Derek Thompson

The nearly 3.7 million American babies born in 1982 weren't special, except to their families. But in the eyes of demographers, they were categorically different from the 3.6 million Americans born in 1981. They were the first members of a new club: Generation Y.

This so-called millennial cohort, the largest generation in American history, landed in the cradle during an awful recession, learned to walk during the Reagan recovery, came of age in the booming 1990s, and entered the labor market after the Sept. 11 attacks and before the Great Recession, the two tragedies of the early 21st century. They've survived an eventful few decades.

Yet nothing in those vertiginous 30 years could have prepared them for the economic sledgehammer that followed the collapse of the housing market in 2007-08. And the aftereffects, economists fear, may dog them for the rest of their working lives.

Generation Y is the most educated in American history, but its education came at a price. Average debt for graduates of public universities doubled between 1996 and 2006. Students chose to take it on because they expected to find a job that paid it off; instead, they found themselves stranded in the worst economy in 80 years. Young people who skipped college altogether have faced something worse: depressed wages in a global economy that finds it easier than ever to replace jobs with technology or to move them overseas.

Finding a good job as a young adult has always been a game of chance. But more and more, the rules have changed: Heads, you lose; tails, you're disqualified. The unemployment rate for young people scraped 18 percent in 2010, and in the past five years, real wages have fallen for millennials--and only for millennials.

Adulthood, Deferred
It costs a lot to be a grown-up. It means more than saying "please" or holding doors for the elderly, although those are nice to do. It also means moving out of your parents' home, renting a place of your own, paying for food and clothes, buying a car, getting married, having children, buying a house--all the trappings and expenses of a middle-class life.

These life stages drive a consumer economy. "Housing IS the Business Cycle" is the memorably brief title of a 2007 study by University of California (Los Angeles) economist Edward E. Leamer showing that the housing market both presages recessions and bolsters recoveries. A generation that buys new homes is a generation that pushes the economy forward.

But millennials have responded with a collective "No, thanks." Or at least "Not yet." More than one in five Americans ages 18-34 told Pew Research Center pollsters last year that they've postponed having a baby "because of the bad economy." The same proportion said they were holding off marriage until the economy recovered. More than a third of 25- to 29-year-olds had moved back in with their parents. Millennials have been scorned as perma-children, forever postponing adulthood, or labeled with that most un-American of character flaws: helplessness.

The case for pessimism is depressingly easy to make. Even after the economy recovers, the penalty for graduating into a recession may still apply to young people's wages. When Lisa Kahn, an economist at Yale, studied how the 1981-82 recession affected the lifetime earnings of young workers who graduated during the 1980s, she found that for every percentage-point increase in total unemployment, the starting incomes of new graduates slipped by as much as 7 percent. Two decades later, because of their bad timing, these graduates had taken a $100,000 hit to their cumulative earnings.

If this pattern applies to millennials, the consequences will be grim for an economy that relies on big-ticket items such as houses and cars. Half of a typical family's spending goes to transportation and housing. But Americans ages 21-34 bought only 27 percent of the new vehicles sold in the United States in 2010, compared with 38 percent in 1985; from 2008 to '11, only half as many young Americans as a decade earlier acquired their first mortgage. Having been rejected by the economy, millennials are in turn rejecting cars and houses--the pillars of the modern consumer economy.

Life Gets Better (and Cheaper)
Still, do millennials really count as the unluckiest generation since World War II? It's true that wages haven't grown this slowly in decades, and globalization and technology have held down wages for millions of young workers to an unprecedented extent.

But in some ways, millennials are also the luckiest.

For one thing, they're living in an age of affordable abundance. Food has never been cheaper as a share of the typical American family budget. The price of apparel is also falling relative to wages. The Internet, while no substitute for gainful employment, has made many things cheaper that used to take extra income to buy--communication, notably, including private information-sharing and professional collaboration. It has made casual retail cheaper (and more convenient). It has also made mass entertainment cheaper, especially music and amateur videos. These commodities have grown cheaper, in part, by replacing and lowering the cost of human work.

That we live in a golden era of cheap essentials and entertainment might register as cold statistical comfort for the millions of unemployed millennials who watch their dreams fade with every passing year. This group can hope for another mitigating factor: time. The U.S. economy is expected to continue its recovery--unemployment falling, wages rising, debts slowly getting repaid, life going on as it did before 2008. In an economy that is now creating 200,000 private-sector jobs a month, the total debt held by young adults has shrunk to its lowest level in 15 years.

Even if millennials haven't read about these trends, they seem to feel them in their bones. The Pew study that found twentysomethings moving back home also reported that nine in 10 millennials said they already earn (or have) enough money, or expect to in the future. If optimism has any currency, the millennials may well outgrow their miserable circumstances and bequeath to their own children a more prosperous nation than their parents left for them. They're the best-educated generation in American history, moving into their prime working years while home prices remain fairly cheap. Is that so unlucky?

Still, their timing couldn't be unluckier. The past 30 years have seen enduring income stagnation capped by an economic collapse. Average household wealth nearly doubled between 1983 and 2010, the Urban Institute recently found, but younger generations shouldn't expect the same. They already lag their parents in wealth (by 7 percent) at the equivalent age, and "now, stagnant wages, diminishing job opportunities, and lost home values may be merging to paint a vastly different future for Gen X and Gen Y," Eugene Steuerle and three coauthors concluded. "Despite their relative youth, they may not be able to make up the lost ground."

Under Obama's budget, total tax rates for the rich -- and, really, for the entire country -- would likely hit their highest levels in about 40 years. After raising taxes in the Affordable Care Act, and raising rates on household income over $450,000 after we jumped the fiscal cliff, the president has proposed a budget that would continue to push taxes up on the richest families by limiting their deductions.

The piece I wrote yesterday about the trajectory of taxes drew a lot of questions in the comment section. Let me try to clear some of them up here.

First, let's look at the history of effective tax rates -- that's income taxes, payroll taxes, excise taxes, corporate taxes, the whole shebang -- for the top 1 percent; the top 5 percent (minus the very top percentile); and the total country. This graph is borne from CBO data you can play with here:

The biggest story is that total tax rates have fallen for everybody since the late 1970s, because, as you know, we kept cutting taxes. The second biggest story is that those tax cuts were offset slightly by income gains, as families got richer during good times (mostly the 1990s) and passed into higher tax brackets. Third, note that the first Reagan tax cut, coinciding with a recession, collapsed rates dramatically at the top; Bush I and Clinton raised taxes on the rich to help close the deficit in the early 1990s.

Still with me? Okay, this is where things get a little wonky.

