech. No details per the embargo but I'm definitely looking forward to comparing how it sounds to how its how it reads.

909 pm:

A wonderful moment with Gabby Gifford. No doubt that will be the picture seens everywhere tomorrow.

910 pm:

Hard to argue with the majesty of the House chamber. No wonder the minority response isn't ever as well received.

914 pm:

Let it be noted that "An economy built to last" was said for the first time 4 minutes into the speech. Sounds like the tag line to an auto commercial.

916 pm:

The word wasn't used by "equality" just entered the conversation.

917 pm:

The president sounds angry and not professorial. That will play well with an electorate that sees the economy as an emotional issue.

920 pm:

"An economy built to last" for the second time.

925 pm:

Did anyone else notice that the business tax cuts the president just proposed would be paid for with revenues from other businesses?

935 pm:

This increasingly sounds like a campaign speech directed to Democrats and independents. Twenty-five minutes in and no mention of the budget.

938 pm:

First use of the word "budget."

946 pm:

First reference to paying down the national debt.

953 pm:

Paying down the debt gets mentioned almost in passing as the president speeds to extending the payroll tax cut.

954 pm:

40 minutes in and the president is just turning to the deficit. But it's in the context of having to do away with tax breaks for the wealthy.

956 pm:

First mention of Social Security and Medicare.

957 pm:

It's not hard to conclude at this point that the budget was not a major or even minor focus of the speech. The president is providing little to no indication about anything having to do with reducing the deficit.

958 pm:

Third time -- an America built to last.

1016 pm:

And it's over. The budget debate didn't move forward by an inch with this speech. No hints about what's planned for the deficit. A non-event as far as fiscal policy is concerned. This was a campaign speech with lots of positives and optimism and almost nothing about the costs.

Bloomberg Radio @ 4 pm Today

I'll be on the "Taking Stock" program with hosts Pimm Fox and Courtney Donohoe on Bloomberg Radio today between 4 and 430 pm EST talking about the budget and the State of the Union. You can listen here.

New For CG&G: Live Blogging The SOTU Address Tonight

Just a quick note...Given that the State of the Union Address is the start of the release of the president's budget, I'm going to live-blog it tonight and comment on the budget aspects of the speech as they're revealed for all to hear.

Starting Tonight: 3 Good Weeks Ahead For Obama On The Budget

There are only a handful of times when my day job as a partner in a communications agency and being a federal budget guru come together. As my column from today's Roll Call shows, this is one of them.

Three Good Weeks Ahead for White House on Budget

By Stan Collender
Roll Call Contributing Writer
Jan. 24, 2012, Midnight

This year’s almost three-week period between tonight when President Barack Obama delivers the State of the Union address and Feb. 13 when the president’s fiscal 2013 budget is expected to be released will give the White House an enormous advantage in getting positive media coverage for what it proposes. It will also put Congressional Republicans on the defensive right from the start of this session of Congress.

The typical one-week interval that usually occurs between the SOTU and the release of the president’s proposal almost always provides the White House with an extraordinary opportunity to get out its budget messages and set the tone for what is ahead.

With its large national television audience and blanket coverage, the address typically dominates the news for 24 to 48 hours.

It also generally is the start of a series of formal and informal communications by the White House about what the president is going to propose that culminates in the submission of the budget the following Monday.

Depending on the day of the week when the SOTU occurs, the White House usually has five to seven days when, with a combination of carefully choreographed announcements and leaks, the positive aspects of its budget dominate the headlines.

But the Florida Republican presidential primary on Jan. 31, a week after the address is delivered and two weeks before the Obama fiscal 2013 budget is sent to Congress, may mean that this year’s three weeks between the SOTU and the submission of the budget more than triples the White House’s usual advantage.

Whatever happens in Florida definitely will pull column inches, airtime and pixels away from the administration’s announcements and leaks about what the Obama budget will include.

But it will also eliminate the ability of Congressional Republicans — the ones whose reactions to what the White House says will be most newsworthy — to get much attention.

The White House will have yet another advantage because the Florida primary will be old news by the time the talk shows air the following two Sundays.

There’s no doubt the results will still be a hot topic. But the days that elapse between the primary and the following Sundays will make it hard for these shows and the rest of the weekend coverage to focus just on that story. That will leave a big opening for the impending news of the fiscal 2013 budget that the administration will be releasing.

