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This is not a very impressive interview Sen. Rand Paul conducted with Bloomberg Businessweek's Josh Green.

For instance:

A recent article in the New Republic said your budget would eviscerate the departments of Energy, State, Commerce, EPA, FDA, Education, and many others. Would Americans support that?

My budget is similar to the Penny Plan, which cuts 1 percent a year for five or six years and balances the budget. Many Americans who have suffered during a recession have had to cut their spending 1 percent, and they didn’t like doing it, but they were able to do it to get their family’s finances back in order. I see no reason why government can’t cut 1 percent of its spending.

So that's not actually an answer. Paul's budget eliminates the Department of Commerce. It also eliminates the Department of Education. And the Department for Housing and Urban Development. And the Department of Energy. The State Department gets cut by more than 50 percent.

Rand Paul. (AFP)

Meanwhile, it increases spending on defense by $126 billion.

Perhaps these are good ideas! But Paul doesn't defend them. He obscures them. He tries to make his cuts sound small even though, in the areas Green asked about, they're huge. If Paul has thought these policies through and has a persuasive argument for why the United States would be better off if the Department of Education was eliminated so the Department of Defense can be expanded, he should make his case. That he's instead hiding the reality of his budget's cuts is telling.

But it's possible that Paul himself is simply misinformed about his budget. He certainly seems to be misinformed about the deficit. "What I would say is extreme is a trillion-dollar deficit every year," he tells Green when asked whether the public will accept such deep cuts.

But we're not running trillion-dollar deficits every year -- and nor are Paul's political opponents claiming that we should. The Congressional Budget Office projects this year's deficit  will be $642 billion, and 2015's deficit will be only $378 billion -- and though deficits will rise again as we close out the decade, they won't reach a trillion dollars.

And that's if we do nothing. President Obama's budget is estimated to bring deficits down to $542 billion in 2023.

This isn't just pedantry. The argument behind Ryan's budget is that the cuts need to be so right now because the deficits are so mind-bogglingly large. You have to measure them in the trillions!

But the deficits Paul is estimating are vastly larger than the deficits we actually face. It's almost like the deficits are just an excuse for policies Paul already supports, rather than the cause for policies Paul is only reluctantly embracing.

And then, of course, there's Federal Reserve crankery:

Who would your ideal Fed chairman be?
Hayek would be good, but he’s deceased.

Nondead Fed chairman.
Friedman would probably be pretty good, too, and he’s not an Austrian, but he would be better than what we have.

Dead, too.
Yeah. Let’s just go with dead, because then you probably really wouldn’t have much of a functioning Federal Reserve.

Milton Friedman would be very close to what we have. As Jonathan Chait writes, Friedman's "central academic insight was support for very active monetary policy. He called it 'Monetarism.' Look it up!"

If anything, there's a good argument to be made that Ben Bernanke has been less activist than Milton Friedman would've recommended!

Paul is supposed to be one of the GOP's great hopes, and part of the argument for his candidacy is that his philosophy is purer and so the policies that flow from it are more sensible and less compromised. But in this interview, he seemed confused on the state of both fiscal policy and monetary policy and unwilling to make a forthright argument for his policies. It wasn't a very promising performance.

Wonkbook's Number of the Day: One in 25. That's how many people were arrested in 2011 -- or, more accurately, for every 100 people, there were 4 arrests. Some were arrested more than once.

Wonkbook's Graph of the Day: Japan's Phillips Curve looks like Japan (this is one of the classic bits of economics graph humor).

Wonkbook's Top 5 Stories: 1) Fed intrigue and Fannie's profits; 2) nobody understands health insurance; 3) passing immigration reform; 4) how the debt-limit talks could go wrong; and 5) what Wonkbook would have been like in 1980.

1) Top story: Larry Summers vs. Elizabeth Warren

What you didn't know about the relationship between Larry Summers and Sen. Elizabeth Warren. "Publicly, Summers was saying that Warren was well-qualified to head the new consumer protection board...About three weeks later, he and Warren were scheduled for a meeting in the White House...Summers opposed Warren for the post, according to Warren supporters in and outside the administration." Matt Viser in The Boston Globe.