To show you THE FUTURE of taxes, I'm about to show you graphs using data from the Tax Policy Center. But the graphs above came from the Congressional Budget Office, which uses a different calculation for income. Is it totally 100% kosher to switch data sets from CBO to TPC? No. The following analysis is not 100% Kosher. But, like eating ricec akes five days after Passover, it is very close.

Let me show you exactly how close. The difference between effective federal tax rates between CBO and TPC in their overlapping years -- 2004 through 2009 -- is about 1 percentage point or less. In light red, TPC estimates higher taxes for the rich and overall. In the deep red, CBO data estimated higher taxes for the lowest income.

Understanding that we're working with imperfect data, let's gaze upon the past and future of effective federal tax rates on the rich. Here it is, from 1979 to 2003 (CBO data) with projections through 2023 (TPC data).

This graph isn't written in stone. It's divined from a White House budget, which means it might as well be written in wet clay. With crayons and dreams. Republicans are steadfast against raising taxes, and Democrats don't seem jazzed to fight for another tax hike in a still-weak economy with immigration and gun control crowding out the budget for playing time.

But even if the graph isn't a picture of the future, it is a picture of something very much like the future.

The tax code is getting more progressive for two reasons. First, the rich are getting richer. The top 20 percent's share grew from 55 percent to 68 percent since 1979. According to research by Emmanuel Saez, income rose 11 percent for the top percentile of earners in the recovery, and approximately 0 percent (or worse) for everybody else.

Second, while the rich earn a bigger share of the economic pie, Washington will continue to need a bigger slice. In the recession, federal revenue as a share of the economy hit a half-century low. In the next ten years, it will need to exceed its half-century average.

Taxes are going up. Probably on everybody. But they'll have to go up the most on the rich because, ultimately, taxation is quite a lot like bank robberies in at least one respect: You have to go where the money is. 

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How young people will supercharge the recovery

Graph shows last three decades in effective federal tax rates (this TPC dataset only goes back through 1979) and ends with the ten-year projection of Obama's budget, in 2023, from TPC estimates. Update: As commenters below rightly note, the graph appears to show a sudden increase in taxes, which is not the case. The X axis skips a decade to end at 2023, the last year estimated by TPC. 

The Tax Policy Center has a new estimate of tax rates under President Obama's budget in the next ten years. What won't surprise you is that taxes are going up -- way, way up -- on the richest percentile. What might surprise you is that taxes are also going up on just about everybody else, too, despite the president's campaign promise to not raise taxes on families making less than $200,000.

Politico and other publications are making a lot of hay about these higher middle-class taxes, which mostly come from cigarette taxes and a new inflation measure called chained-CPI. But when you dig into the numbers, it's not really a middle-class tax "hit" so much as a very light tap.

Families making between $50,000 and $75,000 would see an average federal tax hike of $63. That's a cheap dinner for four at Applebee's. Families making between $100K-$200K would pay an extra $150 per year. That's a cheap dinner for four at the Palm. That's not not money. It's definitely money! And in the aggregate, it adds up. But, c'mon, are we really going to make a big deal about an extra $12/month in federal taxes for couples making $180,000?

The real story here is that Obama's tax plan is both aggressive and progressive. [See update under the graph above.] Total effective tax rates, which hit a 30-year low of 17% in 2009, are on track to break 24% in 2023. That would be the highest share of the U.S. economy going to Washington since the 1970s. Most of that burden would fall on families making more than $400,000 a year, who saw both a tax rate increase in January and face a tax deduction cap in the new budget.

Here's the graph of each quintile's rising effective tax rate (I'm comparing to 2007 because emergency tax credits passed to fight the recession in 2008/9 make the comparison look too stark) ...

... and here's a look at rising tax rates on the highest earners.

The takeaway here is fairly clear. Taxes are going up on everybody, a little. As well they should, given the growth in projected Social Security and health spending. But they're really going up on the very richest -- who are making more and more of total income, anyway.

Don't let the "middle class tax hit!" articles distract you from the big picture here, which is that Obama's tax plan is, in a nutshell: Everybody pays a little more + rich pay a lot more = modern historical high in effective federal taxes.

Netflix's grand strategy -- Step 1: Buy original content; Step 2: Add subscribers; Step 3: Profit -- is going just as planned.

The company added more than 3 million subscribers (2 million in the U.S.) last quarter, which, at $7.99 per subscription, means revenue nearly equaled the full price of the $100 million "House of Cards" series that debuted early this year.

Did "House of Cards" lure 2 million more people, alone? No. We don't know how many Netflix subscribers watched the series, and we certainly don't know what share of the new subs joined just specifically because of the Kevin Spacey vehicle.

So what did "House of Cards" really buy? Allegiance. Nearly 90 percent of Netflix subscribers said "House of Cards" made them less likely to cancel, according to a survey by Cowen and Co. But here's what "House of Cards" doesn't get Netflix: the right to raise prices. Two-thirds of subscribers said they'd bolt Netflix if they raised the monthly price.

Netflix epic win this month is great news for Netflix shareholders and great news TV lovers everywhere. If you like expensive, high-quality TV, you should root for Netflix and Amazon and Hulu and HBO to go after each other for exclusive rights for content. It means more wholesale demand for great television. It means better incentives for Hollywood's stars to become executive producers and showrunners. It means more great television.

But I'm not yet convinced that Netflix has a clear long-term advantage over its top competitors -- particularly Amazon Prime and cable (+HBO). First, nobody has more good will from public investors than Amazon, where CEO Jeff Bezos has trained the stock market to accept zero profits forever, since the company is viewed as a terrifying quasi-monopoly in e-commerce. This gives him a dangerous license to spend with abandon on TV licensing deals.

Second, even though Netflix is successfully setting itself up as a competitor to HBO, it's still a complement to, not a substitute for, the behemoth of the cable bundle, because it doesn't have the keystone that holds the whole thing together: live sports.

For years, some TV watchers have predicted the demise of the traditional television business. The irony is that, even in a weak economy, what we're seeing today is the proliferation of the traditional television business of paid subscriptions. Multi-channel video subs are holding steady -- and HBO/Showtime subs are growing -- while Netflix screams toward 30 million American subscribers, and Amazon and Hulu Plus continue to grow.

For a country that apparently doesn't want to pay more for television, we're doing a pretty pitiful job at it.

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Entrepreneurship is a bit like white blood cells. It's a good thing, of course, and something we need. But more of it isn't necessarily good news. It fact, heightened levels of it can be a sign that something is wrong.

Take New Orleans, for example, where per capita start-ups have shot up since Katrina. A resurgent economy needs younger talent, but this is also a sign of a broken city with more cultural appeal than business opportunities, which has forced new residents to start their own companies rather than join existing, thriving enterprises.

