Star Tribune editorialists went out of their way Monday morning to praise Wisconsin Congressman Paul Ryan’s entitlement-privatization budget — or rather, the readers who didn’t scream about it.
The expected fear and loathing was in short supply. Instead, many of those commenting seemed relieved that someone, somewhere, was proposing something that might actually work: a plan that would stem the nation’s red-ink spending and balance its books.(Ryan’s plan would take a while — until 2080 — to achieve that goal, but it does get there eventually.)
In this case, fear and loathing may be wise. While the Strib acknowledged Ryan’s budget is too cut-heavy, editorialists ignored more fundamental questions about the deficit-closing benefit.
On Wednesday, the Center on Budget and Policy Priorities released an analysis contending that under Ryan’s proposal, the deficit would soar, rather than sink.
Though CPBB criticizes Ryan’s regressive spending cuts (such as slicing Medicare outlays 76 percent in real terms by 2080), the deficit problem is on the revenue side. The Congressional Budget Office, which produced the zero-by-2080 estimate, did not look at money coming in, instead accepting Ryan’s revenue assumptions. The CBO’s report noted that with multiple caveats, even if the Strib’s editorial didn’t.
CBPP, which swings from the left side of the plate, didn’t take Ryan’s revenue claim at face value, asking another D.C. institution, the Tax Policy Center, to analyze the income side of the ledger. The TPC concluded — stop me if you’ve heard this before — that large tax cuts would cause federal revenues to fall significantly (3 percent of Gross Domestic Product) below Ryan’s assumption. You can see the net effect in the chart at right.
Budget geeks should check out the CBPP’s report, Ryan’s response, and the CBPP’s rebuttal here.
I agree with the Strib that folks are longing for a realistic deficit-reducing solution, but rather than Ryan being “one of the rare politicians who believes that Americans are ready to handle the truth,” he may be just another politician selling a unicorn — or worse, a Trojan Horse that would shred the social safety net and balloon the deficit. We’ve seen the revenue-side games before, which you’d think would argue for skepticism, no matter how contrarian the plan.
If we truly want to close the deficit, we’ll probably have to cut spending and raise taxes. That’s not as sexy as Ryan’s headline-grabber, but, as the Strib might say, it might actually work.
A 70 year budget deficit reduction plan? Good luck with that. We’re barely 70 years out from the Great Depression and haven’t maintained a steady economic plan for more than a presidential term or two in that time.
And of course Ryan’s proposals (such as they are) are not free — they’re based on privatizing Medicare and Social Security.
I’ll be 138 in 2080. Might actually need some government help then, so I’d hate to see it cut back.
Ryan also wants to shift to various kinds of sales taxes. Ryan’s proposals aren’t an example of serious thinking; they are a collection of denialist political fantasies, carefully designed to avoid tackling the real problems we face. At least for a while.
“A 70 year budget deficit reduction plan?”
Makes you wonder whether the guy is a fan of Ayn Rand, rather than Joe Hill, who also talked about promises of pies in the sky after one dies.
Joseph Siglitz, the Nobel prize winner in Economics, has just one recommendation: Tax the rich. The government needs to stimulate the economy much more, and much more efficiently. This can be done by running deficits, but this will cause a decrease in growth when the bills come due. Conversely, making the rich pay reduces the deficit and stimulates the economy.
The Center on Budget and Policy Priorities?
Right.
I know this may come as a shock to some, but outside of the scary smart, reality based community, not everyone is willing to take what a member group of the Soros network has to say very seriously.
I’m sorry, Tom, but yours is simply an ad hominem attack, with the usual boilerplate insults thrown in. Zzzz…
Fortunately, CBPP, the Tax Policy Center (which is not part of CPBB and has Bush appointees involved) and even Cong. Ryan have been more substantive in their debate.
So, Rob, I take it you were impressed with Siglitz’s opus; ‘Whither Socialism’.
http://www.amazon.com/Whither-Socialism-Wicksell-Lectures-Stiglitz/dp/0262691825
Personally, while I can understand the popularity of Siglitz in Scandanavia, I find myself more closey aligned with the majority of his American free market critics…which would have certianly included Thomas Jefferson.
Whaaa? Invoking Soros’ name (quite properly in this instance) constitutes an insult?
You must have your windows open this morning, Dave…congratulations!
Tom – you mean you dropped Soros’ name as a compliment? Will wonders never cease!
Again, though, it was an attack on the person, not the substance of the argument. I know Soros is a favored boogeyman, but it really doesn’t invalidate the points made.
Dave, the fact of the matter is that the “Center on Budget and Policy Priorities” counts George Soros as one of its largest sources of funding. Many would, and do call it part of his daisy chain of sock puppet theaters.
And as I said, correctly, attaching Soros’ name to a source of information causes many thoughtful readers to reduce the weight they choose to give the source, or as in this case, cause them to ignore it completely.
You see, in some cases, such as with George Soros, an “attack” on the person (as in the mere mention of his name), *is* an attack on the substance of the argument…which is why the beneficiaries of his largess are always loath to acknowledge his financial influence.
I’m sure Eric Black can explain it to you.
CFR’s Center for Geoeconomics provides this illuminating graphic of annual cost of tax expenditures.
http://blogs.cfr.org/geographics/2012/08/15/taxanddeficit/
The graphic is not comprehensive; it omits the largest, which is the health insurance exclusion, at $190 billion in 2014, according to OMB.
I don’t think anybody sensible has ever characterized CRFB as left leaning. Methodology-wise, in regards to assessing revenue impacts, it tends to rely on JCT or OMB tabulations (so no macro-level dynamic scoring). In other cases, it relies upon CBO and TPC.
Of course, the circle can be squared if one assumes incredibly high factor supply elasticities (much higher than in the TPC report). TPC found that repealing the AMT and cutting rates by 20 percent would increase the deficit by more than $3 trillion over the next 10 years, even after the 2001/2003/2010 tax cuts are extended. So I still don’t see how the circle is squared. But I confess to having limited imagination.
For those with an unrestrained imagination, I have included the links to the Tax Policy Center and The Committee for a Responsible Federal Budget
http://www.taxpolicycenter.org/
http://www.brookings.edu/research/papers/2012/08/01-tax-reform-brown-gale-looney
http://crfb.org/blogs/how-would-governor-romney-pay-his-tax-cuts
Nice try, Tom, but no dice. There is actual data here – arguments with numbers and stuff – that supercede the guilt-by-association thing you’re trying to do.
If the analysis or numbers stink, go to it – should be easy enough if this is “sock-puppetry,” no? But critiquing the numbers (while mindlessly accepting a politician’s balmy assumptions about his own proposal) would be a bit harder than the Pavlovian thing.
[Note: There’s a link to the CBO numbers in the CBPP report, but if you actually *read* the analysis – or the story – the CBO acknowledges didn’t vet the revenue side, which is what the Tax Policy Center did.]
Love to check your numbers and stuff, Dave…unfortunately you only linked to the Soros side of the equation. How about a link to the CBO?
Well Tom – despite you channeling Jefferson – Stiglitz correctly warned about impending economic catastrophe for years. Did you? In his book Freefall Stiglitz makes his case, and refutes the arguments of the supply-siders who claim that raising taxes on the rich will cut growth, the reason being there is so much excess capacity now that no one would even notice if the rich took to the sidelines.
In many ways I’d prefer to see Ryan back as chairman of the budget committee, a position for which he is well suited. I think Romney is dangerously clueless on foreign affairs, and Obama will be a useful check on a Republican Congress. But I am grateful that Ryan’s presence brings questions of entitlement reform and balanced budgets to the Presidential campaign.