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Must read: WaPo buys into nonsense GOP budget; Krugman calls bullshit
The Web site for the award-winning alternative weekly, the Philadelphia City Paper.
Must read: WaPo buys into nonsense GOP budget; Krugman calls bullshit
On Monday, the Washington Post ran a glowing, page one profile of US Rep Paul Ryan, the Wisconsin Republican who has offered what he terms a "roadmap" to financial sustainability. It paints him as one of the few serious GOP voices on budget issues (since, let's face it, legitimate policy formulation is not exactly their forte of late).
Ryan is running a campaign of a different sort, one his party has so far refused to adopt: He is determined to persuade colleagues to get serious about eliminating the national debt, even if it means openly broaching overhauls of Medicare and Social Security.
...
His ideas are provocative, to say the least. They include putting Medicare and Medicaid recipients in private insurance plans that could cost the government less but potentially offer fewer benefits; gradually raising the retirement age to 70; and reducing future Social Security benefits for wealthy retirees.
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Ryan has not helped to make it easy for his leaders. He is a loyal Republican, but he is also perhaps the GOP's leading intellectual in Congress and occasionally seems to forget that he is a politician himself.
Wow. So the WaPo has drunk the Ryan Kool-Aid, huh? And hey, on the one hand, can you blame them? It's not like the modern GOP — you know, the one currently debating the 14th Amendment and responding in Pavlovian form to whatever pops up on Glenn Beck's Chalkboard of Doom — is packed with particularly bright lights these days. And the Congressional Budget Office has made the press's job easy: After all, Ryan's roadmap would, supposedly, cut the deficit in half in 10 years. That's something we can all get behind, no?
Sure. If you read the top lines. If, however, you're a Nobel Laureate economist, say, Paul Krugman, you're a bit more likely to poke around the fine print.
One thing that has been overwhelmingly obvious in the discussion of Paul Ryan's roadmap is that lots of people who should know better — including, alas, reporters at the Washington Post — don't know how to read a CBO report. They think you can just skim it and get the gist; and people like Mr. Ryan have taken advantage of that misconception.
As it turns out, those CBO numbers, like all CBO numbers, are based on the assumptions of the House representative who is requesting the CBO's analysis. So, the CBO, for all of the worthwhile stuff it does, can sometimes be a garbage-in-garbage-out kind of place, especially when the rep seeking data feeds in spectacularly misleading data. Ahem, Mr. Ryan.
Well, the Ryan plan as described is a combination of tax cuts and cuts in entitlement spending. So where does this show in the CBO estimate? On the tax side, we immediately see that the CBO finds no effect — revenue with the Ryan plan is the same as without it.
In other words, Ryan plans a massive overhaul of US tax policy, with steep, across the board decreases in income tax rates, but wants CBO to assume that this would have, you know, absolutely no impact on incoming government revenues. The CBO obliged, because that's its job, although it did note, in its own way, the unlikelihood of Ryan's pipe dream coming true:
The proposal would make significant changes to the tax system. However, as specified by your staff, for this analysis total federal tax revenues are assumed to equal those under CBO's alternative fiscal scenario (which is one interpretation of what it would mean to continue current fiscal policy) until they reach 19 percent of gross domestic product (GDP) in 2030, and to remain at that share of GDP thereafter.
Even under those assumptions, which, you know, are either willfully ignorant or intentionally deceptive, the Ryan plan doesn't work unless there is an absolute freeze of non-defense discretionary spending at 2009 levels for at least the next decade. And, of course, this sounds nice and all, except it's insane. As Krugman points out:
OK, that's an old, familiar scam — it was used to inflate surplus projections back in 2001 to justify the Bush tax cuts. Keeping nominal spending constant means deep cuts in real per capita terms — about 25 percent over a decade. That's not going to happen: nondefense discretionary spending is already at a low point as a share of GDP, and unless someone can detail how such massive further cuts are possible, they're just blowing smoke.
If this is the GOP's âleading intellectual,â as the Post declares, then the opposition party may be more FUBAR than we could possibly imagine.
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He wants to mess with Medicare? A system that has such a high satisfaction rate? & that's sound policy to WaPO? We could just eliminate Medicare altogether, if we carry this ridiculous plan to its logical conclusion.
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