In the U.S., start-up-rates perked up after the recession (see chart at the top) and then fallen fast. National media made something of a fetish of entrepreneurs, since this uptick corresponded with a ostensible golden age in Silicon Valley start ups. But many of them were reluctant entrepreneurs, or last-resort entrepreneurs. They weren't starting a company just because they had a great idea. They were starting a "company" because it was an alternative to fruitlessly emailing human resources departments all afternoon.

"It's likely not a coincidence that the number of new businesses created dropped when the economy improved last year," said Dane Stangler, director of research at the Kauffman Foundation. "While a stronger economy is good for business growth, it also means the unemployed find jobs instead of starting firms."

This isn't a new trend. A historical study out of the University of California and RAND found that higher local unemployment rates consistently predicted higher rates of start-ups -- especially sole proprietorships and other firms that never grew beyond one person.

The sort of start-ups that an economy wants -- and that people like Steve Case rightly praise -- are the kind with ramp-up potential. With multinational corporations mostly expanding their hiring abroad, the burden falls to fast-growing start-ups in competitive sectors to support local job creation. In the data, an out-of-work dad who starts a one-man-operation to sell his welding skills might look as entrepreneurial as two in-demand software engineers with huge potential to scale their smartphone app. We want less of the first, more of the second.

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Recoveries are powered by two things. Houses and cars. And young people aren't buying either.

That's the conclusion from a new study out of the New York Fed, via Brad Plumer, that can be easily read as blaming student debt for holding back the recovery by squashing home and auto sales.

The share of 30-year-olds with student debt who have taken out a mortgage has collapsed since the recession struck (ditto those without student debt).

And the share of 25-year-olds with student debt who also have an auto loan has fallen since the crash, as well (ditto again those without student debt).

This study seems to feed into a familiarly scary story about student debt as a dangerous bubble that is piling unprecedented levels of debt on young people, and is wrecking the economy by preventing them from starting their lives.

There's two problems with that story. First, as Jordan Weissmann and I wrote for The Atlantic, there are so many reasons that cars and houses are falling out of favor with young people beyond student loans (and even beyond the miserable economy) that it's impossible to pick a single culprit. For example, companies like Ford are vocally worried that smartphones are replacing cars as symbols of grown-up sociability, and young people are bunching in urban and urban-lite areas with many apartments and good public transit.

Second, it's a myth that college graduates have more debt than they used to. In fact, they have less. Total debt for 20-somethings has fallen since its peak in 2008, as it has for every age group in this period of deleveraging. Families that feasted on credit in the last decade have spent the last few years paying back what they owe and cutting back their excessive spending. Young people, with and without student loans, have done the very same.

Average debt among twentysomethings is at its lowest since 1995, according to a recent Pew Research Center report. More than a fifth of young households in 2010 didn't have any debt at all -- the lowest in 30 years.

What's really changed is what kind of debt they have. Young people have swapped student loans for mortgage and auto loans. They've traded cars for college and homes for homework.

And that's okay! Compared to cars and houses, higher education is a much safer investment. For all the media criticism about college losing its luster, you could make a good argument that it's never been more important. While the returns to college have flattened recently, wage growth has been even weaker (or negative) among non-college grads. As a result, the "bonus" that young workers get from going to college, which economists call, the "college premium," has tripled in the last 30 years. Today, the share of the 18-24-year-old population enrolled in school is at an all-time high 45 percent today.

I tend to regard the most educated generation in American history as good news, but even good news has its downsides. The downside here is that millions of young people invested in their human capital during a period of overall deleveraging. Little was left over for cars and houses. And the twin engines of the consumer economy were starved for fresh fuel.

Meta Brown and Sydnee Caldwell, the authors of the New York Fed study, end on a pessimistic note ...

While highly skilled young workers have traditionally provided a vital influx of new, affluent consumers to U.S. housing and auto markets, unprecedented student debt may dampen their influence in today's marketplace.

... but here's a more optimistic read. With youth unemployment kissing 18 percent through 2010, more young American realized that the opportunity cost of leaving the labor force to go to school had never been lower. They wouldn't have bought homes, anyway. They wouldn't have bought cars, anyway. The economy was too rotten. So for many of them, the choice wasn't been a four-bedroom house and four more years of school. It was between school and underemployment. They chose wisely.

So, optimistically, today's debt swap could work like a reverse-stimulus, sucking energy from the economy in the short-term but empowering our labor force in the long-term when, eventually, some of these students will get married, buy a house, and put some wheels in their garage, having invested in their education before they took out their first car loan.

It's not fair to blame Rogoff and Reinhart for the austerity craze that has gripped Europe. It is fair to say that their presentation of flawed data about the last half-century of growth and debt was used as intellectual ammunition in a total war on deficits that has destroyed families across the continent.

In Greece, the fog of austerity is more than a metaphor. This winter, a very real cloud of smoke haunted the city at night, as families burned felled trees and broken chairs to stay warm. While the economy has shrunk by a fifth and youth unemployment has screamed past 50 percent, the real tragedy can't really be told with numbers. It's simple, really. Children are starving.

The New York Times reports the heart-breaking details:

"He had eaten almost nothing at home," Mr. Nikas said, sitting in his cramped school office near the port of Piraeus, a working-class suburb of Athens, as the sound of a jump rope skittered across the playground. He confronted Pantelis's parents, who were ashamed and embarrassed but admitted that they had not been able to find work for months. Their savings were gone, and they were living on rations of pasta and ketchup.

The euro was supposed to tie Europe together as a single unified economic powerhouse. When Greek children go malnourished while unemployment falls in Germany, you can see very clearly that unity is just another European myth. In the United States, we have an answer for weak state economies. It's called Mississippi. They get a permanent "bail out" through an annual transfer of money: tax credits, Medicaid spending, infrastructure assistance, and so on. In Europe, the answer for failing state economies is: You get this bag of money if you take the following measures to destroy your economy.

You don't need to know how to fact-check Harvard economists to understand a simple truth: Force-feeding austerity to a country starving for money and growth will only get you more starvation.

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A fire at a fertilizer plant in West, Texas, 20 miles north of Waco, led to a violent explosion with multiple reported casualties this evening.

"It was a small fire and then water got sprayed the ammonia nitrate, and it exploded just like the Oklahoma City bomb," Jason Shelton, a hotel clerk, told Dallas Morning News. "I live about a thousand feet from it and it blew my screen door off and my back windows. There's houses leveled that were right next to it. We've got people injured and possibly dead."

This video, via the New York Times' Brian Stelter, is going viral on Twitter, as it appears to show the dramatic explosion about 30 seconds in. It's like a horror film.

Somewhat eerily, this was the cover of the New York Times 66 years ago to the day.

