He's Baaack!

Congressman Paul Ryan is back putting the GOP's tax-cut and austerity strategy on the table. Ezra Klein at the Washington Post comments on what he sees an as inevitable gutting of the social safety net given the tax-cuts-for-millionaires ideology, coupled with a clamor for short term deficit reduction, at the core of every GOP economic proposal:

Ryan's budget asks for enormous sacrifice from, say, disabled Medicaid beneficiaries even as it appears to provide enormous tax benefits to wealthier Americans. The same is true for Romney's budget, and, in even more exaggerated ways, for the fiscal promises made by Newt Gingrich and Rick Santorum. The Republican Party has backed itself into a fiscal strategy in which this kind of concentrated sacrifice on the part of the poor is the only possible path forward.

Jonathan Cohn at New Republic takes apart the new Paul Ryan GOP budget plan:

Imagine a politician held a press conference in order to boast about a plan that would take health insurance away from tens of millions of people, while effectively eliminating the federal government except for entitlements and defense spending. You probably can’t, because no politician would ever do that.

Except Paul Ryan just did.

No, he didn’t put it in quite those terms. Instead, Ryan on Tuesday unveiled the latest version of his proposal for the federal budget, which he calls the “Path to Prosperity.” He vowed that it would reduce deficits, promote economic growth, and strengthen the safety net. The first two claims are dubious, at best. The third is just dishonest—and, if taken literally, morally bankrupt.

From afar and even up close, the new Ryan budget actually looks a lot like the old Ryan budget. It calls for a reduction in taxes that, if implemented, would likely give a disproportionate share of benefits to the wealthy. It calls for radically reducing discretionary spending, so that it is less than 4 percent of gross domestic product by 2050. And it calls for transforming Medicare into a voucher system.

Officially, the end result would be lower deficits, lower even than the deficits that President Obama’s latest budget proposal would produce. And that’s a major selling point for Ryan and the Republicans. But the numbers seem more than a little fanciful.

For one thing, Ryan envisions a reduction in non-defense discretionary spending to levels this country hasn’t had since just after World War II. According to the Center on Budget and Policy Priorities, by 2050 “most of the federal government aside from Social Security, health care, and defense would cease to exist.” That’s everything from air traffic control to medical research to food inspections to Pell Grants, by the way. If the Ryan budget somehow became reality then you might have to give up on college and avoid air travel—assuming you survived the food poisoning and killer diseases.

 Read the rest of Cohn HERE.

And more HERE from Jon Chait on the "GOP's Plan to Save America From the Poor"

The GOP's "Fiscal Phonies"

Paul Krugman compares the tax proposals of the GOP presidential contenders with President Obama's, projecting debt as a % of GDP under the varying plans:

(C)ompare the Republican plans with the Obama administration’s plan, which would at least allow the high-end tax cuts to expire. How does debt under this plan compare with the four Republicans?

Well, here’s debt as a percentage of GDP in 2021 (using the OMB numbers (pdf) for Obama and CRFB (Committee for a Responsible Federal Budget) for the others):

 

Yep: as Republicans yell about Obama’s deficits and cry that we’re turning into Greece, Greece I tell you, all of them, all of them, propose making the deficit bigger.

And for what? For reverse Robin-Hoodism, taking from the poor and the middle class to lavish huge tax cuts on the rich.

And I believe that all of them know this, too. It’s pure hypocrisy – and it’s all in the service of class warfare waged on behalf of the top 0.1 or 0.01 percent of the income distribution.

Willard's Wild Tax Scheme II

Via Progress Report:

Previous Romney Giveaways to the Wealthy

• Abolishes the estate tax — a tax paid only by the wealthiest one-quarter of one percent of Americans.
• Maintains the special low tax rates on investments put in place by President Bush that disproportionately benefit the wealthy and would otherwise expire at the end of this year. Romney himself takes advantage of these special low rates on a considerable portion of his sizable income.
• Maintains special loopholes for hedge fund and private equity managers — loopholes Romney himself takes advantage of.
• Maintains the Bush marginal tax rates for the wealthy which would otherwise expire at the end of this year.