Cleveland Fed chief says goodbye. "Federal Reserve Bank of Cleveland President Sandra Pianalto said Thursday that she will step down early next year after more than a decade leading the bank, creating another opening among top Fed officials in a period of high turnover. Ms. Pianalto, who heads one of 12 regional Fed banks, has positioned herself as a centrist within the Fed system. She often represents the emerging consensus on decisions regarding interest rates and bond purchases, drawing particular attention from investors during recent divisions inside the central bank over the direction of policy." Sudeep Reddy in The Wall Street Journal.

@BCAppelbaum: I hope the Cleveland Fed seizes this historic opportunity to relocate to Phoenix.

OECD forecasts faster growth for US. "Economic growth in Europe, the U.S. and Japan is set to pick up in the months ahead, while China and some other large developing economies will slow, according to the Organization for Economic Cooperation and Development's composite leading indicators...A reading of 100.00 for a leading indicator means economic growth is set to be at the trend rate...It said the leading indicator for the U.S. rose to 101.2 from 101.0." Paul Hannon in The Wall Street Journal.

...But forecasters are bad at forecasting, study finds. "The research team at Goldman Sachs put out a paper Thursday morning analyzing the magnitude and direction of “surprise” in every release of data — that is, the difference between the consensus expectation of economists polled by Bloomberg and where the indicator actually fell. They found that the forecasts tend to underestimate the outcome for several months in a row, and then overestimate it for several months in a row. In other words, if the forecasts were overly optimistic in one month, they’re more likely to be overly optimistic the next month, as well." Lydia DePillis in The Washington Post.

US jobless claims fall to lowest level since before recession. "The four-week moving average of claims, which smooths week-to-week volatility, fell by 6,250 to 335,500—the lowest level since November 2007, just before the recession began." Eric Morath and Sarah Portlock in The Wall Street Journal.

Home prices rise steeply in West and Sunbelt. "In the second quarter, median existing-home prices increased in 142 of the 163 metropolitan areas tracked by the National Association of Realtors, according to a survey released Thursday. Among the 10 cities with the fastest year-over-year price growth, nine were in California, Florida or Nevada—states that were hammered by the grinding real-estate bust that persisted from 2007 until last year...Nationally, the median existing-home price rose 12.2% in the second quarter from a year ago, to $203,500. That was the strongest year-over-year gain since 2005, during the throes of the pre-recession real-estate bubble. The fastest growth was the West, with 18.2% price growth, followed by the South (11.0%), the Midwest (7.9%) and the Northeast (6.9%)." Conor Dougherty in The Wall Street Journal.

...And so it's no surprise that Fannie Mae just raked in $10 billion. "Fannie said on Thursday that it would pay a dividend of $10.2 billion to the United States Treasury next month. It made no request for additional federal aid. The company said the rise in home prices during the quarter enabled it to reduce reserves set aside for losses on mortgages, helping to bolster its net income...Once the second-quarter dividend is paid, Fannie will have repaid $105 billion of the roughly $116 billion it received from taxpayers." The Associated Press.

@mattyglesias: When profits on Fannie/Freddie get large enough that there’s no net “bailout” will anyone change their mind?

This conservative economist cares more about unemployment than Obama does. "Michael Strain, an economist at the American Enterprise Institute, has a great set of suggestions, many of which (perhaps surprisingly for an AEI guy) involve new government spending programs." Dylan Matthews in The Washington Post.

What effect has sequestration had on the private sector? "Washington State is ranked first in terms of share of employment reliant on military-dependent industries, followed by New Mexico." Catherine Rampell in The New York Times.

Reading the tea leaves of consumer credit data. "Americans are taking advantage of greater credit availability without a heavy reliance on plastic, a trend economists say bodes well for a healthy recovery in consumer credit. The Federal Reserve reported Wednesday that consumer borrowing, excluding mortgages, surged ahead by $13.8 billion to $2.8 trillion in June, a 5.9 percent annual rate increase. Non- revolving credit, the category for student loans and auto financing, shot up $16.5 billion for the month, offsetting a $2.7 billion decline in credit card spending." Danielle Douglas in The Washington Post.