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Non-defense discretionary spending. God, what a hideous term. The tip of the tongue takes a trip of ten steps and falls on its face at the -ding. In fact, it's such a revolting sequence of consonants, maybe that explains why politicians think we can cut it to the bone without anybody noticing.

Here is the case for noticing.

When government talks about spending as "investments," they're talking about this category, mostly. NNDS is everything that isn't Medicare, Medicaid, Social Security, defense, and mandatory spending on programs like unemployment benefits. It's everything that is infrastructure, education, training, disaster relief, environmental protections, international affairs, scientific research, and employee salaries.

In other words, it is the bulk of what we have historically called "Government." And in both President Obama and Rep. Paul Ryan's budgets, "Government" gets cut to a historic low as a share of, well, government. Here's the graph of non-defense discretionary spending ("Government") since 1970. After 2013, Obama's budget traces the orange line and Ryan's budget traces the blue line.

In the last half-century, the U.S. government has gradually changed from an investment engine to an insurance company. In 1969, direct payments to individuals and investments (i.e.: education and training, scientific research, and infrastructure) each made up one-third of the federal budget, Ron Brownstein reported. In the last half-century, wars have ended (the defense budget includes investment, too), and infrastructure has languished, while entitlements have grown. Now payments to individuals have doubled their share of the budget to 65 percent. Investments have fallen to 14 percent.

The United States is a rich, aging country. We're acting our age. With growing health care costs, we now spend 2.4X as much on the elderly as on children -- a ratio that isn't out of line with other rich economies. We don't want to cut entitlements for seniors, and we don't want to pay families to accept higher taxes. As a result, government grows while "Government" shrinks.

Yesterday, Nobel Prize-winning economist Joseph Stiglitz visited The Atlantic. I asked him when, if ever, the deficit would be a problem. He rejected the question pretty quickly. "It's not about the size of the deficit," he said, "so much as what you're spending it on. If you're going to create debt, create assets." Create assets.

Insurance is the part of the budget that manages risk and broadly protects us from poverty: poverty from circumstance, poverty from retirement, poverty from medical bankruptcy. Non-defense discretionary spending is the part of the budget that creates assets. Both categories are important. But, squeezed between our promises to seniors and our aversion to taxes, the latter is on track to fall to historic lows, in both the White House budget and the GOP budget. It is very had to win any sort of future with a backsliding investment strategy.

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Multiple explosions disrupted the Boston Marathon near the finish line this afternoon, causing "dozens" of injuries, at least. This Vine video, which appears to be taping the NBC affiliate in Boston, shows the very moment of the explosion.

Update: Here is a longer video, captured by Boston.com. Read more at The Atlantic Wire.

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Sorry, but we love taxes at The Atlantic. Actually, we're not sorry. Taxes represent perhaps the clearest illustration of American values; the relationship of citizens to their government; and the way we award the behavior we like and discourage the behavior we don't.

Many people don't share our enthusiasm. After all, taxes are complicated. There are lots of numbers, too. But that's where graphs help answer the biggest questions: Where do our tax dollars come from? Where do they go? Who pays how much? How has it changed over time?

You've got good questions. We've got good graphs. Happy Tax Day. [This article adapted from a 2012 story.]

Where do our federal taxes come from? Washington has two main sources of revenue, which together account for 80 percent of all federal income: (1) payroll taxes, which are split between employers and employees to fund programs like Social Security, and (2) income taxes, which you're all too familiar with now that it's the middle of April. [Historical graph via Tax Policy Center]

Where do our federal taxes go? Almost entirely to insurance and security. Medical insurance, health spending, Social Security, income security, veterans retirement security, and security security (i.e.: defense) accounts for about 83 percent of government spending [Heritage].

Can you show me a more detailed graph of where our taxes go? Okay, here. [CBPP]

We also pay state and local taxes. Where do those tax dollars go? Mostly to education and Medicaid. [CBPP]

How have the two stories above -- total (federal, state, and local) government tax revenue and total government spending -- changed over time? Both have increased, particularly between the 1930s, with the creation of Social Security, and the late 1970s, with the creation of Medicare and Medicaid. U.S. spending in the 20th century was exquisitely sensitive to the bellicosity of European countries. Of note: We spent near an all-time high in total government after the recession, as a share of GDP, but taxes are still below their all-time low. [TPC data]

Are we paying more in federal taxes than we used to? Nope. Every income group is paying a smaller share of their income to the government than we were in the late 1970s. [TPC]

How will the president's new tax law change that? Mostly, it will raise taxes on the rich. Income under $108,000, which briefly enjoyed a payroll tax break, is now taxed fully for Social Security. This raised taxes for all income groups by a couple hundred to a thousand dollars.

Who pays taxes? It's commonly said that half of Americans don't pay taxes. That's wrong. While it's true that around 50% of families don't pay a positive federal income tax, remember than an equal share of government revenue comes from payroll taxes, and most families also pay state and local taxes. Practically all earners in their prime working years pay a total federal tax. [Hamilton Project]

Who pays taxes, by age? After about 60, the share of Americans paying taxes falls dramatically.

Who pays no federal income taxes? Basically, the poor. About 80 percent of the households not owing federal income tax earn less than $30,000 a year. Since 2000, the poorest 40% of households have averaged a federal income tax rate below zero.  [The Atlantic]

Are federal taxes progressive? Yes. The top 1% pays more federal taxes than the bottom 60% combined. They also make more than the bottom 40% combined. [Numbers along the X-axis correspond to quintiles of earners.]

Are state and local taxes progressive? Much less so. [Wonkblog]

Are total taxes progressive? They are. The poorest 40 percent pay a disproportionately small share of their income in taxes. The top 1% account for a larger share of total taxes than total income. That's what a progressive tax system looks like. But this chart should dispel the myth that the poor don't pay taxes, at all. [CTJ]

Do Americans pay a lot of taxes? The U.S. ranks in the bottom five among OECD countries in total government revenue as a share of GDP. We're just above South Korea and Turkey. We tax less than Australia, Canada, and just about every country in Europe. [The Economist]

One hundred years ago, the typical American family spent half its income on food and clothes. Today, thanks to massive gains in productivity in agriculture and manufacturing, we spend hardly a fifth of our budget clothing and feeding ourselves. But there is one group of Americans that still insists on spending about half its hard-earned cash on eating and buying nice clothes. It's teenagers.

Here's the graph breaking down the typical teen's spending, from a report by Piper Jaffray:

Compare that to the typical budget of a middle-class family (which kindly provides teenagers with much of their cash):

The president's budget doesn't cut entitlements enough. That's been the unison response from Republicans since Obama released his plan yesterday. A brief sampling:

• Here's Sen. Mitch McConnell: "If the president believes these modest entitlement savings are needed to help shore up these programs, there's no reason they should be held hostage for more tax hikes."
  