This especially will be the case if the White House makes senior officials available to the shows to talk about its budget. A full-court press from the administration that includes the Treasury secretary, the Office of Management and Budget director, the chairman of the Council of Economic Advisers and perhaps even the vice president will make it much more likely that the administration’s message will get prominent attention and overwhelm any responses.

Just-named White House Chief of Staff Jack Lew, who as OMB director was responsible for putting the fiscal 2013 proposal together, will be especially hard for talk-show producers to ignore.

The administration already has a series of events on the schedule that indicate it’s indeed planning to take advantage of this three-week period.

Immediately following the State of the Union, the president will go on a three-day barnstorming trip to five politically important states. He and his budget are likely to dominate the news in each one as a result.

In the middle of this trip, Secretary of Defense Leon Panetta will be holding an event in Washington, D.C., at which the Pentagon will reveal some of the details of the overall changes in Department of Defense spending priorities that the president and he announced several weeks ago. That will be big news in national outlets.

If the typical pattern is followed, there will also be planned leaks and selective releases of the parts of the budget that the White House thinks will be received the most positively.

Congressional Republicans will be hard-pressed to compete for attention with the staged White House events and will continue to have to fight hard to score budget points during this whole period.

For example, last week’s almost-certain-to-have-no-effect House vote to disapprove the administration-requested $1.2 trillion increase in the federal debt ceiling not only got little serious attention, but the coverage it did get was more derisive than positive.

The same will be true over the next three weeks. The combination of the White House’s extreme advantages, the primary pulling focus away from the Congressional GOP and the fact that at this point in the year House and Senate Republicans don’t have their own budget alternatives point to a very strong start for the administration.

Rhetorically at least, it will allow the Obama 2013 budget to be better received than most analysts so far have said is possible.

No Longer A Rumor: Obama 2013 Budget To Be Delayed

The Congressional Budget Act requires the president's budget to be sent to Congress by the first Monday in February. This year that's February 6.

As of Friday night that was still the date. But something may have changed over the weekend because there's what I'll call a strong rumor that the White House is on the verge of delaying the release. No word on for how long or why.

I'm guessing it will be no more than a week or so. More as soon as there's more.

UPDATE: The one-week delay until February 13 has now been announced.

Would A President Romney Increase The U.S. Deficit And Debt?

Interesting column in yesterday's The New York Times by Jesse Eisinger of ProPublica about the budget strategy the U.S. might be following if it were a private equity firm, that is, if it were run as if it were Bain Capital, Mitt Romney's former employer.

Eisinger's conclusion: Given the current incredibly low interest rates, the management of a private equity firm would be rushing to borrow more to finance its activities rather than to be repeatedly demanding that it deleverage and do less.

In other words, running the U.S. as a business as Romney says if elected he could/would/will do, would actually get him to do the opposite of what he and others running for president and Congress are insisting needs to be done: They would be increasing the deficit and borrowing more rather than reducing it and shrinking federal activities.

This is hardly the first time someone has suggested that a very low interest rate environment means that the federal government should be borrowing more rather than less. But given the hyper rhetorical Dark Ages state of the current budget debate in Washington when facts and substance take a back seat to pseudo religious economic and finance beliefs, it's the first time in a while that it's been talked about prominently in a mainstream publication.

Why isn't this point getting more (or any) traction?

1. Today's federal budget debate is almost a purely emotional rather than a rational discussion and anyone who suggests more rather than less government debt gets the modern-day equivalent of stoning and excommunication. That makes Eisinger's quantitative explanation of the excellent return taxpayers would get today from more borrowing largely irrelevant even if it's absolutely true.

2. Because of the emotions and political implications, no one in a position to champion the argument is willing or able to do so. This includes Romney, a former senior executive from one of the world's top private equity firms who should (and almost certainly does) know better.

3. The borrow-more-now strategy is appropriate if it's used to do the federal government's equivalent of investing by being spent on things that will provide a future return such as infrastructure, education, and some R&D. But it's hardly clear that, if it borrowed more, the additional amount would be used like that. Indeed, given today's politics there's every reason to believe that the additional borrowed funds would be used for operating expenses, projects that provide immediate gratification, and for investments that will never provide much of a return rather than for capital expenses that provide an actual long-term economic benefit.