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Friday, July 25, 2003
 
The Tao of Deb – Deficits Matter

Our family lives by certain maxims promulgated by my wife. I call those maxims the “Tao of Deb.” The fourth maxim of the Tao of Deb is that “the definition of interest is money they pay to us.”

We are allergic to debt. We never borrow money to fund current consumption. We carry no credit card debt. We pay cash for cars and if we do not have the cash available, we drive old cars until we do.

The reasoning behind the Tao of Deb is that when money is borrowed, it must be repaid with interest. Interest payments reduce either consumption or savings. We prefer to forgo current consumption in order to maximize savings and consumption over the long run.

The same is true of government budget deficits. Those deficits are simply borrowing that must be repaid with interest. The payment of interest on the debt results either in higher taxes or lower government services.

It is not always bad for a family to borrow money. We borrowed to finance education, to buy a house and to start a business. In each of those cases, the returns were greater than the interest costs. Once we began to realize those returns, we dedicated all disposable income to pay off the debt as soon as possible.

So it also is with government borrowing. One circumstance in which it makes sense for the government to run a deficit is when the economy is falling into recession and needs a Keynesian stimulus. Like a family that incurs debt for a good reason, that debt should be quickly paid off by running a surplus when the economy is doing well. Over the economic cycle, the budget should balance.

Republicans apparently do not believe in the Tao of Deb. They run up debt to pay for current consumption in good times and bad. Of the forty-five budgets submitted from FY 1960 through FY 2004, the fifteen worst deficits (as expressed by percentage of GDP) occurred under budgets submitted by Republican presidents.

Since Ronald Reagan’s first budget, every budget submitted by a Republican president has resulted in a deficit. Each of those deficits was at least 2.8% of GDP except for FY 2002 when our current President was in the process of turning a surplus of 2.4% of GDP in FY 2000 into a deficit of 4.2% in FY 2003.

Many of those deficits were incurred despite the fact that the economy was doing well. In 1984, Ronald Reagan ran a deficit of 4.8% of GDP while the economy grew at a rate above 7%. George W. Bush proposes to run a deficit of $475 billion (plus the cost of operations in Iraq) next year while estimating that the economy will grow at a 3.7% clip.

From Ronald Reagan’s first budget through George W. Bush’s FY 2004 budget, the total debt incurred under Republican-submitted budgets is $3.54 trillion dollars. By way of comparison, the debt incurred under budgets submitted by Presidents Carter and Clinton was $192 billion, or about 1/18th of that incurred under Presidents Reagan, Bush and Bush.

How much interest do we pay each year on that $3.54 trillion? For FY 2002, we paid interest on the national debt at a rate of about 5.3%. See here and here for the data from which the interest rate can be calculated.

At that rate, the interest on the debt amassed under Presidents Reagan, Bush and Bush runs about $187 billion per year. Interest on the Carter and Clinton debt is about $10 billion per year.

The House and Senate are currently in conference over a bill to add a prescription drug benefit to Medicare. The President has insisted that the price of that benefit be held to $400 billion over ten years. Over the same ten-year period, we will pay more than four times that amount ($1.87 trillion) in interest on the Reagan/Bush/Bush debt.

Interest on the RBB debt is more than three times the amount the Federal government spends on education. It is larger than President Bush’s 2001 tax cut (over the ten-year period of the tax cut). It is about 250 times the amount spent on autism research.

The interest on the RBB debt is greater than the combined discretionary spending for the Departments of Agriculture, Commerce, Energy, Homeland Security, Interior, Justice, Labor, Transportation, Treasury, the Corps of Engineers, EPA, the National Science Foundation, NASA, and the Small Business Administration.

President Bush is fond of reminding us that he cuts taxes because “it’s your money.” The debt is yours, too. There are about 100 million households in the United States. On average, each household pays $1,870 per year (or about $150 per month) for interest on the RBB debt.

It is about time that Republican presidents learned the wisdom of the Tao of Deb.



Thursday, July 24, 2003
 
Address Changes

AutismWatch has moved to Movable Type. Please change your bookmarks. Emily has a number of great posts up there. I hope to contribute to AutismWatch again soon. So far, I have been unable to figure out how to post in MT. Life is hard for the technology challenged.

Natasha's The Watch has also moved. One of the nice things about participating in the blogging community is the opportunity to learn about subjects that do not ordinarily cross my path. Natasha has a great post about Brazil nut trees and the ecosystem of the rain forest. That is blogging at its best. Please make a note and pay her a visit at her new digs.

