5. Justice Oliver Wendell Holmes, Jr., attributed in Felix Frankfurter, Mr. Justice Holmes and the Supreme Court (Cambridge: Harvard University Press, 1961), p. 71.
6. Center for Responsive Politics, “Congressional Members’ Personal Wealth Expands Despite Sour Economy,” November 2010.
7. All the calculations that follow are based on the Congressional Budget Office report “The Budget and Economic Outlook: Fiscal Years 2011 to 2021,” January 2011. I do not report the CBO estimates exactly, but rather adjust them according to specific alternative assumptions that I believe form a more accurate baseline. For example, the CBO baseline for 2015 assumes a budget deficit of 3 percent of GDP (Tables 1–4). The CBO baseline assumes that the Bush tax cuts, currently in effect until 2012, are allowed to lapse after 2012. I instead assume for purposes of my baseline that they are continued after 2012. This adds around 2 percentage points of GDP to the CBO baseline deficit. The CBO baseline also assumes that civilian discretionary spending keeps up with inflation but not with GDP growth, causing discretionary civilian spending in 2015 to fall to 3.5 percent of GDP. I instead start with a baseline of discretionary civilian spending of 4 percent of GDP. I also assume that debt servicing in 2015 is 3 percent of GDP, while the CBO assumes 2.5 percent of GDP. The overall effect is a baseline of 6 percent of GDP, rather than the CBO’s 3 percent of GDP.
8. See Tables 1.2 and 8.4 of the Office of Management and Budget Historical Tables.
9. “In FY 2010, Congress approved more than 9,000 earmarks costing taxpayers close to $16 billion.” See U.S. Government Executive Office, “The National Commission on Fiscal Responsibility and Reform: The Moment of Truth,” December 2010, p. 27.
10. See Table 3.2 of the Office of Management and Budget Historical Tables.
11. There is a pervasive belief that foreign aid eats up an enormous share of the budget, so that if we would simply stop our foreign assistance to foreign tyrants, we’d close much of the gap. The confusion about foreign aid is breathtaking. In a November 2010 opinion survey, Americans were asked their “hunch” about the percentage of the federal budget that goes to foreign aid. The median answer was 25 percent. The respondents were then asked what would be an “appropriate” percentage. The median response was 10 percent. The correct answer in fact is that foreign aid accounts for 0.8 percent of the budget (and 0.2 percent of GDP). The public is off by a factor of thirty times. While it demands a “cut” in foreign aid, its target of 10 percent of the budget would actually require an increase in aid of twelve times! (World Public Opinion, “American Public Opinion on Foreign Aid,” November 30, 2010.)
12. The “Medicaid and Related” category comprises the following: Medicaid, Refundable Premium Assistance Tax Credit, Reinsurance and Risk Adjustment Program Payments, and Payments to Reduce Cost Sharing in Qualified Health Plans. The “Other” category comprises the following: Other Health, Children’s Health Insurance, Family and Other Support Assistance, Earned Income Tax Credit, Child Tax Credit, Making Work Pay Tax Credit, Payment to States for Foster Care, Housing Assistance, and Other. (Office of Management and Budget Historical Table 8.5.)
13. Neil King, Jr., and Scott Greenberg, “Poll Shows Budget-Cuts Dilemma,” Wall Street Journal, March 3, 2011.
14. Means-tested spending is aid that is provided to individuals who meet certain low income qualifications.
15. The FY 2011 budget estimate for TANF programs was approximately $17.4 billion. The total outlays for Means Tested programs in FY 2011 was approximately $498 billion (OMB Budget Table 8.2), and the U.S. GDP is projected to be $15.1 trillion. (U.S. Department of Health and Human Services, “Temporary Assistance for Needy Families: FY 2012 Budget,” p. 305.)
16. See Office of Management and Budget Historical Budget Table 11.3 for the category “Family Support Payments to States and TANF,” divided by GDP in Historical Table 1.2.
17. See Office of Management and Budget Historical Table 8.7.
18. U.S. Government Executive Office, “The National Commission on Fiscal Responsibility and Reform: The Moment of Truth,” December 2010.
19. Angus Maddison, The World Economy: A Millennial Perspective/Historic Statistics (Paris: Development Centre of the Organization for Economic Cooperation and Development, 2006), p. 264.
20. Calculated using total federal receipts from Office of Management and Budget Historical Table 1.2 and total tax collection per OECD statistical database.
21. New Hampshire collects taxes on dividends and interest income only.
22. Charles M. Tiebout, “A Pure Theory of Local Expenditures,” Journal of Political Economy 64, no. 5 (October 1956), pp. 416–24.