• Here's Sen. Mike Johanns. "I don't believe the budget proposal went far enough."
  
• Here's Sen. Saxby Chambliss: "It is nowhere near what we need to do." 
• And here's Paul Ryan to ABC News: "I don't know if I would say that he cracked the door on entitlement reform. He has proposed to change a statistic, which saves money. That is really not entitlement reform."

From these quotes, it's easy to get the impression that the president hasn't met Republicans half-way with his cuts to Medicare and Social Security, the two biggest entitlement programs. In fact, he's exceeded them. The president's budget would spend less on both Medicare and Social Security than Ryan's GOP plan over the next ten years.

On Social Security: Ryan didn't cut Social Security by a penny. The president has proposed cutting the program's spending by $130 billion, by adopting a slower-growing measure of inflation.

On Medicare: Ryan's budget kept Obamacare's Medicare cuts and added another $127 billion. His budget projects $6.74 trillion in Medicare spending between 2014 and 2023. Obama cuts even deeper with $380 billion in cuts below his baseline, and his budget projects $6.67 trillion in Medicare spending over the same period. Upshot: Obama's ten-year Medicare budget is $70 billion below the GOP, and his announced cuts are about $250 billion deeper than the GOP. (See below for brief explainer on differences.*)

In fact, as Michael Linden at the Center for American Progress (who helped me with many of these numbers), pointed out, Obama's new proposal would mean about $1 trillion in lower Medicare spending in this decade compared to projections from before he took office. That includes the effects of slowing health-care inflation after the Great Recession. That's a 13 percent reduction!

Two questions I can anticipate.

(1) If the GOP isn't cutting Social Security and Medicare (and they're certainly not cutting defense), what are they cutting? Everything else, really. Obamacare gets demolished, and Medicaid (which, to be fair, is considered an entitlement), income-support for the poor, and non-defense discretionary all get the guillotine.

(2) Have I forgotten about Ryan's Medicare reforms after 2023? Nope. But I don't understand why, in 2013, it's considered reasonable, brave, or admirable to propose a dramatic and radical Medicare change that won't take effect for another ten years. That's seven years after Obama has left office. It's not for another two presidential election cycles plus another midterm. I'd rather talk about what these budget plans for this year, and this decade.

And here's the bottom line: Obama preserves federal Medicaid spending, he doesn't unwind Obamacare, and he spends much more on mandatory and non-defense discretionary programs than Ryan proposed. But his cuts to Social Security and Medicare combined are somewhere between $200 billion and $380 billion deeper than the GOP budget. On these programs there is no room to "compromise." The president is already to the right of the right.

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* It's hard to compare these numbers perfectly because they're operating off different baselines. The GOP budget uses the CBO baseline. The White House budget uses the OMB baseline. The baselines are close, but there are subtle differences, because not every budget analyst in Washington agrees on the exact same inflation and wage growth projection (which affects Social Security) or health-care cost growth projection, which affects Medicare.

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If the Paul Ryan budget, in nine words, was:

"Save the rich; Forget the poor; Spare the old"

President Obama's budget, in nine words, is:

"Tax the rich; Spare the poor; Remember the young"

The contours of the president's plan will be familiar to budget nerds, because he's been cooking up different styles of the same dish for months now. And there are two sticking points, which will also be familiar to budget nerds, because they're the same old sticking points: Taxes and entitlements. Obama's plan raises taxes on the richest households by $600 billion -- not by raising rates, but instead reducing the deductions these families can take. Second, his plan adopts a new measure for inflation, which would slowly cut Social Security benefits, and it proposes additional cuts to Medicare.

Most Republicans hate the first part. Most Democrats hate the second part. Will this new budget compel both sides to reconsider? Honestly, who knows. 

The Debate About Right-Now: Obama v. Ryan
Rather than predict the future, let's focus on the present cavernous gap between the Obama and Ryan plans. Over the next ten years, Obama is proposing about $46.5 trillion in spending. Ryan is proposing about $41.5 trillion in spending in that span. That $5 trillion gap, as Ezra Klein points out, is the true Colosseum of these budget fights.

The spending gap comes down to the uninsured, the poor, and the young. The Ryan budget accepts the sequester, repeals Obamacare, cuts federal spending to Medicaid, and cuts deep into "other mandatory spending," a catch-all category comprised of mostly (a) cash assistance to veterans, the jobless, and the poor and (b) retirement programs for vets and federal employees.

But there's something else that's gone mostly unreported: It's Ryan's cuts to "non-defense discretionary" spending. That sounds like an awfully unpalatable term. In fact, it's exactly what you probably think of as "government." It's scientific research, housing, international relations, education, public safety, public health, environmental protection, job training. It's the spending that could be conceivably be called investments, because it's spending that could pay off -- in new drugs, smarter kids, better roads, and cleaner skies. Ryan cuts non-defense discretionary's share of the government to a third below its modern low. It's a unambiguous divestment in productive government spending.

Obama sets aside some cuts for for non-defense discretionary, as well. But he also leads with $50 billion for infrastructure projects right away and increases federal spending on pre-K education. "This budget begins the difficult process of reallocating funds from more affluent seniors to lower-income families and their children," said Isabel Sawhill from the Brookings Institution. By cutting Social Security and Medicare, even subtly, while increasing spending on education, even more subtly, Obama's proposal is a small but important shift in spending from the old to the young.

Like the budget or hate the budget, you must acknowledge it represents (another) non-radical attempt from the White House to reduce our deficits -- which are already falling rather swiftly. As the president noted today, we've already signed off on $2.5 trillion in deficit cuts: $1.4 trillion in cuts under the Budget Control Act + $600 billion in new taxes in the fiscal cliff deal + interest savings. (That doesn't include the $1 trillion sequester.) The president is proposing another $1.8 trillion in savings, one-third from higher taxes and the rest from spending cuts.

The Ryan budget was a magical document that reflected a house-of-mirrors version of uber-conservatism. In order to balance the budget -- a dubious goal, since we can (and have) run deficits practically every year since the early 1800s -- Ryan concentrated spending cuts on the uninsured, the unemployed, and the poor. It was like a double-sequester, aimed at the heart of the America's most vulnerable households, paired with a tax plan so outlandish and unspecific, it left $5.7 trillion in tax spending cuts to be made later.

Obama's budget, for all its messy compromises, is at least a document that reflects certain realities of the time, among them: (1) Global capitalism, left to its own devices, is unlikely to help low-income families keep up with rising costs that come from overall productivity growth; (2) our access to medical care is an international embarrassment, and deserves a solution; (3) the deficit is shrinking too fast, not too slow; (4) we really, really, really don't have to balance the budget, ever; (5) it's better to reduce the deficit with spending cuts and tax increases. These are real problems. The president offers acceptable and defensible solutions.