 
Who Burned Valerie Plame?

Via Tom Spencer I learned that the Senate Intelligence Committee will investigate the outing of CIA agent Valerie Plame.

If you have not been following this story, you should start. The best coverage of it has been by Mark Kleiman. Try here, here, here, here, here, here, and here.

In short, Former Ambassador Joseph Wilson was asked to go to Niger to investigate rumors that Iraq was trying to buy uranium from the African country. A few weeks ago, he wrote an op-ed (now behind the $ fire wall) in the New York Times that jump started the current brouhaha about George Bush telling whoppers in the run up to the war in Iraq.

The administration was none too pleased with Mr. Wilson. George Tenet took a few shots at him. Ari Fleisher took a few shots at him. All of that was sort of the normal rough and tumble of politics in Washington.

On July 14, the issue went to another level with the publication of a column by Robert Novak. Novak reported as follows:
Wilson never worked for the CIA, but his wife, Valerie Plame, is an Agency operative on weapons of mass destruction. Two senior administration officials told me Wilson's wife suggested sending him to Niger to investigate the Italian report. The CIA says its counter-proliferation officials selected Wilson and asked his wife to contact him. "I will not answer any question about my wife," Wilson told me.

The outing of an undercover CIA operative is serious business. Newsday reports as follows:
A current intelligence official said that blowing the cover of an undercover officer could affect the officer's future assignments and put them and everyone they dealt with overseas in the past at risk.

George Bush thinks that protecting intelligence operatives is important as well. Shortly after the 9/11 attacks, Mr. Bush said:
Any sources and methods of intelligence will remain guarded in secret. My administration will not talk about how we gather intelligence, if we gather intelligence and what the intelligence says. That's for the protection of the American people.

In October of 2001, Mr. Bush said:
I mean, when the classified information first seeped into the public, I …said, this can't stand. We can't have leaks of classified information. It's not in our nation's interest.

But we're now in extraordinary times. And I was in the -- when those leaks occurred, by the way, it was right before we committed troops. And I knew full well what was about to happen. And yet, I see in the media that somebody, or somebodies, feel that they should be able to talk about classified information. And that's just wrong.

In addition to putting people at risk, the outing of an undercover CIA agent is a felony. Jeff Cooper provides the relevant law:
Whoever, having or having had authorized access to classified information that identifies a covert agent, intentionally discloses any information identifying such covert agent to any individual not authorized to receive classified information, knowing that the information disclosed so identifies such covert agent and that the United States is taking affirmative measures to conceal such covert agent's intelligence relationship to the United States, shall be fined not more than $50,000 or imprisoned not more than ten years, or both.
- 50 U.S.C. section 421(a)

Novak makes plain that the information was an outing of Plame and not the result of investigative digging. Newsday reports:
Novak, in an interview, said his sources had come to him with the information. "I didn't dig it out, it was given to me," he said. "They thought it was significant, they gave me the name and I used it."

David Corn in the Nation confirms that the story was handed to Novak:
Novak tells me that he was indeed tipped off by government officials about Wilson's wife and had no reluctance about naming her. "I figured if they gave it to me," he says. "They'd give it to others....I'm a reporter. Somebody gives me information and it's accurate. I generally use it." And Wilson says Novak told him that his sources were administration officials.

So, it appears that two “senior administration officials” committed a felony and endangered national security operations in order to disparage an administration critic. That is a real scandal. The leakers should be identified, charged and tried.

Who are the “two administration officials”? There are not a whole lot of possibilities. The two people outing Valerie Plume had to have high security clearances or they would have no way to know that she was a CIA agent.

Tapped tells us that the term “senior administration officials” is a term of art:
"Senior administration officials," as many of our readers know, is a term of art used by both the press and by the administration. When reporters cite "senior administration officials," they generally mean the vice-president, the cabinet secretaries, those with cabinet-rank, the chief of staff, maybe the deputy chief of staff, and a couple of other really senior advisors. It's a fairly limited pool. Likewise, the White House will sometimes offer briefings with top officials -- sometimes even to groups of journalists -- on the condition that they be identified only as "senior administration officials."

The group described by Tapped also happens to be a subset of the people with the type of security clearances necessary to have the information that Plame was an undercover CIA agent.

How can we narrow down the list to actually identify the felons?