New Romney Giveaway to the Wealthy

• Cuts tax rates on the wealthiest Americans by another 20 percent below Bush tax rates. Under President Obama, the wealthiest Americans will pay a top income tax rate of 39.6 percent in 2013; under Romney, they would pay just 28 percent.

Magic Math

• Jobs: Mitt Romney promises his expansion of the Bush tax cuts will create jobs; however, the Bush tax cuts resulted in the weakest job growth in decades. There’s no reason to think that cutting taxes on the wealthy even more will result in a different outcome.
• Deficits: The Romney campaign promises that his massive new tax cuts “do not expand deficits” because of “stronger economic growth and reductions in spending.” The Heritage Foundation promised the exact same thing about the Bush tax cuts in 2001, even going so far as to claim that the federal debt would be paid off by 2010.

Real Math

• Romney’s proposed tax cut would cost FOUR TIMES MORE than the Bush tax cuts.
• According to the Center for American Progress Action Fund’s Michael Linden, Romney’s plan would shrink tax revenues by an astounding $10.7 TRILLION over the next ten years and reduce taxes as a share of GDP to a paltry 15 percent. The only way to run the U.S. government on that level of revenue is to run massive deficits and undertake program-ending cuts in Social Security, Medicare, Medicaid, and all discretionary programs. Since Romney refuses to make cuts to defense — and indeed has proposed increasing defense spending — the deficits and the cuts would both be all the more massive as a result. All of course done in the name of giving more and larger tax cuts to the wealthiest Americans.

IN ONE SENTENCE: Instead of helping to create an economy that works for everyone, Romney’s tax plan simply quadruples down on a broken economy that is rigged for the benefit of a wealthy few.

"Failure is good"

Krugman debunks the Super-Committee:

It’s a bird! It’s a plane! It’s a complete turkey! It’s the supercommittee!

By next Wednesday, the so-called supercommittee, a bipartisan group of legislators, is supposed to reach an agreement on how to reduce future deficits. Barring an evil miracle — I’ll explain the evil part later — the committee will fail to meet that deadline.

If this news surprises you, you haven’t been paying attention. If it depresses you, cheer up: In this case, failure is good.

"Root canal" governance

Thomas Edsall at the NYTs on the politics of austerity:

The economic collapse of 2008 transformed American politics. In place of shared abundance, battles at every level of government now focus on picking the losers who will bear the costs of deficit reduction and austerity.

Fights in Washington are over inflicting pain on antagonists either through spending cuts or tax increases, a struggle over who will get a smaller piece of a shrinking pie. This hostile climate stands in sharp contrast to the post-World-War II history of economic growth. Worse, current income and employment trends suggest that this is not a temporary shift.

The year 2008 marked the emergence of a Democratic Party driven by surging constituencies of minorities, single women and voters under 30. The flowering of this coalition, manifested in the election of President Obama and in continued Democratic control of Congress, was quickly followed by developments affirming the activist, redistributive state: the enactment of a $787 billion economic stimulus bill, passage of the $900 billion health care reform act and rising demand for food stamps, unemployment compensation and Medicaid...

As the national debt grew from $10.6 trillion when Obama took office to $13.7 trillion on Election Day 2010, the stage was set for a conservative revival. Conservatives successfully shifted the focus of American politics to the twin themes of debt and austerity — with a specific attack on means-tested entitlement programs.

The Republican Party, after winning back control of the House in 2010, has reverted to the penny-pinching of an earlier era, the green eyeshade Grand Old Party of Herbert Hoover and Robert Taft, advocating a “root canal” approach to governance…

The GOP has devolved into a dangerous, deadly cult

Reflections of Mike Lofgren, a recently-resigned, 28-year staffer for the Congressional GOP:

Barbara Stanwyck: "We're both rotten!"

Fred MacMurray: "Yeah - only you're a little more rotten." -"Double Indemnity" (1944)

Those lines of dialogue from a classic film noir sum up the state of the two political parties in contemporary America. Both parties are rotten - how could they not be, given the complete infestation of the political system by corporate money on a scale that now requires a presidential candidate to raise upwards of a billion dollars to be competitive in the general election? Both parties are captives to corporate loot. The main reason the Democrats' health care bill will be a budget buster once it fully phases in is the Democrats' rank capitulation to corporate interests - no single-payer system, in order to mollify the insurers; and no negotiation of drug prices, a craven surrender to Big Pharma.