***

It's a truth universally acknowledged in Washington that we don't think enough about the future. Maybe we think too much about it. We debate ten-year budget plans while unemployment lingers. We plan for future balanced budgets when the deficit is already falling, and probably too quickly. We prepare for the problems we think we might have in the future (inflation) while ignoring many of the problems we know we have today (underemployment).

In a city wrapped up in debating the future, Obama's budget does something quietly radical. It lives in reality. And it speaks in the present tense.

The share of adult Americans who have a job (or are looking for a job) has fallen to its lowest point since 1979, hovering around 63 percent.

That means 37 percent of working-age Americans aren't working. What are they doing, instead? Bloomberg Businessweek gives us a snapshot of 2013 with this amazing infographic:

That's the snapshot. But what's the story of how it's changed over time? Why is the participation rate declining? Let's investigate.

First, the very, very big picture. The prime-age participation rate (in GREEN below) has increased since the 1950s, where this graph begins on the left. Overall, Americans are more likely to be working than they were in the early 1970s. That's because more women between the age of 25 and 54 are working (seen in PINK), even though fewer men of that age are working than at any time in the last 60 years (in BLUE).

The big shifts of the last 20 years have been among the youngest and oldest adults. The group with the largest decline in participation has been teenage men. The group with the largest gains in participation have been 60-something women. Here's a look at the big movers between 1990 and 2010.

Why are young people, and especially young men, dropping out of the labor force? As Conor Sen explained for The Atlantic, there are good reasons (e.g.: more of them are going to college) and there are bad reasons (e.g.: more of them are hanging out at home playing video games, waiting for the job market to thaw).

Older people are working more because they can (it's not a factory-and-farm economy any more) and because they must (families don't save much on their own, so many hope to work longer into what used to be retirement). But don't be confused by rates and levels: Older people might be more likely to work than they used to be, but they're still unlikely to be working.

That sounds like an obvious point. But it's a big deal. It explains why an aging country will inevitably work less. Below is a picture of participation rates by age. Imagine a large generation, like the Boomers, moving through this picture, like an elephant through a snake. Their participation will naturally fall off. Each year after their mid-50s, the cohort will be less likely to work.

Indeed, that's precisely what demographers have long predicted: The slow decline of the participation rate from this decade through the 2030s, as the Boomers moved into retirement. Those predictions are represented by the dotted lines below. The red line represents what's actually happened.

This very important picture tells us two things. First, the participation rate was expected to drop, with or without a recession. Second, the drop is happening much faster than we expected. The economy is behaving as though it's 2025 rather than 2013. What pushed the participation rate down prematurely?

The obvious answer is that the recession happened. The recession effect on participation rates is pretty clear when you zoom in on the data. The participation rate for both black men and white men over 20 years old has dropped 4 to 5 percent since the recession struck; for women, the drop has been about 2.5 percent.

But the recession's effect is more complicated than you might think. According to a new paper by Kerwin Kofi Charles, Erik Hurst, and  Matthew J. Notowidigdo, what we're really seeing is the decline of manufacturing, which is only being felt now because the band-aid provided by a temporary construction bubble was ripped clean off the labor market. Nearly 40 percent of the increase in non-working Americans between 2000 and 2011 "can be attributed to manufacturing decline," they wrote. The housing boom shifted some of these jobs to construction. But after the bust, the crutch was gone -- and so were the workers.

***

It's about time for an upshot. So, where did all the workers go? Four answers, in order of importance.

(1) They retired. The country is getting older, and older countries have a smaller share of workers. 

(2) They went to school. More young people are going to college, and young people in college are less likely to look for work.

(3) They just stayed home -- they stopped looking for work and decided instead to raise their kids; they sat on the couch waiting for the market to thaw; they filed for disability insurance. The recession discouraged them from seeking a job.

(4) And the factories closed. Behind all of these stories lurks the long decline of manufacturing, which has very little to do with the Great Recession, or college attendance, or demographics, but nonetheless explains a significant portion of falling participation rates among prime-age workers.

So there you have it, the answer to the 37 percent mystery in five words: Retirement, college, recession, and manufacturing.

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In the wrinkled edifices of the French Quarter and the worn-out storefront walls along Canal Street, a legacy of decay in New Orleans intrudes on the mossy city. It is a sense of things that have nearly fallen apart and stayed nearly-fallen-apart for decades.

For much of the last 20 years, the city was wilting in plain sight. In the 1990s, a period during which the U.S. added 21 million jobs, New Orleans didn't just lose jobs; it also lost people. With tourism filling the void left by manufacturing, wages fell way behind the national average. It was place to bring a bachelor party, but not a bachelor's degree, and certainly not a business.

And then, in 2005, Hurricane Katrina hit.

Days later, 80 percent of New Orleans was underwater. More than 1,200 people were dead. In a year, the city lost more than 90,000 jobs -- more than the number employed by the local education, transportation, and manufacturing sectors, combined -- and $3 billion in wages disappeared. A city already in decline had suffered perhaps the worst natural disaster in American history.

***

There are three ways things could have gone.

In the first story, New Orleans slides into its own wet grave, another urban tragedy of geography and economics. In the second story, New Orleans rebuilds itself as it was before -- a sleepy southern belle of a town serving up wet weekends of intemperance. In the third story, Hurricane Katrina somehow kickstarts an age of innovation and an economic renaissance in a city written off for dead.

The Big Easy has chosen the third path -- the hard path, and their struggle has revealed both the tantalizing allure, and the deep challenges, of reinventing a city.

'To Hell With It, We're Going Home'

Kenneth Purcell is evangelical about New Orleans. This makes him more or less like every other person you meet in New Orleans.

When Hurricane Katrina struck, the tech entrepreneur with shoulder-length hair watched from a high rise on Lafayette Square as the water overcame the streets. "Like every other good redneck, I said 'I'm not leaving,'" he told me.

Ten days later, he left.

Purcell moved his budding start-up to New York, where he stayed for the next two years building iSeatz,com, a service that lets shoppers book multiple travel arrangements on one website. But in the undertow of national fatalism about the city's future, Purcell found himself pulled back home. He wanted to prove a point, to make a stand.

"I got so pissed off at the headlines about the city, with company after company leaving, that I said, 'To hell with it, we're going home,'" he told me just blocks from Lafayette Square, at New Orleans Entrepreneur Week (I attended and spoke at the conference last month). "And it was the best decision I ever made."

iSeatz has grown its platform from $8 million in gross bookings in 2005 to $2 billion in 2013. It's clearly one of the city's biggest homegrown tech breakthroughs. Then again, it is also one of the city's only homegrown tech breakthroughs.