Fortunately we have recent precedent for how to do it. In the summer of 2002, a closed door briefing of the House and Senate Intelligence Committees discussed the fact that the National Security Agency had intercepted two specific messages of Al Qaeda on September 10, 2001 but did not translate the messages from Arabic until after the 9/11 attacks. That information soon leaked. See here and here.

The Senate cooperated in the subsequent investigation of the leak:
The Justice Department sent a letter to the Senate counsel's office Aug. 7 requesting that members of the Senate committee and their press staff submit telephone logs, memos, visitor sign-in sheets and other material showing communications with the news media between noon June 18 and 3:15 p.m. June 19, when CNN broadcast details of the intercepts.

The letter also called for calendars, appointment books and e-mails for the senators and their press staff during that period. No similar request was made of House Intelligence Committee members.

Contacted Thursday by The Associated Press, the offices of 13 of the 17 committee members said they are complying with the request. No office said it wasn't. In the other four offices, information wasn't available because the senator was traveling.

The committee's chairman, Sen. Bob Graham, D-Fla., has instructed his staff to compile the material requested, said his spokesman, Paul Anderson.

Anderson said Graham supports the FBI investigation because the leak of classified information violated the law.

The outing of Valerie Plame is also a violation of law.

The administration should cooperate with any Congressional investigation. It can begin by turning over “telephone logs, memos, visitor sign-in sheets and other material showing communications with the news media” as well as “calendars, appointment books and e-mails” for all executive branch employees with the security clearance needed to know of Ms. Plume’s undercover role and who fit the definition of “senior administration officials.”

That, of course, assumes that the administration actually wants to identify the felon in its midst who was willing to compromise national security to punish an administration critic.



 
Focus The Mind

Kevin Drum has often remarked at how difficult it has been for him to get solid data on the issue of tort reform in the context of medical malpractice suits.

Via the Bloviator, I learned that Kevin’s frustration was shared by certain legislators in Florida.

Florida Governor Jeb Bush, like his brother, is pushing for legislation that would establish a $250,000 cap on awards for non-economic damages as a “solution” for the medical malpractice insurance “crisis.”

Jeb Bush called a Special Session of the Florida Legislature to consider the measure. A number of Florida State Senators felt that they were having a difficult time getting straight answers to their questions.

They then took an obvious but rare step. They required the witnesses to swear an oath to tell the truth before testifying.

In Florida, witnesses before the Legislature rarely have to swear to tell the truth. According to this report, it was only the “third time in the past decade that witnesses were sworn, other than cases in which agency heads testify at confirmation hearings.”

According to one columnist:
What happened after that "was pretty scary," said Sen. Ron Klein, D-Boca Raton, the Senate minority leader.

"People who had testified before us on previous occasions got up there and told us different things."

Among the revelations (culled from various articles and columns) that occurred after the lobbyists were faced with possible penalties for perjury:
* "I am not aware of any instance where we said the problem was the enormous amount of frivolous lawsuits," said Jeff Scott, legal counsel for the FMA (Florida Medical Association).


* When Sandra Mortham of the Florida Medical Association testified, Campbell demanded to know why Mortham had blamed "frivolous lawsuits" for the rise in malpractice rates. "Certainly, I've never said that," replied Mortham, a former House member from Largo and the FMA chief executive officer. "I don't feel I have the information to say whether or not there are frivolous lawsuits in the state of Florida."


* A state regulator said no, there hasn't been an explosion of frivolous lawsuits.


*Witness after witness denied a crush of frivolous lawsuits has crippled the state's medical malpractice tort system.


* We fixed the frivolous lawsuit problem" in past legislative sessions, testified Bob White, president of First Professionals Insurance.


* Insurers didn't need a cap on jury awards to be profitable.


* State data shows malpractice claims have not skyrocketed and that Florida has more physicians than ever.


* There has been no sharp rise in medical malpractice settlements made by insurance companies.


* A state insurance regulator surprised senators by saying he often depended on insurance companies' information when deciding whether to raise rates.


*Contrary to stories of doctors quitting the business, the number of licensed doctors is increasing. A Health Department official said new applications for new medical licenses in Florida rose from 2,261 in fiscal 2000 to 2,658 in fiscal 2003.


*Bob White, president of First Professionals Insurance Co., the state's largest malpractice insurer, surprised senators by blaming rising premiums mainly on new medical technologies and procedures...


