Professor Krugman draws a blank after asking 'farm subsidies aside, which domestic programs have received lavish budget increases over the last three years?' The answer he couldn't provide:
unemployment benefits (85%)
education (65%)
general government (63%)
air transportation (52%)
community/regional development (43%)
health research (32%)
veterans' assistance (27%)
Medicaid (24%) and
income security programs (21%).
And these spending increases occurred in just two years (2001 to 2003) — a period even shorter than Professor Krugman's three-year range.
Following are the above numbers plus additional numbers from Riedl's original table in his Heritage Foundation backgrounder paper at http://www.cse.org/reports/heritagenov132003.pdf:
Spending Percent of
Increase 2-year $296
Percent billion increase
------------------------- -------- ----------------
unemployment benefits 85 9
education 65 8
general government 63 3
air transportation 52 2
community/regional development 43 2
health research 32 5
veterans' assistance 27 4
Medicaid 24 11
income security programs 21 11
National Defense 33 34
9/11-Induced spending NA 11
Social Security 8 11
Medicare 12 9
Other Programs 1 1
Net Interest -27 -18
----
100
As can be seen, he left off National Defense, 9/11-Induced spending, Social Security, and Medicare. Also, he left off the column that shows how much the increase of each program contributed to the total $296 billion increase. In the original article, Krugman stated:
A recent study by the Center on Budget and Policy Priorities does the math. While overall government spending has risen rapidly since 2001, the great bulk of that increase can be attributed either to outlays on defense and homeland security, or to types of government spending, like unemployment insurance, that automatically rise when the economy is depressed.
National defense, 9/11-induced spending, and unemployment benefits do account for about 54% of the 2-year increase according to Rield's original table. In any case, Krugman continued:
Why, then, do we face the prospect of huge deficits as far as the eye can see? Part of the answer is the surge in defense and homeland security spending. The main reason for deficits, however, is that revenues have plunged. Federal tax receipts as a share of national income are now at their lowest level since 1950.
This last statement can be verified in the first graph and table at http://home.att.net/~rdavis2/def05.html. The just-released budget projects that receipts for 2004 will be 15.7% of GDP. This will be the lowest level since they were 14.4% of GDP in 1950. Now it is true that the budget projects that spending will have increased from 18.4% of GDP in 2000 to 20.2% of GDP in 2004, an increase of 1.8% of GDP. However, receipts are projected to have dropped from 20.9% of GDP in 2000 to 15.7% of GDP in 2004, a decrease of 5.2% of GDP. That is nearly three times the increase in spending. Hence, it would seem that the drop in receipts contributed much more to the deficit than the increase in spending.
Krugman's original article addressed outlays and receipts but Luskin's and Rield's response did not even mention receipts. That gives some indication of whose article is the more balanced.