The private sector is spending more on R&D than ever. "The rate of growth was pretty strong for the 1950s through the 1970s, and during the 1980s, but stagnated in the 1990s and has been pretty inconsistent since. But still, the amount being pumped into R&D every year, as a share of the economy, is way higher than it was in 1980. This suggests that the slowdown in growth in R&D reflects more that GDP growth in general has been lackluster since 2000 or so, rather than anything about innovation per se. We’re still throwing a lot of money at that." Dylan Matthews in The Washington Post.

KRUGMAN: Phony fear factor. "The truth is that we understand perfectly well why recovery has been slow, and confidence has nothing to do with it. What we’re looking at, instead, is the normal aftermath of a debt-fueled asset bubble; the sluggish U.S. recovery since 2009 is more or less in line with many historical examples, running all the way back to the Panic of 1893. Furthermore, the recovery has been hobbled by spending cuts — cuts that were motivated by what we now know was completely wrongheaded deficit panic." Paul Krugman in The New York Times.

RAJAN: The paranoid style in economics. "[E]conomic policymakers require an enormous dose of humility, openness to various alternatives (including the possibility that they might be wrong), and a willingness to experiment. This does not mean that our economic knowledge cannot guide us, only that what works in theory – or worked in the past or elsewhere – should be prescribed with an appropriate degree of self-doubt. But, for economists who actively engage the public, it is hard to influence hearts and minds by qualifying one’s analysis and hedging one’s prescriptions." Raghuram Rajan in Project Syndicate.

Music recommendations interlude: Cold War Kids, "Hang Me Up to Dry," 2007.

Top opinion

KLEIN: How dumb is the immigration reform debate? "According to Massey, the rise of America’s large undocumented population is a direct result of the militarization of the border. While undocumented workers once traveled back and forth from Mexico with relative ease, after the border was garrisoned, immigrants from Mexico crossed the border and stayed...The data support Massey’s thesis: In 1980, 46 percent of undocumented Mexican migrants returned to Mexico within 12 months. By 2007, that was down to 7 percent. As a result, the permanent undocumented population exploded." Ezra Klein in Bloomberg.

DEMINT AND NEEDHAM: Defund Obamacare or shut down the government. "President Obama, along with all the Democrats, will accuse Republicans of trying to shut down the government by giving the president a spending bill that he must veto. But there is no "must" about it. If the president opts to shut down all of government instead of just ObamaCare, that will be his choice, not the wish of conservatives." Jim DeMint and Mike Needham in The Wall Street Journal.

BROOKS:  Nudge us towards enlightenment. "Government doesn’t tell you what to do, but it gently biases the context so that you find it easier to do things you think are in your own self-interest...These days, we have more to fear from a tattered social fabric than from a suffocatingly tight one. Some modest paternalism might be just what we need." David Brooks in The New York Times. 

GUPTA: Why I have changed my mind on weed. "We have been terribly and systematically misled for nearly 70 years in the United States, and I apologize for my own role in that...Not because of sound science, but because of its absence, marijuana was classified as a schedule 1 substance." Sanjay Gupta in CNN.

MCARDLE: We are all going to pension hell. "There is, in the end, a limit to how tightly past taxpayers, or their representatives, can bind the citizens of the future. It is a genuine tragedy that people who worked hard for the city of Detroit for 30 years should lose pension benefits. But that doesn’t mean that the city of Detroit should turn off the streetlights and get rid of schools and ambulance service in order to fund those lost pensions. And it’s hard to argue that the taxpayers of other places are morally obligated to step in." Megan McArdle in Bloomberg.

SWAGEL: Are Obama's policies the best way to deal with inequality of opportunity? No. "The training proposal seems well targeted, with the potential to improve participants’ earnings. The problem, however, is that the federal government already spends around $18 billion a year on training programs with modest evidence of success. The new program might be useful, but it would be better to first focus existing federal training dollars on programs with the best payoff...The administration pushes Head Start, but the evidence for the long-term impact of the program is decidedly mixed, with most evaluations not finding sustained improvements in participants’ educational outcomes and earnings." Phillip Swagel in The New York Times.

Mmm interlude: The time you have in jelly beans.