But both parties are not rotten in quite the same way. The Democrats have their share of machine politicians, careerists, corporate bagmen, egomaniacs and kooks. Nothing, however, quite matches the modern GOP.

The impact of "starving the beast" on unemployment

Think Progress: "If government payrolls were the same today as they were back in 2009, the unemployment rate would be significantly lower, standing at 8.4 percent, instead of the current 9.1 percent."

"Obama and the Democrats are fighting to get what the Republicans and the right-wing economic think tanks originally proposed they should do, and the GOP just keeps walking the goalposts to the right"

 We are truly screwed.

The Democrats are seeking to impose the conservative approach to deficit reduction, while the GOP has chosen to simply take the terrorist route and threaten to blow up the economy unless anti-tax zealot Grover Norquist - to whom the Republicans have literally pledged allegiance as maximal leader in their anti-tax cult - gains victory in his "drown the US government in a bathtub" jihad.

It appears that no one - save perhaps Bernie Sanders - is pushing for a balanced fiscal approach that actually makes economic sense in the context of deep recession and a jobs crisis. 

Mike Konczak at "Rortybomb" has this depressing insight into the depths - and rather pathetic ironies -  of the present impasse:

Republicans Reject the Republican Offer on Deficit Cutting Mix, or Democrats Propose the (Rightwing) AEI Plan on Tax Increases vs Spending Cuts

Taxes are lower than ever - so why are taxes "off the table" for Eric Cantor and his ideological confreres?

Paul Krugman has this regarding the tax side of any debt ceiling deal:

(Republicans) are willing to risk the good faith and credit of the federal government, rather than accept so much as a single penny of tax increases as part of a deal.

Given all that, it seems almost redundant to mention that federal tax receipts as a percentage of GDP are near a historic low:

      Federal receipts as % of GDP

 
So why are we seeing what appears to be childish behavior on the part of Eric Cantor and his fellow GOP legislators in the context of critical "negotiations" over the debt ceiling as they refuse any effort to increase revenues rather than just taking an axe to critical programs like Medicare and Social Security?  Krugman answers that burning question in our "quote of the day":

(T)he GOP never cared about the deficit — not a bit. It has always been nothing but a club with which to beat down opposition to an ideological goal, namely the dissolution of the welfare state. They’re not interested, at all, in a genuine deficit-reduction deal if it does not serve that goal.

Behind the GOP facade - "deficits don't matter"

Grover Norquist and John Boehner

"Lapsed Republican" Bruce Bartlett, commenting to the Washington Post on the power of the extremist  right-wing anti-tax "enforcer," Grover Norquist, who has extracted a pledge never to raise taxes from  all but 13 of the 288 GOP elected reprsentatives in DC:

(E)ven though tax increases may be justified economically, they are never justified politically if you’re a Republican...it’s been Republican dogma that deficits don’t matter and the only thing that matters for the economy is cutting taxes.

"Are you talkin' to me?"

"I got some bad ideas in my head!"

During yesterday's dismal White House budget meeting, Paul Ryan complained to the President about the "demagogy" of describing as  "vouchers" Ryan's plan to end Medicare in favor of...uh...vouchers. 

Then there was this zinger.

"We didn't create this mess," a Republican Congressman reportedly told Treasury Secretary Tim Geithner

Ryan's whining aside, on the larger issue of who created "this mess" - of course, they did.  The Republicans advocated for the policies and/or oversaw the calamities generating the red ink that's scaring voters.

"We didn't create this mess - blame Obama!" (or Medicare) are the Big Lies of the GOP's phony deficit hysteria and a shameless evasion of responsibility.

The graph that gives the lie to GOP arguments about the economic impact of tax increases vs. tax cuts

It's no secret that job growth and GDP growth were strong in the years after President Clinton increased taxes to curb deficits and get the government on sounder fiscal footing,  and that George W. Bush presided over a remarkably weak economy after making tax cuts the centerpiece of his economic program.  But that doesn't stop Republicans from spinning fantastical tales of the inevitable and terrible consequences of even modest tax increases to curb long-term deficits.