Purcell is a member of New Orleans' boomerang generation -- a group of proud, young- to middle-aged reformers who came back to New Orleans in the wake of Katrina to find the city flattened. The city didn't have the jobs they wanted. So they built their own. After 2005, the start-up rate in New Orleans doubled in just three years (this graph, and others, comes from data provided Greater New Orleans Community Data Center).

New Orleans needs more than start-up enthusiasm. It needs start-up success stories. Breakout success stories.

"How do we get from this nascent state of having a lot of bubbling petri dishes to seeing some things really culture out, and having a sustainable ecosystem to support them?" Purcell said. In other words, how does New Orleans, a great city to get away from business, become a great place to start one?

How to Build a City

Jean-Baptiste Le Moyne de Bienville was drawn to the crescent city in the crook of the Mississippi River in 1718. He mistakenly believed the land, most of which is under sea level, to be properly shielded from the stormy Gulf tides. "Paris on a swamp." It was a good elevator pitch.

Nature's feedback was harsh. Four years after La Nouvelle-Orleans was founded, an inauspicious hurricane destroyed every home, shop, and makeshift chapel. A reasonable person might have relocated. Instead, Bienville rebuilt. One hundred years later, New Orleans was the largest city in the south.

The history of New Orleans is that of a city always rebuilding itself. But unlike past efforts, the current makeover isn't funded by on an economy of sugar or oil, but rather an economy of people and ideas.

When you cast your eye across the country's leading high-tech cities -- the San Francisco area, Seattle, Boston, Washington, D.C., and New York -- a rough blueprint emerges. These are large, dense, mixing-pots of people and businesses.

All five regions have a long history of government investment, especially in science and technology. All five have built clusters of commercial activity, ranging from apps and airplanes to government and software. All five have national universities that provide a steady stream of talent and research that can be injected into companies. All five are home to companies and organizations--Google, McKinsey, Congress--that serve as national talent magnets for young people with degrees from prestigious universities.

New Orleans has some of this. There is Tulane University. There are the energy companies. There are the studio outposts that lend it the name "Hollywood South." And, unlike the country's richest cities, New Orleans has cheap living costs to attract graduates with debt. But on the high-tech radar for young graduates, New Orleans registers faintly. When the Martin Prosperity Institute, led by Atlantic senior editor Richard Florida, ranked the 20 leading high-tech metros, New Orleans didn't place. Huntsville, Alabama -- home to NASA's Marshall Space Flight Center and the United States Army Aviation and Missile Command -- finished 15th.

New Orleans is one of the great cultural brands in American cities with a rich history of art, music, and food. But it is not one of the country's great business brands. It doesn't have a rich history of Fortune 500 companies or national media-darling start-ups. The term "Silicon Bayou" exists, but the term is more hopeful than descriptive. Currently, the city's economy would be better suited to mining silicon than manipulating microprocessors. When you compare New Orleans and, say, San Jose the cities could not be more different by industry specialization. San Jose has 96 percent fewer mining jobs than the average city. New Orleans has 240 percent more. San Jose's share of information workers is three-times the national average; New Orleans is still below average.

So why are some investors so optimistic about New Orleans?

First, the price is right. "It is massively cheaper to do a start-up in New Orleans," said Jim Coulter, the co-founder of the private equity firm TPG Capital. "The cost of living, of labor, and of office space, is much lower." And then there are the tax incentives. One particular tax credit, which covers 25 percent of companies' production costs and 35 percent of payroll expenses for local employees, has been credited with growing the city's tech jobs by 19% between Katrina and 2012, six-times the national rate.

The flip-side of cheap labor is a dearth of tech talent. "There is a definitive hiring challenge here," Purcell said. "[Hiring] quickly is hard. Looking for developers is hard all over the country, but we have a steeper climb here."

But there's something else New Orleans has. Katrina has been a surprising force for renewal. The storm demolished the city's storefronts, infrastructure, and tax revenue. But it also shuffled some of the old order in New Orleans in ways that give it a unique advantage.

'The Perfect Proving Ground for Education Start-Ups'
It would be wrong to say the hurricane destroyed New Orleans public schools, because there was so little worth saving even before the storm hit. Orleans Parish was the second-worst-performing school district in the state, plagued by an abysmal drop-out rate.

Demolishing the city's schools, the storm inspired an start-up mindset in the parish that has created perhaps the most-watched petri dish of education reform in the country. Today, there is no major city where a majority of public school students are in charter schools -- except New Orleans.

Before the hurricane, fewer than 30 percent of New Orleans students were in passing schools, according to Alison Plyer of the Greater New Orleans Community Data Center. Now it's 68 percent. "There's been a concentrated effort by the entire community to improve the schools," she said, "led by charters and Teach for America."

One of the city's new experiments is Kickboard, an analytics program that visually tracks student progress. CEO and founder Jennifer Medbery was a Columbia graduate with a degree in computer science, teaching math in public schools for years, grumbling that there was no way to crunch the data she was gathering from students. "Each week we spent hours trying to organize it all with a homegrown maze of Excel spreadsheets and Google Docs," she said to me in an email. In February, the company raised $2 million in funding.

The recovery in New Orleans has let ed-tech start-ups partner directly with schools in a way that would be impossible if the calcified public school bureaucracies hadn't been knocked down by the hurricane. "Because of the charter schools, you have fast adopters of new ed-tech tools in the area. This is important because [as an entrepreneur] you want to be close to a market of adopters."

It'd be easy to assume the explosion of entrepreneurial activity was merely born of necessity. But it was about "more than just rebuilding the city," Medbery said. "It was about re-imaging it as a place for big ideas."

Gary Solomon, Jr., had a big idea, too, he just didn't know where to take it. Born in New Orleans, he studied lighting design at NYU in order to work on Broadway. But after Katrina, "there was a calling to come back home," he said.

"There was no industry here [in New Orleans] for what I do," he told me. "Our opportunity was to create it." So he teamed up with two unlikely partners: Steve Fink, the longtime production manager at the Superdome, and Jonathan Foucheaux, an entertainment tech wiz from Six Flags Theme Parks.

In 2009, the company, called Solomon Group, had three employees. Today, they have a staff of more than 100, with eight figures of revenue. They've designed complex installations for museums and arena-sized events. The exterior lights of the Superdome? They designed that. When CBS hosted the Super Bowl here this year, the network shot from ten "broadcast environments" throughout the city. Solomon Group built eight of the ten.