*The hearings also revealed that White's company pays $500,000 a year as an "endorsement fee" to the Florida Medical Association, the doctors group that rallied for the cap.


*First Professionals was lobbying for the damages cap at the same time it has “boasted to stockholders of its profits in Florida.”


* The Florida Medical Association received $4.5 million in endorsements from insurance companies to lobby for tort reform. That represents about 10% of the FMA budget.

It seems that the prospect of spending a few years incarcerated in the Florida penal system for perjury tends to focus the minds of the lobbyists/witnesses on the truth.

Update: I notice that Kevin Drum is also writing about the Florida revelations.


 
Hey Big Spender

I noted the following comment by David Brooks, Senior Editor of the Weekly Standard during his recent appearance on PBS’s News Hour:
DAVID BROOKS: The problem for me is when the economy recovers and the deficits don't come down because we should be stimulating the necessity when we are in a situation like this. I have my doubts that the deficit is going to come down as the White House projects it will over the next few years. We have the Medicare plan, a whole bunch of spending stuff, defense, homeland security. And I have a feeling the deficit is going to continue to grow. This year ....

RAY SUAREZ: This year's forecast, even with the tax cuts factored into the macro economy, there's a sort of ambient high level of deficit in the 200 million that remains to the end of the decade.

DAVID BROOKS: Right now the deficit is 4.2 percent of GDP that they're projecting for this year; that's about normal when you are running a recession. Then it's supposed to come down according to projections to about 1.8 percent of GDP, which would be great. My question is will it really? One of the things we've learned is that Democrats are better at controlling spending than Republicans. Bill Clinton's growth domestic spending was a lot lower than George W. Bush's or George H. W. Bush's were. And so I have a feeling the Republicans are going to spend. (Emphasis added).

I am glad we finally got that straight.


Tuesday, July 22, 2003
 
Frivolous Suits and Improper Purposes

I have previously commented that the popular notion that plaintiffs receive large judgments and settlements as a result of frivolous suits is largely myth.

That is not to say that frivolous suits are not filed. Many are filed. My point is that overwhelming majority of frivolous suits just lose. They lose on motions to dismiss. They lose at summary judgment. They suffer directed verdicts. They lose before juries and they lose on appeal.

There is one circumstance in which frivolous suits can lose and the plaintiff still win. That circumstance is when the objective of the suit is other than actually prevailing on the merits in court.

For instance, pharmaceutical companies have a monopoly on patented drugs for a specified period of time. One quirk in the law is that if a company sues a generic manufacturer for patent infringement, the patent holder gets an automatic 30 month extension of the patent by simply filing suit regardless of whether or not the suit has merit. See this NY Times editorial:
Some brand-name manufacturers have been extending the effective lives of their patents by tactics that are underhanded at best and appear fraudulent at worst.

Ordinarily manufacturers are granted patents that give them a monopoly for 20 years, which is ample time to recover development costs and make a profit before generic competitors are allowed on the market. But through loopholes in current law, the companies can get an automatic 30-month extension simply by filing suit against a generic manufacturer asserting that the generic product will infringe secondary patents on packaging and other minor items.

In some cases, manufacturers have been able to get even longer extensions by filing multiple patent-infringement suits. A study by the Federal Trade Commission issued in July cited eight cases since 1982 where brand-name companies got additional delays, beyond the first 30-day stay, ranging from 4 to 40 months. In the four cases that have reached a court decision, the brand-name manufacturers lost each time, suggesting that their suits were little more than legal ploys to gain additional time to reap monopoly profits, not serious litigation.

The purpose of those suits is not to win the patent infringement case but rather to extend the life of the patent on profitable drugs. As long as the litigation costs are lower than the profits earned by the extension of the monopoly, the suit makes economic sense regardless of whether it has legal or factual merit.

Via Ampersand I learned of another suit that may be frivolous legally but might succeed in accomplishing other objectives.

Oakhurst Dairy of Portland, Maine chooses not to sell milk from cows that have been given artificial hormones.

Oakhurst requires each of its milk suppliers to sign an affidavit swearing that they do not give their cattle artificial hormones. The affidavit must be updated every six months. Oakhurst pays a premium for milk from cows that are not given hormones. Last year, the premium amounted to about half a million dollars.

Oakhurst advertises the fact that its milk comes from cows that are not given artificial hormones. Oakhurst’s milk has a label proclaiming “"Our Farmers' Pledge: No Artificial Growth Hormones."