23. Pew Research Center for the People & the Press, “Trends in Political Values and Core Attitudes: 1987–2009,” May 21, 2009, p. 131.
24. See Office of Management and Budget Historical Table 12.1.
25. Data for calculations from Thomas Piketty and Emmanuel Saez, “How Progressive Is the US Federal Tax System? A Historical and International Perspective,” Journal of Economic Perspectives 21, no. 1 (Winter 2007), pp. 3–24; Congressional Budget Office, “Average Federal Taxes by Income Group,” June 2010.
26. See Office of Management and Budget, “A New Era of Responsibility,” February 2009, p. 9, and Edward N. Wolff, “Recent Trends in Household Wealth in the United States: Rising Debt and the Middle-Class Squeeze—an Update to 2007,” Levy Economics Institute of Bard College, March 2010.
27. Federal Reserve Statistical Release, “Flow of Funds Account of the United States: Flows and Outstandings Fourth Quarter 2010,” March 10, 2011.
28. Internal Revenue Service, “Reducing the Federal Tax Gap: A Report on Improving Voluntary Compliance,” August 2007.
29. American Petroleum Institute, “Motor Fuel Taxes.”
30. The New York State Department of Taxation and Finance, “Stock Transfer ax.”
31. Gerald Prante and Mark Robyn, “Fiscal Fact: Summary of Latest Federal Income Tax Data,” Tax Foundation, October 6, 2010.
Chapter 12: The Seven Habits of Highly Effective Government
1. John Paul Stevens, Opinion of Stevens, J. Supreme Court of the United States. Citizens United Appellant vs. Federal Election Commission, January 2010.
2. John F. Kennedy, Remarks of President John F. Kennedy at American University Commencement, June 1963.
3. John F. Kennedy, Address at Rice University on the Nation’s Space Effort, September 12, 1962.
4. Jennifer Manning, “Membership of the 111th Congress: A Profile,” Congressional Research Service, November 2010.
5. Partnership for Public Service, “Ready to Govern: Improving the Presidential Transition,” January 2010, p. iii.
6. National Park Service Organic Act.
7. At previous junctures of American history, third-party movements were able to intrude upon established parties to shift national politics in a fundamental way. The Republican Party arose in the 1850s to defeat the Whigs and lead the nation through the Civil War and the end of slavery. The Populist Party arose in the 1880s to demand significant reforms to public administration, the direct election of senators, women’s suffrage, and the control of giant industrial trusts. The Populist platform, though never dominant electorally, led the way to the Progressive Era, including the reformist presidencies of Theodore Roosevelt and Woodrow Wilson.
Chapter 13: The Millennial Renewal
1. Alexis de Tocqueville, The Old Regime and the French Revolution, trans. John Bonner (New York: Harper & Brothers, 1856), p. 124.
2. Henry Ashby Turner, Jr., Hitler’s Thirty Days to Power: January 1933 (London: Bloomsbury, 1996).
3. Pew Research Center for the People & the Press, “Millennials: Confident, Connected, Open to Change,” February 24, 2010.
4. U.S. Census Bureau, “Population by Age and Race 2009.”
5. Johan Rockström, “A Safe Operating Space for Humanity,” Nature 461 (September 2009), pp. 472–75.
6. See Jeffrey D. Sachs, Common Wealth:
Economics for a Crowded Planet (New York: Penguin, 2008), Chapter 5.
7. For 2011 Gross World Product data, see International Monetary Fund, “World Economic Outlook Database: April 2011.”
8. Donald Pfaff, The Neuroscience of Fair Play: Why We (Usually) Follow the Golden Rule (New York: Dana Press, 2007). In one of the most fascinating areas of recent scientific advance, neurobiologists have begun to unravel the basic neural and chemical pathways of conflict and cooperation. The Golden Rule and nurturing behavior more generally, speculates neuroscientist Donald Pfaff, emerged from a mother’s behavior toward her offspring, involving the hormones estrogen, cortisol, prolactin, and oxytocin. On the other hand, aggression seems to be related mostly to male behavior rooted in protecting the offspring and defending territory. These behaviors are mediated by hormonal and brain systems that involve testosterone, vasopressin, and serotonin, among other regulators.
9. See Foreword, Jeffrey D. Sachs, Common Wealth: Economics for a Crowded Planet, p. xii.
10. John F. Kennedy, Remarks of President John F. Kennedy at American University Commencement, June 1963.
11. Ibid.
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