"While New Orleans has an awesome foundation and history and way of doing things, this feels like the first time the old guard has been willing to listen to new ideas," Solomon said. "Pre-Katrina there was no changing anything that had been done for 100-plus years. I don't feel like we're fighting anymore. There is a desire to change and do new things."

More Than 'Most-Improved'
Twelve years ago, a group of New Orleans-born tech guys met at Loa Bar, just off Canal Street, to share war stories and gripe about the decline of the city. They wanted New Orleans to be a place where entrepreneurs would flock. That boozy meeting led to the creation of a non-profit, the Idea Village, which has tirelessly lobbied the city to support start-ups. It has fought through bureaucracies and hurricanes and a Gulf oil spill to build Entrepreneur Season, a nine-month annual program to support new start-ups. The capstone Entrepreneur Week conference last month ended with 1,700-person vote for start-up of the year, the largest crowd-sourced investor pitch in the country. It was literally a street party. Kind of like a Start-Up Mardi Gras.

If New Orleans has a competitive advantage, this is it: A reputation for fun, along with a culture of engagement and a civic awareness sharpened by recent tragedy. Organizations like the Idea Village will be pivotal to building a city culture that celebrates and encourage entrepreneurs, who are, by their nature, ambition yet alone, independent-minded and dependent on the support of others.

In the last five years, the city has won an astounding number of city awards, but many of them are a variation on the "most improved player" theme. In 2011, the Wall Street Journal named it the most improved metro. Forbes has dubbed it the Number-1 metro for IT job growth. CareerBuilding said it had the third-fastest wage growth in the country. Just last week, the Brookings Metropolitan Policy program named it the number one recovery city in the country. But since Brookings measured growth compared with the aftermath of Katrina, this is as much recognition of how far New Orleans has come as it is recognition of how far New Orleans had fallen.

After losing up to 10 percent of its population, New Orleans is growing again. The parish ranks behind only Austin and suburban Washington, D.C., as the fastest-growing large counties in the U.S. As the people have returned, the number of blighted homes has fallen by more than half since 2008. Crime is falling, and the share of bachelor's degrees is rising. 

But there is no getting around this central fact: The city isn't merely miles behind San Jose and Austin in attracting the nation's top talent. It's behind the national average. The share of New Orleans young adults with a bachelor's degree has increased from 23 to 26 percent since 2000. That's not just below the average city, but also it's growing slower than the average city.

New Orleans' most critical challenge in the next five years will be to win the mind-share of young entrepreneurs -- whether by building a city-wide wifi network, hosting a major corporation's bureau, or launching a nationally celebrated consumer-tech company. "For all their individualism, entrepreneurs tend to flock," Jim Coulter said. "There's a network effect. Flocking drives more entrepreneurs. The coffee shops become the discovery points. That's what happened in San Francisco, it's happening in Austin and it's beginning to happen in New Orleans."

Just beginning. Still beginning. Sometimes a start-up city is just a city getting started, again.

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Baseball would appear to be in crisis. Viewership is falling fast, down 30 percent across ESPN, TBS, and Fox since 2007. But those same networks are signing new contracts to pay more than ever for the rights to broadcast baseball games. Why?

As David Bank explained in an RBC note from February, it's "the bulk provided by MLB content" that makes it really valuable.

The bulk?

Here's what he's talking about.

There are more sports channels and hours of sports programming than ever before. More ESPNs, more regional sports networks, and more channels like Fox Sports on the horizon. That is so many hours of sports television, it's mind-blowing. TV programming is expensive. Time is money. How do you fill it?

Enter baseball. There are more than 2,400 games each MLB season, which is more than 7,200 hours of potential live sports, or about 300 full days of baseball. That's a lot of bulk. The kind of bulk that cable companies, who need relatively cheap, but relatively popular, content to fill out their days while they collect the slivers of your monthly cable bill known as affiliate fees. "While baseball may not be the highest-rated sport on average, its content provides ways to justify affiliate fees and to build viewership," Bank writes.

The sheer endlessness of baseball games and the baseball season has been offered as a reason for the sport's decline in the last decade. Its languid pace collides with information inflation, Internet attention disorder, tweeting Millennials, that whole shebang. But the economic paradox of baseball is that the breathtaking volume of the sport is also the foundational source of its value to networks.

The share of American adults who are either working or actively looking for work -- i.e.: the labor force participation rate -- fell to its lowest point since 1979, according to today's jobs report.

If 37 percent of American adults aren't in the labor force, what are they doing?

Bloomberg Businessweek has a beautiful graphical explanation. Click it.

The president has a new budget coming out. The New York Times calls it "a significant shift in fiscal strategy." The Washington Post calls it a "stark shift in strategy." National Journal calls it "a gutsy change in strategy."

Theoretically, one would expect this document to demonstrate some sort of change in strategy.

But does it, really? The full details of the plan have been shared with some congressional leaders, and they don't become public until Wednesday next week. But the blueprint looks remarkably similar to the plans Obama has proposed -- and which subsequently failed to move through Congress.

Here was Obama's last plan. It called for significant health care cuts over the next decade, particularly by reducing payments to drug companies and hospitals. It called for changing the way we measure inflation, which would raise taxes and cut Social Security benefits slowly for some recipients. It called for replacing the sequester. And it called for immediate additional spending, focused on infrastructure.

Here's what we know about the new plan. It calls for health care cuts over the next decade, particularly by reducing payments to hospitals and other "providers." (Check.) It calls for changing the way we measure inflation, which would raise taxes and cut Social Security benefits slowly for some recipients. (Check.) It calls for replacing the sequester. (Check.) And it calls for immediate additional spending, focused on infrastructure and education aid (Check.).

So much for that gutsy changey stuff.

It sounds to me like the new plan will incorporate some of Obama's policies from the State of the Union speech -- like universal pre-K and gun control -- and try to ameliorate some Republicans by asking for slightly less revenue and framing his health care cuts as entitlement reform. But that's not hardly a "significant shift" or "gutsy change" in strategy. It's a subtle shift with a successful re-branding effort.

For months now, Washington moderates have accused the president of failing to LEAD, even as he offers compromise upon compromise to Republicans who steadfastly say they that more revenue increases are off the table (while Democrats say entitlement reform is off the table without significantly more revenue). If public perception is the better part of leadership, then perhaps today's messaging war from the White House will have its intended effect, and Republicans will move to the left on taxes. Or else, we might even hold out hope that Washington reporters might suddenly decide that Obama, having given them the budget they want with the messaging they prefer, is no longer the goat of these budget negotiations. I wouldn't bet on it. For journalists to break free of the Washington tradition of blame-both-sides false equivalence would be a truly gutsy change in strategy.

___

Update: I see Jon Chait made many of these points well earlier today.