Paul Krugman, Nobel Prize winner in Economics, in a piece in The New York Times, takes apart the budget forecasts of GOP VP candidate, Paul Ryan. Fiscally responsible? Doesn't appear so.
"Continuing with my Ryan series, let’s look at what his budget (pdf) actually proposes (as opposed to vaguely promises) in its first decade.
First, there are a set of tax cuts for higher income brackets and corporations. The Tax Policy Center (pdf) estimates the cost of these tax cuts, relative to current policy, at $4.3 trillion.
Second, there are spending cuts. Of these, approximately $800 billion comes from converting Medicaid into a block grant that grows only with population and overall inflation – a big cut compared with projections that take into account rising health-care costs and an aging population (since the elderly and disabled account for most Medicaid expenses). Another $130 billion comes from doing something similar to food stamps. Then there are odds and ends – Pell grants, job training. Be generous and call all of this $1 trillion in specified cuts.
On top of this we should add the $700 billion in Medicare cuts that Ryan denounces in Obamacare but nonetheless incorporates into his own plan.
So if we look at the actual policy proposals, they look like this:
Spending cuts: $1.7 trillion
Tax cuts: $4.3 trillion
This is, then, a plan that would increase the deficit by around $2.6 trillion.
How, then, does Ryan get to call himself a fiscal hawk? By asserting that he will keep his tax cuts revenue-neutral by broadening the base in ways he refuses to specify, and that he will make further large cuts in spending, in ways he refuses to specify.
And this is what passes inside the Beltway for serious thinking and a serious commitment to deficit reduction."
"Continuing with my Ryan series, let’s look at what his budget (pdf) actually proposes (as opposed to vaguely promises) in its first decade.
First, there are a set of tax cuts for higher income brackets and corporations. The Tax Policy Center (pdf) estimates the cost of these tax cuts, relative to current policy, at $4.3 trillion.
Second, there are spending cuts. Of these, approximately $800 billion comes from converting Medicaid into a block grant that grows only with population and overall inflation – a big cut compared with projections that take into account rising health-care costs and an aging population (since the elderly and disabled account for most Medicaid expenses). Another $130 billion comes from doing something similar to food stamps. Then there are odds and ends – Pell grants, job training. Be generous and call all of this $1 trillion in specified cuts.
On top of this we should add the $700 billion in Medicare cuts that Ryan denounces in Obamacare but nonetheless incorporates into his own plan.
So if we look at the actual policy proposals, they look like this:
Spending cuts: $1.7 trillion
Tax cuts: $4.3 trillion
This is, then, a plan that would increase the deficit by around $2.6 trillion.
How, then, does Ryan get to call himself a fiscal hawk? By asserting that he will keep his tax cuts revenue-neutral by broadening the base in ways he refuses to specify, and that he will make further large cuts in spending, in ways he refuses to specify.
And this is what passes inside the Beltway for serious thinking and a serious commitment to deficit reduction."
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