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Editorial: Two views of Ryan’s plan

Editor’s note: This piece was assembled by Angelo Lynn, and largely quotes two prominent sources — one conservative and one liberal — on Ryan’s budget plan.
David Stockman, the budget czar under President Reagan from 1981-85, wrote a scathing opinion piece in The New York Times this past Monday about Paul Ryan’s budget plan. Stockman, some might remember, was criticized for budgets that ramped up the federal debt at an average annual rate of 26 percent because of excessive tax cuts that failed to put enough revenue back into the system. Even with his sterling conservative credentials, however, he has nothing kind to say about Ryan’s math skills or political acumen.
“Thirty years of Republican apostasy — a once grand party’s embrace of the welfare state, the warfare state and the Wall Street-coddling bailout state — have crippled the engines of capitalism and buried us in debt. Mr. Ryan’s sonorous campaign about shrinking Big Government and giving tax cuts to ‘job creators’ (read: the top 2 percent) will do nothing to reverse the nation’s economic decline and arrest its fiscal collapse.”
Criticizing Ryan’s stance on defense as “neoconservative imperialism that the G.O.P. cobbled from policy salons run by Irving Kristol’s ex-Trotskyites three decades ago,” Stockman slams today’s Republican Party for embracing doctrines under President Bush that “now saddle our bankrupt nation with a roughly $775 billion defense budget in a world where we have no advanced industrial state enemies and have been fired (appropriately) as the global policeman…. The Romney-Ryan version of shrinking Big Government is to increase our already outlandish warfare-state budget and risk even more spending by saber-rattling at a benighted but irrelevant Iran.”
Stockman chastises Ryan for his “phony” plan to solve the entitlement mess because no significant changes would become effective for at least a decade. “A true agenda to reform the welfare state would require a sweeping, income-based eligibility test, which would reduce or eliminate social insurance benefits for millions of affluent retirees,” Stockman writes. “Without it, there is no math that can avoid giant tax increases or vast new borrowing. Yet the supposedly ‘courageous’ Ryan plan would not cut one dime over the next decade from the $1.3 trillion-per-year cost of Social Security and Medicare. Instead it shreds the measly means-tested safety net for the vulnerable: the roughly $100 billion per year for food stamps and cash assistance for needy families and the $300 billion budget for Medicaid, the health insurance program for the poor and disabled.”
In his most damning criticism, Stockman challenges his party’s leaders on their false claims to create jobs.
“Like his new boss,” Stockman wrote, “Mr. Ryan has no serious plan to create jobs. America has some of the highest labor costs in the world, and saddles workers and businesses with $1 trillion per year in job-destroying payroll taxes. We need a national sales tax — a consumption tax, liked the dreaded but efficient value-added tax — but Mr. Romney and Mr. Ryan don’t have the gumption to support it. The Ryan Plan boils down to a fetish for cutting the top marginal income-tax rate for ‘job creators’ — that is, the super wealthy — to 25 percent and paying for it with an as-yet-undisclosed plan to broaden the tax base… In short, Mr. Ryan’s plan is devoid of credible math or hard policy choices. And it couldn’t pass even if Republicans were to take the presidency and both houses of Congress. Mr. Romney and Mr. Ryan have no plan to take on Wall Street, the Fed, the military-industrial-complex, social insurance or the nation’s fiscal calamity and no plan to revive capitalist prosperity — just empty sermons.”
If the party faithful can see through such obvious false claims, why has the nation’s media been so enamored with Ryan? New York Times columnist Paul Krugman recently made a not-so-flattering guess: “One depressing aspect of American politics is the susceptibility of the political and media establishment to charlatans…. 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.”
Krugman, a Nobel prize-winning economist, calls Ryan’s “Roadmap for America’s Future” a plan that is “serving up leftovers from the 1990s, drenched in flimflam sauce.” Krugman points out that Ryan’s budget (even if all of its rosy assumptions about revenue growth due to tax cuts on the rich — didn’t happen under Reagan and it didn’t happen under George W.) puts the nation at a $1.3 trillion budget deficit by 2020, which is about the same as the non-partisan budget office’s deficit projection under President Obama’s plan — but without the unrealistic assumptions on revenue growth. Meaning that Ryan’s budget plan would likely cause much higher deficits, just as was seen during the Bush and Reagan years.
Moreover, Ryan’s plan would decimate benefit programs for the poor and middle class, while slashing taxes for the super rich. Under the Ryan budget plan, taxes would be cut in half for the top 1 percent of American income earners, giving them 117 percent of the plan’s total tax cuts, says Krugman, while “raising taxes for 95 percent of the population.”
Ryan’s plan also calls for zero growth in domestic discretionary spending, which Krugman says, “amounts 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, Krugman continues, the “main alleged saving would come from sharp cuts in Medicare,” dismantling it and 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 than our current system. The only way the Ryan plan could save money would be by making those vouchers too small to pay for adequate coverage. Wealthy older Americans would be able to supplement their vouchers and get the care they need; everyone else would be out in the cold. 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.”
Furthermore, Krugman writes in a more recent column, “the Ryan budget purports to reduce the deficit, but the alleged deficit reduction depends on the completely unsupported assertion that trillions of dollars in revenue can be found by closing tax loopholes…(but) to make his numbers work, Mr. Ryan would, by 2022, have to close enough loopholes to yield an extra $700 billion in revenue every year. That’s a lot of money, even in a budget as big as ours. So which specific loopholes has Mr. Ryan 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 rates on income from capital. That’s the loophole that lets Mitt Romney pay only 14 percent of his income in taxes, a lower rate than that faced by many middle-class families.”
“So why have so many in Washington, especially in the news media, been taken in by this flimflam? It’s not just the 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 GOP making sense. And last, but not least, there’s deference to power — the GOP is a resurgent political force, so one mustn’t point out that its intellectual leaders have no clothes. But they don’t.”
Editor’s note:Good use of the word “apostasy” which means, “an abandoning of what one has believed in, as a faith, cause, principles.” As in Stockman’s comment: “Thirty years of Republican apostasy…”
And here’s a word we don’t use much today, but it still stings: charlatan — “a person who pretends to have expert knowledge or skill that he does not have; fake.” Note Krugman’s use of it above. Interestingly, the root of the word comes from the Italian ciarlatano,a quack, and cerretano,one who cries out in the market place, and from the Latin, cerretanus,seller of papal indulgences at Cerreto, a town in Italy; also influenced by the Italian, ciarlare,to prate. That’s priceless.

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