Paul Ryan's budget plan won't do much, if anything, to help with the deficit, but it does redistribute money upward and it will require "sharp cuts" in social insurance. It also relies upon ideas that have been proposed -- and rejected -- in the past. Why is this considered innovative thinking?:
Man, by Paul Krugman, Commentary, NY Times: One depressing aspect of
American politics is the susceptibility of the political and media establishment
to charlatans. You might have thought, given past experience, that D.C. insiders
would be on their guard against conservatives with grandiose plans. But no: as
long as someone on the right claims to have bold new proposals, he’s hailed as
an innovative thinker. And nobody checks his arithmetic.
Which brings me to the innovative thinker du jour: Representative Paul Ryan of
Wisconsin ... has become the Republican Party’s poster child for new ideas
thanks to his “Roadmap for America’s Future,” a plan for a major overhaul of
federal spending and taxes. News media coverage has been overwhelmingly
favorable... But it’s the audacity of dopes.
Mr. Ryan’s plan calls for steep cuts in both spending and taxes. He’d have you
believe that the combined effect would be much lower budget deficits, and,
according to [the] Washington Post..., his plan would ... sharply reduce the
flow of red ink... But the ... nonpartisan Tax Policy Center ... indicate[s]
that the Ryan plan would ...[produce a] deficit in 2020 [of] roughly $1.3
And that’s about the same as the ... estimate of the 2020 deficit
under the Obama administration’s plans. That is,... even if you believe that his
proposed spending cuts are feasible — which you shouldn’t — the Roadmap wouldn’t
reduce the deficit. All it would do is cut benefits for the middle class while
slashing taxes on the rich.
And I do mean slash. The ... Ryan plan would cut taxes on the richest 1 percent
... in half, giving them 117 percent of the plan’s total tax cuts. That’s not a
misprint. Even as it slashed taxes at the top, the plan would raise taxes for 95
percent of the population.
Finally, let’s talk about those spending cuts. In its first decade, most of the
alleged savings ... come from assuming zero dollar growth in domestic
discretionary spending, which includes everything from energy policy to
education to the court system. This would amount to a 25 percent cut once you
adjust for inflation and population growth. How would such a severe cut be
achieved? What specific programs would be slashed? Mr. Ryan doesn’t say.
After 2020, the main alleged saving would come from sharp cuts in Medicare,
achieved by dismantling Medicare as we know it, and instead giving seniors
vouchers ... It’s the same plan Newt Gingrich
tried to sell in 1995.
And we already know, from experience with the Medicare Advantage program, that a
voucher system would have higher, not lower, costs... The only way the Ryan plan
could save money would be by making those vouchers too small to pay for adequate
coverage. ... In practice, that probably wouldn’t happen: older Americans would
be outraged — and they vote. But this means that the supposed budget savings
from the Ryan plan are a sham.
So why have so many in Washington, especially in the news media, been taken in
by this flimflam? It’s not just inability to do the math, although that’s part
of it. There’s also the unwillingness of self-styled centrists to face up to the
realities of the modern Republican Party; they want to pretend, in the teeth of
overwhelming evidence, that there are still people in the G.O.P. making sense.
And last but not least, there’s deference to power — the G.O.P. is a resurgent
political force, so one mustn’t point out that its intellectual heroes have no
But they don’t. The Ryan plan is a fraud that makes no useful contribution to
the debate over America’s fiscal future.
Posted by Mark Thoma on Friday, August 6, 2010 at 12:42 AM in Budget Deficit, Economics, Politics |