Alexandria Ocasio Cortez Doesn’t Understand Budgets, Does She? Nor, Really, Numbers

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That the snowflakes of Brooklyn have elected Alexandria Ocasio Cortez is just fine. It really is part of the democratic system that you get to send your vote in any direction you wish. And after all, every system, even politics, is exactly the same as a compass in requiring a butt end that always points the wrong way.

However, we might hope that someone who is now going to, as a member of the House, aid in creating spending budgets have some clue as to how budgets work. Or, if we’re to be less picky about it, have some familiarity with the concept of numbers. Presumably, as an ex-bartender*, she can count but…..

It’s not exactly obvious:

Congresswoman-elect Alexandria Ocasio-Cortez suggested that “Medicare for all” costs be covered by money allocated to the Department of Defense. The New York Democrat over the weekend referenced a Nation magazine report about problems with a Pentagon audit due to bookkeeping deficiencies, irregularities, and errors. “In all, at least a mind-boggling $21 trillion of Pentagon financial transactions between 1998 and 2015 could not be traced, documented, or explained,” the progressive publication reported.

Hmm, well, yes, maybe. Except, well, maybe no in more detail:

Umm, no, hang on, the Pentagon budget’s nowhere near that large:

Incoming member of Congress Alexandria Ocasio-Cortez made an embarrassing error over the weekend, in which she claimed that roughly two-thirds of the $32 trillion projected cost of extending Medicare coverage to everybody could be paid for simply by targeting Pentagon fraud. In reality, her math was egregiously off.

Umm, yes, yes it was. Because:

The underlying article by Dave Lindorff in the Nation that kicked this off is an investigative report into the Defense Department’s accounting practices. Lindorff reveals that Pentagon accounting is quite weak, that the department keeps flunking outside audits, that funds are shifted between accounts without proper oversight, and that overall documentation of what’s actually happening with the Pentagon’s vast budget is extremely poor. Lindorff goes beyond these observations to allege that what’s happening amounts to deliberate fraud, the purpose of which is to persuade Congress to increase appropriations levels beyond what would otherwise be approved. Critically, however, the passage of the article that Jordan Uhl quoted in the tweet that Ocasio-Cortez cited does not mean that there is $21 trillion in fraudulent or missing DOD spending between 1998 and 2015. Indeed, there simply hasn’t been $21 trillion in (nominal) Defense Department spending across the entirety of American history. The $21 trillion figure represents a summation of poorly documented internal financial transfers, so that the same dollar can be transferred back and forth many times over. That’s how you end up with a total amount of mis-documented financial flows that far exceeds the amount of money that’s being actually spent.

Imagine the shame of being corrected on matters economic by Matt Yglesias. Well, OK, the shame of being correctly corrected.

The economist (despite being at Berkeley, a very good economic historian indeed) Brad Delong sometimes runs a course on numbers that journalists should know. Nothing extreme, just the sort of background stuff that people should know in order to be able to sift through stories. There’re 320 million Americans – hell, 300 million’s good enough here. Some 160 million (whatever, near 170 million now) have jobs. US government at all levels takes about 30% of everything (sorry, 29% of GDP). Just numbers that allow everyone to have a rough sense of proportion so that they can filter stories passing by.

Using such rough numbers the Pentagon budget is some $600 to $700 billion a year, Medicare is some $500 to $600 billion. For our purposes here, that’s the same number. You know, rough numbers, just to be able to filter a claim. Medicare offers health care to some 50 million (OK, 55 million) people. So, let’s eliminate the Pentagon budget entirely, spend it all on Medicare for all. We’re not going to be able to do it, are we? Because we’ll not provide health care to 320 million people for only twice the price we currently pay for 50 million, are we?

The point isn’t that arguing for less military and more health care is a bad thing to do. Personally I think the US Marines are a better buy than prostate surgeries, the F 35 is way cooler than most colostomy bags – all unless Louis Vuitton is now making covers for them. But to argue for more of one and less of the other may be something I disagree with but it’s not a bad political argument. But Alexandria’s argument here is absurd simply because she’s not got that basic understanding of the rough and ready sizes of numbers here. Which is why she didn’t immediately spot that absurdity of the argument being presented. She doesn’t understand budgets and isn’t quite au fait with the basic numbers of the world. What joy she’s just been elected to the political house that determines budgets for the country, eh?

*No, this is not some demeaning crack about her former employment. I too am an ex-bartender and enjoyed the job immensely and did it for a number of years. It’s also one of those jobs where you get to bring great joy to your customers – at least if you’re doing it right. Bartending is also an honourable trade which is a second way it differs from politics. And yes, I’ve also worked in that – I do know this stuff.