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Friday, April 08, 2011

Paul Krugman: Ludicrous and Cruel

Should the Ryan plan be treated as a serious budget proposal?:

Ludicrous and Cruel, by Paul Krugman, Commentary, NY Times: Many commentators swooned earlier this week after House Republicans, led by ... Paul Ryan, unveiled their budget proposals. They lavished praise on Mr. Ryan, asserting that his plan set a new standard of fiscal seriousness.
Well, they should have waited... For the G.O.P. plan turns out not to be serious at all. Instead, it’s simultaneously ridiculous and heartless. How ridiculous is it? ...
First, Republicans have once again gone all in for voodoo economics — the claim, refuted by experience, that tax cuts pay for themselves. ...
And about those spending cuts: leave health care on one side for a moment... According to the budget office ... the proposal calls for spending on items other than Social Security, Medicare and Medicaid — but including defense — to fall ... to ... just 3.5 percent of G.D.P..., less than we currently spend on defense alone... How could such a drastic shrinking of government take place without crippling essential public functions? The plan doesn’t say.
And then there’s the much-ballyhooed proposal to abolish Medicare and replace it with vouchers... [P]rivatizing Medicare does nothing, in itself, to limit health-care costs. ... The only way that can happen is if those vouchers are worth much less than the cost of health insurance. In fact, the Congressional Budget Office estimates that by 2030 the value of a voucher would cover only a third of ... Medicare as we know it. So the plan would deprive many and probably most seniors of adequate health care.
And that neither should nor will happen. Mr. Ryan and his colleagues can write down whatever numbers they like, but seniors vote. And when they find that their health-care vouchers are grossly inadequate, they’ll demand and get bigger vouchers — wiping out the plan’s supposed savings.
In short, this plan isn’t remotely serious; on the contrary, it’s ludicrous.
And it’s also cruel..., of the $4 trillion in spending cuts he proposes over the next decade, two-thirds involve cutting programs that mainly serve low-income Americans. And by repealing last year’s health reform,... the plan would also deprive an estimated 34 million nonelderly Americans of health insurance.
So the pundits who praised this proposal when it was released were punked. The G.O.P. budget plan isn’t a good-faith effort to put America’s fiscal house in order; it’s voodoo economics, with an extra dose of fantasy, and a large helping of mean-spiritedness.

    Posted by on Friday, April 8, 2011 at 12:33 AM in Economics, Fiscal Policy, Politics | Permalink  Comments (95)


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