Oakhurst’s policy was implemented in reaction to consumer preference. Oakhurst’s President is quoted as follows:
Consumers have let us know since the advent of these artificial growth hormones that they don't want to have to worry about (them). If consumers tell us they don't want anything added to the milk, or if they have a concern about something, we're going to respond to them as a company.

Oakhurst had revenues of about $85 million in 2002. It employs 240 people. It is not a large company.

Monsanto is a large company. According to its 2002 Annual Report, Monsanto had revenue in excess of $4.6 billion.

Among Monsanto’s products is an artificial hormone given to cattle to help increase milk production.

Monsanto took exception to Oakhurst’s “no artificial hormone” policy and filed suit against Oakhurst. According to one report:
The suit against Oakhurst claims unfair competition, unfair business practices and interference with advantageous business relationships. According to the suit, the business relationships between Monsanto and dairy producers who use the artificial growth hormone have suffered because the farmers will stop using the treatments.

Another report notes:
Monsanto claims that Oakhurst is misleading customers with labels and a marketing effort that includes the statement, "Our farmers' pledge: No artificial growth hormones."

Monsanto said Oakhurst's slogan implies there's something wrong with milk produced by cows that have been injected with the growth hormones, even though the federal Food and Drug Administration has found that the milk is not affected by the hormones.

Does giving dairy cows Bovine Growth Hormone make their milk any less safe? I do not have a clue. The FDA approved the use of BGH here but it is banned in Canada and Europe.

An Oakhurst spokesman makes clear that he doesn’t know either:
"We have said from the beginning that we make no claims to understand the science involved with artificial growth hormones," he said. "We're in the business of marketing milk, not Monsanto's drugs."

I think that Monsanto’s claim is frivolous. First, it has not been alleged that Oakhurst’s claim that its milk is from dairy cows not injected with artificial hormones is false. Thus, the statement on its milk jugs is perfectly accurate. Secondly, Oakhurst makes no claims that its milk is safer than milk from cattle treated with BGH. It makes no mention of Monsanto or any Monsanto product.

Oakhurst is simply responding to customer preference. It is using advertising to accurately state the nature of its product. It is doing so in an effort to distinguish its product from other, similar products. That is what advertising is supposed to do. It is hard for me to see how Oakhurst did anything other than promote its product through truthful advertising.

I predict that Monsanto’s suit will go down in flames if Oakhurst chooses to fight.

The amount of additional revenue Monsanto would earn if Oakhurst accepted milk from dairy cows treated with BGH is tiny. The effect of such revenue on the bottom line of a company the size of Monsanto is infinitesimal. Why would Monsanto incur the costs of suing to stop one small dairy in Maine from advertising artificial hormone free milk?

One report suggests an answer:
To some Maine dairy farmers, there's clear reason why Monsanto Corp. sued Oakhurst Dairy last week over its marketing of milk produced without artificial hormones: Monsanto is staging a last-ditch effort to save a product that seems to be losing favor among New England farmers and consumers alike.

"They're doing this out of desperation," said John Nutting, a dairy farmer from Leeds and former state legislator. "Most of us farmers don't want to do anything to cause concerns among consumers." ...

The chemical industry as a whole, though, worries that resistance to bioengineered food products - rampant in Europe and some other regions - could spread to the United States. American consumers have been buying more products that are marketed as organic or all-natural in recent years.

It appears that Monsanto may be using litigation not to vindicate its rights but rather to intimidate. Monsanto may hope to gain not from the success of the suit but rather from the costs such a suit will impose on Oakhurst. The cost of winning the suit may be more than Oakhurst can afford.

Monsanto may be trying to send a message not only to Oakhurst, but also to many other small dairies. The message might be “If you advertise that your milk is from hormone free cows, you will have to spend a lot of money on lawyers instead of your business.” If that is in fact Monsanto’s intent, the suit was brought for an improper purpose.

Will Oakhurst spend the money to fight Monsanto? Oakhurst is clearly concerned about litigation costs:
Yet Bennett (President of Oakhurst) noted … what could be an expensive legal battle with a much larger company.

"That's a $4 billion company and one that's losing a lot of money," he said. "When a company that size brings a lawsuit against a little company like ours, sure I'm concerned, because who knows how much it will cost to litigate. But we feel very strongly that we're doing the right thing."…


Frivolous litigation is often discussed only in the context of personal injuries claims. Some frivolous and abusive litigation arises in completely different contexts. To close, I would like to pose one question.

