October 11, 2007
POLITICS: Check Your Facts At The Door
FactCheck.org is, as such groups go, one of the less obviously dishonest "watchdog" groups, but their knocks on Rudy Giuliani from the latest debate include some howlers. First, they attack Rudy for saying that Hillary proposed giving $5,000 to every baby born in the country when
Clinton told the Congressional Black Caucus on Sept. 28, "I like the idea of giving every baby born in America a $5,000 account that will grow over time, so that when that young person turns 18 if they have finished high school they will be able to access it to go to college or maybe they will be able to make that down payment on their first home." A campaign spokesman told The Associated Press that Clinton’s comment was not a policy proposal "but an idea under consideration."
Note: this was an idea nobody else, to my knowledge, had proposed or asked her about; Hillary made this statement unprompted out of her own mouth, and did so clearly after giving it some thought. Simply because she backed away when the trial balloon attracted harsh criticism doesn't immunize her from having floated it in the first place.
Then, they call Rudy a liar for saying of Hillary's 401(k) giveaway proposal, "this one costs $5 billion more than the last one." On what basis?
Giuliani also exaggerated when he said Clinton's new proposal would cost $5 billion more than the $5,000-per-baby idea. She estimates that the new retirement plan proposal would cost about $20 billion to $25 billion each year, an amount she would finance by freezing the estate tax at its 2009 level. According to the Centers for Disease Control and Prevention, there were 4,289,000 live births in the U.S. during the 12 months ending in February, the most recent year on record. The cost of giving each of those kids a $5,000 bond is $21.4 billion, which is actually more than the low end of Clinton's estimate for her new plan.
In other words, Rudy's a liar because he does not bow before the towering integrity of Hillary Clinton's self-serving estimates of the costs of her own proposals? Paul Krugman would be proud. I file these under Crank's First Law of Government Financial Forecasts: they are always, always wrong. (Also, even if her numbers are right, the high-end $25 billion estimate is nearly $4 billion larger than $21.4 billion, so we're not talking a large discrepancy here with what Rudy said).
FactCheck also takes Rudy to task for saying that Hillary called the free market "destructive" when the words she really used (in a quote) were "the most radically disruptive force in American life in the last generation".
Re: Crank's first Law of Goverment Financial Forecasts.
So the war in Iraq will cost more than $15 billion?
Or less. But probably more. Never bet on those kind of numbers being accurate.
As someone who estimates large projects for a living, Crank is right that they always cost more than less. Why is that? Because unless you are estimating something you have done many times before, your ability to estimate accurately is almost nil.
For example, if you are painting a house for the first time, estimating the prep time, cost of materials, etc is at best a WAG. However if you keep track of the time and $s, the next time you do it your estimate will be much better. By the 3rd time, you are pretty close. In most cases it is the "unknown unknown" that gets you. You don't have the ability to even guess what could happen since you lack experience in doing that specific (or closely related) activity.
As a rule of thumb, when estimating something you have done before, the cost/time will be at least 2 or 3 times more than your most conservative estimate.
Now in the case of estimating the cost of government programs a key issue that is not taken into account is the poor efficiency of the government (federal, state, and local). The % of $ that actually get to the recipients is less than 50%. Even “simple” programs as “send everyone in the US a check for $1K” are not that easy. How many people qualify, how do you insure they are qualified, and how do we make sure the money gets to them? All of these issues make the program gobble up $s that was intended for the recipients.
That is one of the reasons why us conservatives are against the government being the distributor (or redistributors) of $s. Better to never collect the taxes than collect it, waste half of it, and then give to the unintended people.
Factcheck? Meh. Yet another political org posing as a watchdog. We can thank John McCain for that.
Its interesting that everyone jumped on Hilly because of her $ 5,000 per baby idea. 1) its not a bad an idea, as it personally invests each child in a privately held long term savings plan and 2) its cost is chickenfeed in relation to the federal budget.
Same with the 401K thing. Does anyone else notice that this is a partial privatization of SS plan?
Any plan that costs $25 billion and invests every child in the US in a college eduction, or gives every citizen a privately held retirement stake would be a positive thing - and quite conservative in philosophy. And $25 billion in a $3 trillion budget? That's not even coffee change in the US budget.
Of course, it wouldn't really cost 20 or even 25 billion. You're going to implement and administer a program to grant and invest $ 5,000 for 4.2 million kids....at zero admin cost? I don't think so. If anything, the bureaucracy involved would about double that.
So um, factcheck? I don't think those facts are checked.
Hillary is on crack if she thinks she can finance $20-25 billion from freezing the estate tax level in 2009. The money is not there.