Debate Reaction

The final debate came and went last night and if you follow me on my twitter, you saw absolutely nothing from me on it. Why? A couple of reasons:

First off, I had the luxury of watching with my class of students with none other than Karl Rove. He debated Howard Dean earlier during the day at Duke and stuck around to watch the debate with us. Of course, we were all focused on the actual debate but it was still very cool to be sitting just a few feet away from him during it.

But, plenty of my classmates were on Twitter during it and Rove was as well. I chose to stay off because I wanted to judge it without the nonsense of Twitter. I thought last night was particularly partisan. The first debate Romney clearly won in a landslide. Obama won the second by a little. But throughout last night’s debate and afterwards, any Democrat or left-leaning journalist I follow seemed to think Obama dominated and any Republican or right-leaning journalist thought Romney dominated. It was split decisively along party lines. It was quickly clear to me that I wasn’t going to get much from reading Twitter and I certainly wasn’t going to add anything to the discussion as well. So I stayed away and I’m glad I did so. It actually felt kind of nice to watch the debate away from social media (mostly – I snuck a peek every once in a while).

President Obama and Mitt Romney during their third and final presidential debate.

As for my thoughts on the debate, I thought it was a dead draw. Obama responded well on Israel/Iran while Romney seemed to do better on China (something that infuriates me – more on that later). I thought the rest of the issues were about even. The polling after the debate seemed to show a Obama victory, but remember my way of judging the debates: the winner is the person who convinces voters to vote for him.

Here are the snap polls:

CNN

Who won the debate? Obama 48%, Romney 40%

Who are you more likely to vote for? Unchanged 50%, Romney 25%, Obama 24%

Public Policy Polling

Who won the debate? Obama 53%, Romney 42%

Are you more or less likely to vote for President Obama?

More likely 37%
Less likely 31%
Unchanged 30%

Are you more or less likely to vote for Governor Romney?

More likely 38%
Less likely 35%
Unchanged 26%

CBS News

Who won the debate? Obama 53%, Romney 23%, Tie 24%

Once again, CBS annoys me and doesn’t have any more info on their polls (or if they do, someone please point it out to me). As for the CNN and PPP poll, clearly it was about a draw. The PPP poll actually shows Romney with an advantage among independents. Thirty-two percent of independents said they were more likely to vote for Obama after the debate while 47% said they were less likely. In contrast, 47% of independents said they were more likely to vote for Romney afterwards with 35% saying they were less likely.

Some numbers point towards Obama, some towards Romney and my gut reaction was a tie. Thus, I’m going to call it a tie until I see further polling. We (and by we, I mean Nate Silver) will have plenty of polls to sort through during the next two weeks. (Image via)

It’s Immoral NOT to Spend Money on Infrastructure Now

Here’s Mitt Romney on reducing the deficit from the debate last night:

I think it’s not just an economic issue, I think it’s a moral issue. I think it’s, frankly, not moral for my generation to keep spending massively more than we take in, knowing those burdens are going to be passed on to the next generation and they’re going to be paying the interest and the principal all their lives.

And the amount of debt we’re adding, at a trillion a year, is simply not moral.

President Obama didn’t object to this at all and instead demonstrated a commitment to reducing the deficit. They’re both wrong.

We need to spend a lot of money rebuilding our infrastructure across the country – $2 trillion in total. If we put it off, the next generation will have to pay for it. If we do it now, the next generation will have to pay for it too. Our deficits aren’t going down over night and the next generation is inevitable going to either face higher taxes or reduced spending on programs. Either way, the next generation will have to pay to redo our decaying infrastructure. But, they’ll pay less if we do it now.

Here’s why:

We have to repair our infrastructure soon.

Right now, the rate on U.S. Treasuries is really low. So low, in fact, that when you account for inflation, people are actually paying us to keep their money. The current rate for a 1-year Treasury is 0.18%. That means that if you buy a 1-year Treasury at a $100 face value, the U.S. will take the $100 now and pay you $100.18 next year. But that $100.18 really is worth less than that because a year has passed and its purchasing power has decreased because of inflation. The current CPI, the most commonly used measure of inflation, from the Bureau of Labor Statistics is 1.7%. Let’s be generous and call it 1.5%. That $100.18 in 2013 is the equivalent of $98.51 in 2012.

Now, if the U.S. government took $100, held on to it and then gave you back $100.18, that would be dumb. It would lose money there. But, what if the U.S. took that $100 and bought $100 in infrastructure improvements? In a year, those improvements are still worth $100 (2012 dollars). but the government is only paying $98.51 (2012 dollars again). The government just made a profit!

Normally, when the U.S. borrows money, the interest rate is greater than inflation. Imagine if the 1-year Treasury rate was 3%. Now, the U.S. government is paying out $103 in 2013, worth $101.48 in 2012 dollars. In that case, the government loses money.

That’s how the real rate of inflation works. Right now, most U.S. Treasuries have a negative real rate of inflation. In the future, this will almost certainly not be the case. If we delay these infrastructure improvements until the next generation, they will have to pay for them with Treasuries that have a positive real rate of inflation. Instead of profiting on the infrastructure improvements, the next generation will be losing money. But they won’t have a choice. Our roads and bridges will be deteriorating so much that we will have to make those improvements and accept the losses.

By not spending money on infrastructure repairs now, we are making the next generation spend more. That’s what is really immoral. (Image via)