Will a cap on damages for pain and suffering do anything whatsoever to prevent the type of frivolous litigation exemplified by suits designed only to extend drug patents or intimidate small dairies?




 
Autism and Head Circumference - The JAMA Article


The Journal of the American Medical Association recently published a study of autism and head circumference. The JAMA article is here.

Previous studies had noted that autistic toddlers had larger heads than other kids. Other studies, apparently, have shown that in the early years, head circumference is indicative of brain size.

The authors of the JAMA study, Dr. Eric Courchesne, Dr. Ruth Carper and Dr. Natacha Askoomoof set out to determine:
whether pathological brain overgrowth precedes the first clinical signs of autism spectrum disorder (ASD) and whether the rate of overgrowth during the first year is related to neuroanatomical and clinical outcome in early childhood.

The researchers located 48 autistic kids, aged 2-5, for whom MRIs showing current brain size were available. They then gathered the medical records for those kids including head circumference records (as recorded by pediatricians) at birth and at various other age milestones.

The study compared the growth in head circumference of the autistic kids to national databases.

The results of the comparisons showed that the autistic kids were born with below average head circumferences (and by inference, smaller sized brains) but that by the time the kids were 6-14 months old, their brains were larger than average.

As the study’s conclusion notes:
Specifically, we found a rapid and excessive increase in HC measurements, and therefore, presumably, brain size, beginning several months after birth. This abnormally accelerated rate of increase in HC measurements in infants with ASD was evident in comparisons to 2 nationally recognized normative databases, one a national cross-sectional survey and the other a longitudinal study of growth patterns in healthy infants. In our study, head size increased from the 25th percentile based on the CDC averages of healthy infants to the 84th percentile in 6 to 14 months. This excessive increase occurred well before the typical onset of clinical behavioral symptoms.

The study also showed that among its sample group, the rate of increase in head circumference was correlated with the severity of the autistic behaviors:
Among the infants who have the more severe form of autism, 71% showed increases during their first year of more than 1.5 SDs, with 59% showing increases between 2.0 and 4.3 SDs. Such high percentages were not observed in the typically developing infants in the Fels Longitudinal Study sample.

For some autistic kids, brain size development appears to be abnormal. They are born with smaller brains and then undergo rapid brain growth.

The JAMA study is important for two reasons. First, the suggestion that autism is related to abnormal brain growth gives a clue to the neurobiological causes of autism in some people. Those clues could, someday, result in treatment for some autistic people. As a Newsweek article says:
“The abnormal growth patterns give you a clue that something is amiss,” says Dr. Margaret Bauman, a neurologist at Harvard Medical School and the LADDERS Autism Research Foundation, “but we can only guess at the underlying process.”

Courchesne believes it can be summed up in three words: “growth without guidance.” Normal brain development is not a monologue but a dialogue, in which the brain generates neural circuits and the child’s experiences determine which ones survive. The first year of life is a critical period for this “experience-guided growth”—and it’s not hard to see how a sudden shift into high gear might derail it. The brain’s circuitry would expand haphazardly as cell growth outpaced experience, creating a chronic sensory overload. Courchesne hopes researchers will now confirm the dangers of unregulated brain growth by inducing it experimentally in animals. “Once we know what causes this growth defect,” he says, “it may be possible to use biological treatments to counter it.”

The difficulty, of course, is that we do not yet know either the cause of abnormal brain growth nor the mechanism by which abnormal brain growth might result in autistic behaviors. Much more research is needed.

The study is also potentially important as a kind of early warning system for autism. The abnormal brain growth occurs well before the onset of autistic behaviors in some children. If we note the abnormal brain development, some treatments, such as Applied Behavioral Analysis, could begin even before autistic behaviors emerge. It is well known early intervention is important to successful outcomes with autistic kids. The study touts that potential benefit:
This is the first study to our knowledge to find a potential early warning neurobiological sign for autism and to link it to a later brain abnormality.


The difficulty with the early warning system is that it is not a very good predictor. Many non-autistic kids also show the same brain development pattern as autistic kids. The Newsweek story notes the following:
The more immediate goal is simply to recognize autism at earlier stages, and to give affected kids the support they need to grow and learn and cope. Will the new findings advance that cause? Dr. Janet Lainhart, an autism expert at the University of Utah, is skeptical. “The findings... are most useful to researchers attempting to define the underlying developmental neuropathology of autism,” she writes in |a commentary on the San Diego study, “rather than to physicians trying to identify young children with autism.” That’s because rapid head growth can signal other childhood maladies, including tumors and hydrocephalus, and often means nothing at all. Lainhart calculates that if doctors used head circumference as a screening test for autism, they would pick up 60 healthy children for every autistic one.