2) Why health insurance is so hard

Do you understand health insurance? Most people don’t. "Only 14 percent answered four multiple choice question about the four most basic insurance features. The respondents to the survey were a representative sample of people who had an insurance policy and were the primary or secondary stakeholders. Involved in making decisions about the insurance plan...Most Americans don’t have a comprehensive understanding of the types of cost-sharing that are at the heart of most major health insurance plans. And these are people who have health coverage right now, and consider themselves a primary or secondary health-care decision maker in their family." Sarah Kliff in The Washington Post.

Is Obamacare forcing you to work part-time? No, and let me show you with graphs. "Here’s the next conservative argument against President Barack Obama's health care law: It’s causing employers to shift full-time workers into part-time. Too bad it’s wrong. The law requires employers to sponsor health insurance for all full-time employees. It defines “full-time” as 30 hours per week or more. To avoid that burden, conservatives are saying, businesses are replacing full-time positions with part-time ones...There’s no substantial evidence yet that employers are switching from full-time to part-time in response to health-care law." Evan Soltas in Bloomberg.

85 million Americans lack dental coverage. Fixing that requires more than just money. "America already has an embarrassingly segmented dental-care system. We just haven’t owned up to it, or accepted the responsibilities that come with this reality. Oral health received embarrassingly little attention during the fight for health reform. Dental services weren’t included in Medicare. Adult dental care remains an optional Medicaid service." Harold Pollack in The Washington Post.

The District’s Obamacare marketplace is psyched to insure Hill staff. "One big beneficiary of the decision to have some Congressional staff purchase health benefits on the new marketplaces may be the marketplace right here in the District...While there are still a few looming questions about the nuts and bolts of how this will work, it near certainly means an influx of young, healthy people in the District of Columbia’s relatively tiny marketplace...[T]hese are the exact type of young people that marketplaces want to sign up because they’re younger and tend to have lower health care costs." Sarah Kliff in The Washington Post.

Washington Post interlude: Ben Bradlee to receive Presidential Medal of Freedom.

3) Wait, can immigration reform pass right now in the House?

Gutierrez: I’ve got 40-50 GOP votes for immigration reform. "Gutierrez said Republicans who support the idea are staying deliberately quiet to avoid a backlash from conservative activists...“If they asked me today, go find those 40 or 50 Republicans, I’d tell them I found them,” Gutierrez said. “I know where they’re at. They’re here. They’re present.”" Aaron Blake in The Washington Post.

Businesses push for more low-skilled visas. "As Congress considers an immigration overhaul, an eclectic group of businesses is stepping up in support, eager to take advantage of new categories of low-skilled immigrant laborers the legislation would allow. Proposals in both the House and Senate would allow hundreds of thousands of foreign workers to take on a broader set of U.S. jobs, opening a path for more immigrants to work on dairy farms, in meatpacking plants and on golf courses." Sara Murray in The Wall Street Journal.

Adorable animals is back for good interlude: Get excited, Washington: There are two new tiger cubs at the zoo!.

4) Gutter rails come off in debt-limit talks

Departure of GOP operatives could imperil debt-limit talks. "With another showdown looming over the national debt, Washington insiders last month received some unsettling news: Rohit Kumar, a Republican aide who has played a key role in warding off disaster, is leaving Capitol Hill...[H]e’s just the latest in a surprising exodus of senior GOP staffers that has worried people in both parties and darkened the outlook for the confrontation this fall. Largely invisible to the public, these are the nuts-and-bolts guys the bosses trust to negotiate critical details with Democrats, draft deals into law and explain them to the GOP rank and file. Losing them now — weeks before the next fight — weakens Republicans and leaves Democrats without familiar negotiating partners." Lori Montgomery in The Washington Post.

The federal budget deficit just dropped to 5.7 percent of GDP. "As congressional Republicans prepare to risk a government shutdown or U.S. debt default over the budget, one economic indicator undercuts the urgency for a showdown: The deficit is steadily shrinking. The federal budget deficit narrowed from more than 10 percent of the gross domestic product at the end of 2009 to 5.7 percent of GDP for the 12 months ended March 31 -- the smallest gap in four years, according to data compiled by Bloomberg." Mike Dorning in Bloomberg.

