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Monday, April 02, 2012

Paul Krugman: Pink Slime Economics

Extremists gone wild:

Pink Slime Economics, by Paul Krugman, Commentary, NY Times: ...on Thursday Republicans in the House of Representatives passed what was surely the most fraudulent budget in American history.
And when I say fraudulent, I mean just that. The trouble with the budget devised by Paul Ryan ... isn’t just its almost inconceivably cruel priorities, the way it slashes taxes for corporations and the rich while drastically cutting food and medical aid to the needy. Even aside from all that,... the alleged deficit reduction depends on the completely unsupported assertion that trillions of dollars in revenue can be found by closing tax loopholes.
And we’re talking about a lot of loophole-closing. As Howard Gleckman of the nonpartisan Tax Policy Center points out,... Mr. Ryan would, by 2022, have to close enough loopholes to yield an extra $700 billion in revenue every year. ... So which specific loopholes has Mr. Ryan, who issued a 98-page manifesto on behalf of his budget, said he would close?
None. Not one. He has, however, categorically ruled out any move to close the major loophole that benefits the rich, namely the ultra-low tax rates on income from capital. (That’s the loophole that lets Mitt Romney pay only 14 percent of his income in taxes...)
So what are we to make of this proposal? Mr. Gleckman calls it a “mystery meat budget,” but he’s being unfair to mystery meat. The truth is that the filler modern food manufacturers add to their products may be disgusting — think pink slime — but it nonetheless has nutritional value. Mr. Ryan’s empty promises don’t. ...
So the Ryan budget is a fraud;... his plan would actually make the deficit bigger even as it inflicted huge pain in the name of deficit reduction. ...
What’s going on here? The answer, presumably, is that this is what happens when extremists gain complete control of a party’s discourse... And ... if Mr. Obama is reelected, the fraudulence of this budget has important implications for future political negotiations.
Bear in mind that the Obama administration spent much of 2011 trying to negotiate a so-called Grand Bargain with Republicans, a bipartisan plan for deficit reduction over the long term. ...
But what we learn from the latest Republican budget is that the whole pursuit of a Grand Bargain was a waste of time and political capital. For a lasting budget deal can only work if both parties can be counted on to be both responsible and honest — and House Republicans have just demonstrated, as clearly as anyone could wish, that they are neither.

    Posted by on Monday, April 2, 2012 at 12:42 AM in Budget Deficit, Economics, Politics | Permalink  Comments (53)


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