Some media reports have hyped the JAMA study. News reports often fall into the trap of assuming that austism is one thing with one cause. As I have noted before, autism may in fact be a lot of different things with a lot of different causes.

For instance, the Washington Post reports:
The research also provides further evidence contradicting the theory that autism could be triggered by vaccinations given just before age 3.

That simply is not true. It might be true if the cause of autism could only be either abnormal brain growth or vaccines. If there are multiple causes of autism, abnormal brain growth might be a cause in some autistics while mercury exposure or the MMR vaccine (and a number of other things) could cause autism in other people.

A number of studies have shown dramatic increases in the incidence of autism. Unless some external factor other than genetic predisposition is causing abnormal brain growth, it is hard to square the increase incidence of autism with brain growth being the one and only cause. For instance, neither Mary Beth’s kids nor my son experienced the head circumference pattern identified in the study.

The JAMA study advances our understanding of autism. The JAMA study may point the way to further research that will result in an understanding of the neurobiological basis for the behaviors of some autistics.

Despite the breathless tone of some media reports, the JAMA study is not a silver bullet that unlocks the mysteries of the causes of autism. The study is important because it identifies one piece of a complicated puzzle. It is a step and a step in the right direction but it is not the entire journey. The JAMA study very important for what it actually is. It does not need to be hyped.



Sunday, July 20, 2003
 
Choose Wisely

I have been spending some time with OMB’s Mid-Session Review. Let’s play a little game of Make a Budget based on that document. Please choose wisely.

For our game, let’s make a budget for Fiscal Year 2004 which begins October 1, 2003. That is a good choice for our game as it should be relatively easy to make a budget for FY 2004. FY 2004 comes almost two years after the end of the shortest and shallowest recession in memory. Second, the administration estimates economic growth for FY 2004 to be a very respectable 3.7%. Third, interest rates are at historic lows. Low rates reduce the cost of government borrowing. Fourth, FY 2004 comes well after Mr. Bush stood on the deck of an air craft carrier and announced the Iraq war over. Finally, the FY 2004 budget comes during the period in which the administration promised 5.5 million new jobs from tax cuts (and the normal performance of the economy) on top of the 300,000 new construction jobs that the administration promised from the terrorism insurance bill. Given all of those positive factors, it should not be hard to make a budget.

The game works this way. We take the all government receipts as estimated by OMB in its Mid Session Review and try to balance the operating budget of the United States. In the 1990s, a consensus developed that the Social Security surplus should be used to pay down debt in order to prepare for the retirement of the baby boomers. Almost every politician of both parties promised to do so, including, famously, George W. Bush. Thus, it would be inappropriate to use the Social Security surplus for purposes other than paying down debt.

To play, you start with $1,797,000,000,000. That is OMB’s estimate of FY 2004 receipts of the Federal Government from individual income taxes ($786.6 billion), social insurance and retirement receipts ($748.6 billion), corporate income taxes ($144.1 billion), excise taxes ($70 billion), estate and gift taxes ($22 billion), custom duties ($22 billion) and miscellaneous receipts ($34.1 billion). Those figures have been reduced by $30 billion for something called “revenue uncertainty.”

Almost $1.8 trillion dollars sounds like a lot of money, and it is. It is in the neighborhood of 16% of GDP. Still, fair warning, the money will go fast.

Okay, now let’s spend some money.

First up is interest on the national debt. We can hardly afford to default on our bonds. Interest costs for FY 2004 are estimated to be $165 billion or about 9% of your bankroll. You now have $1,632 billion left to spend.

Do you want to fund the military? If so, it will cost you $409 billion. That is 23% of your starting total. After funding the military you have $1,223 billion left to spend.

Next up is Social Security. That is the third rail of American politics. Touch it and you die. Neither party is currently advocating serious cuts in Social Security benefits. President Bush’s proposal to partially privatize Social Security without cutting benefits makes the budget harder, not easier, to balance. If we fund Social Security at the levels proposed by the administration, the cost is $492 billion. You have $731 billion left.