Things you wouldn't expect interlude: The CIA has a "kids" section of its website, with intelligence-themed games.

5) What Wonkbook would have been like had it existed in 1980

U.S.-Russia relationship turns chilly, again. "U.S. relations with Russia officially settled into a trough this week when President Obama canceled a summit planned for next month with Vladimir Putin, familiar surroundings for two countries that regularly approach each other only to turn away in disappointment. The White House decision to call off the summit, announced Wednesday, marked the end of Obama’s attempt to revive a relationship that by 2008 had reached its lowest point since the fall of the Soviet Union." Kathy Lally in The Washington Post.

Interview: ‘When Obama says Putin is trapped in Cold War logic, it’s true. But so is Obama.’ Ezra Klein in The Washington Post.

Don't overestimate Putin. "Vladimir Putin is not omnipotent. He does not control everything that happens in the Russian Federation, a vast and often inhospitable landmass that spans 10 time zones. Similarly, Barack Obama does not have total control over the minutiae of the United States of America. Putin does not orchestrate, he reacts. Putin is no chess player. He is a knee-jerk, short-sighted little tyrant. Don't give him credit where credit isn't due. Americans, especially Americans who have never been to Russia, overestimate the abilities of both Putin and the Russians." Julia Ioffe in The New Republic.

Chart: 94 percent of the world's nukes are either in Russia or the USEzra Klein in The Washington Post.

How the Russian press is covering the diplomatic souring. "Several analysts in Russian newspapers see the decision by US President Barack Obama to cancel his visit to Moscow next month as a sign that ties between the White House and the Kremlin are set to deteriorate further. Some say that Russia's decision to grant temporary asylum to the fugitive US intelligence analyst Edward Snowden is the reason for the crisis in bilateral relations. Others, however, point to stalled negotiations on nuclear arms reduction and the lack of progress on other important issues for the past several years." BBC.

Explainer: 10 reasons the US and Russia are at oddsBrad Plumer in The Washington Post.

Why the U.S.-Russia ‘reset’ is falling part. "[T]here’s another way to read this: as an indication not that the reset failed on its own merits so much as that it’s being abandoned because neither country seems to feel it’s  quite worth the trouble. The big problem may not be that Moscow and Washington disagree – although they certainly do – but that they just don’t care enough about those disagreements to go through the trouble of fixing them." Max Fisher in The Washington Post.

Reading material interlude: The best sentences Wonkblog read today.

Wonkblog Roundup

Our new boss's politics, in one chartDylan Matthews.

Is pot the new gay marriageLydia DePillis.

China’s Fox News says U.S. ‘ate the dirt’ on SnowdenEzra Klein.

This conservative economist cares more about unemployment than Obama doesDylan Matthews.

Do you understand health insurance? Most people don’tSarah Kliff.

The private sector is spending more on R&D than everDylan Matthews.

Crowdsourced: Should the U.S. have a natural gas sovereign wealth fundNeil Irwin.

Ten reasons the U.S. and Russia are at oddsBrad Plumer.

State renewable-energy laws turn out to be incredibly hard to repealBrad Plumer.

E-book sales are leveling off. Here's whyNeil Irwin.

Forecasters are bad at forecasting, study findsLydia DePillis.

Mitch McConnell’s campaign manager doesn’t love him. So? Ezra Klein.

85 million Americans lack dental coverage. Fixing that requires more than just moneyHarold Pollack.

Interview: ‘When Obama says Putin is trapped in Cold War logic, it’s true. But so is Obama.’ Ezra Klein.

94% of the world’s nuclear weapons are in Russia and the U.SEzra Klein.

The District’s Obamacare marketplace is psyched to insure Hill staffSarah Kliff.

Et Cetera

When independent agencies are independent in name onlyFloyd Norris in The New York Times.

Obama to hold first news conference since April todayAaron Blake in The Washington Post.

Want Congress to cut emissions? It should start with its own power plant, firstErin Banco in The New York Times.

FCC to vote on lowering prison phone call costsCecilia Kang in The Washington Post.

Oil-and-gas jobs up 40 percent, federal data showBen German in The Hill.

Got tips, additions, or comments? E-mail me.

Wonkbook is produced with help from Michelle Williams.