Remember though, that we are not going to use the Social Security and Medicare surpluses to fund current operations. OMB’s estimate of the “off budget surplus” is $164 billion. You have $567 billion remaining.

The political consensus these days is to expand not cut Medicare benefits. Memories of the gray brigade attacking Dan Rostenkowski’s car remain vivid. If you choose to fund Medicare, it will cost $259 billion. You have $308 billion left.

How about a Medicaid program to fund health care for the poor? Medicaid pays for nursing home costs for lots of elderly folks. Medicare does not pay for long term care. Maybe we should just put the burden of care for the elderly on their families. If we do, two earner families may have to forego one income stream in order to have someone stay home with their parents. Also, if we do not fund Medicaid, poor folks may have a hard time getting basic health care. The price tag for Medicaid is pretty steep. If you fund it, you will spend $187 billion leaving you with $121 billion remaining to fund the rest of government.

I told you the money would go fast. You have spent one trillion six hundred and seventy six billion dollars or about 93 percent of your total on interest, military, Social Security and the medical programs for the aged and poor.

Woops, we forgot something. The military budget as outlined by OMB does not include anything for continued operations in Iraq or for the reconstruction of Iraq. We are spending $3.9 per month in Iraq now. If that spending continues throughout FY 2004, that will cost an additional $46.8 billion. I am sorry not to give you a choice about that funding but the consequences of simply pulling out of Iraq are too great and it is money we have to spend. You are left with $74.2 billion to fund the remainder of government.

We cannot forget the Homeland Security Department. That costs $28 billion for the non-military portion.

In the mid 1990s, the Republicans were fond of calling for the elimination of the Department of Education. President Bush has decided to expand education spending. If you decide to leave no child behind the price tag for the department is $53.2 billion. Uh oh, the Homeland Security and Education spending put you over budget.

Sorry, no more government programs. If you plan to visit Washington this summer for vacation, don’t fly as their will be no air traffic controller to guide your plane. The train is not an option as Amtrak will not be running. If you drive, watch out for potholes as we have not funded highway repairs or construction. Once you get to Washington, do not try to visit the Smithsonian or the memorials. They will be closed.

The White House will have no speech writers or staffers to blame for what comes out of the President’s mouth. Congress will have no funds for Congressmen, staffers or even to print legislation.

While North Korea builds nuclear weapons, we will not have the money to pay for Colin Powell to fly anywhere for talks. We did not fund the State Department. Mr. Bush’s program to fight AIDS in Africa must fall to the wayside.

Be sure to tell our veterans they will not be receiving the benefits we promised them when they put their lives on the line to protect our freedoms and interests.

We forgot to fund the Justice Department’s $25.1 billion. So we just do without an FBI or any federal prosecutors. Martha Stewart and every federal prisoner will get a get out of jail free card. The Security and Exchange Commission will not keep crooks from defrauding you out of your investments. The Supreme Court will not be hearing cases.

Tell NASA, the CDC, the National Institute of Health and the National Science Foundation to close their doors. Make sure to turn out the lights when we close Yellowstone and the rest of the National Parks.

Do you live near a flood plain or a lake? Sorry, the Corps of Engineers is out of business.

Do not expect Big Bird or Elmo to entertain and educate your kids.

Oh, by the way, we did not fund the EPA so making sure your air and water are clean is up to you. Learn how to inspect meat because the Agriculture department will not be doing it.

You will no longer be troubled by those bad unemployment reports. Neither Commerce nor Labor will be collecting the data. If you lose your job, no unemployment check will be in the mail.

We are entering the fat part of the business cycle. It is time to prepare for the retirement of the baby boomers and get our fiscal house in order.

When Ronald Reagan faced huge budget deficits and the fiscal challenges of the retirement of the baby boomers, he raised taxes. When George H.W. Bush faced large structural deficits, he raised taxes as part of deal that also restrained spending. Bill Clinton faced down the deficits and turned them into surpluses in part by raising taxes on the wealthy and restraining spending growth.

George W. Bush promised to keep the operating budget in balance and pay down all publicly held debt to prepare for the retirement of the boomers. Instead he has reacted to a deteriorating fiscal situation by cutting taxes and going on a spending spree.

We have several choices. We can retract some of the tax cuts. We can make cuts in popular and effective programs like Social Security and Medicare. We can do a little bit of both. Alternatively, we can hide our head in the sand and pass the pain down to the next administration. Mr. Bush has chosen the last alternative. Is that a wise choice?