The truth is that tax cuts are ideology - rather than pragmatic policy - in GOP circles and have the aura of creationism for religious fundamentalists.  I don't really care what religious fundamentalists believe happened millions, or in their view thousands, of years ago - as long as they don't try to sell it as "science" in the schools.  But for contemporary "conservatives" posing as "deficit hawks" to make arguments about tax cuts that are based solely on a belief system, rather than what we know - at least in terms of co-relation - about our economy and fiscal trajectory over the past 20 years is a signal of just how un-serious they are about fiscal sanity and balancing budgets. 

An irrational, counter-factual article of faith - rooted in the disastrous "Starve the Beast" anti-government ideology - drives one of our political parties.  And driven by that dogma, they're willing to drive the country off a cliff.

Via Ezra Klein, Wonkbook.

"Starve the Beast" made taxpayers poorer (and killed conservatism in the bargain)

Self-proclaimed fiscal conservative and blogger extraordinaire, Andrew Sullivan, has been praising Paul Ryan and the budget proposal he's hatched for the GOP - and he's been taking a lot of well-deserved flak for embracing an agenda that Paul Krugman has correctly identified as "ludicrous and cruel" (HERE in an excellent fact-based column.)

E.D. Kain, writing at Forbes quotes one of Sullivan's readers in response:

[Ryan’s budget] is the culmination of about a thirty year Republican strategy called "starve the beast," by which Republicans have worked to reduce taxes and increase the national deficit as large as possible -  all to create the supposed "deficit crisis" that we now face and to use that crisis to eliminate programs like Medicare, Medicaid, Social Security and a slew of other programs (EPA, SEC, Planned Parenthood, collective bargaining, etc.) that the Republican class has never been able to eliminate through the democratic process.  This "starve the beast" Republican strategy has been openly acknowledged for years and I know you are well aware of it.  And the Ryan "budget plan" is transparently an attempt to cash in on this long-standing political agenda.

Interestingly, also at Forbes, last year the conservative commentator Conor Friedersdorf clearly offered an analysis that should be obvious to anyone like Sullivan who touts "fiscal conservatism" as a guiding principle. In short, "Starve the Beast" proponents - the kind of reckless "conservatives" like Paul Ryan, who voted for the Bush tax cuts and wants  even bigger breaks for high earners - are themselves responsible for the growth in debt and the ensuing obligations on average taxpayers to sustain fiscal balance over the long run, a prospect which no sane person believes can be done without increases in progressive taxation. Fiedersdorf "headlined" his piece forthrightly - "How 'Starve the Beast' Made the Taxpayer Poorer."

"There is no US federal debt crisis"

"Dangerous subversives!" or just...uh...Republicans?

Harvard professor of political economy emeritus, former aide to Pres. Johnson and consultant to the US Treasury Francis Bator states it flat out in the Financial Times: "There is no federal debt crisis (as distinct from a governance crisis and a tax-phobia crisis.)" Well worth checking out  (HERE) for some realistic perspective in contrast to the hysterics, half-truths and anti-government demagogy that are routinely injected into the  politics of deficits, taxes, spending and debt.  Key excerpts below:

The cowardice and phony "conservatism" of the GOP

(Via "Economist's View")

Bruce Bartlett, a conservative economist who has had it with the phony "deficit hawks" of the GOP who believe that cutting taxes in the face of budget shortfalls is "fiscal conservatism" rather than fiscal (and ideological) profligacy,  reports that Republican leaders have predictably caved to the "Tax Cuts Uber Alles" extremists in positioning themselves for the budget fight:

Americans for Tax Reform president Grover Norquist has received assurances from Republican leaders in Congress that under no circumstances will they vote for any tax increase, either as part of deficit reduction or tax reform. Apparently, the only permissable deficit reduction is spending cuts and the only permissable tax reform is tax cuts.

The "Logical Argument" Fallacy...

 Mark Thoma @ Economist's View:
 

 I think we make a mistake by talking about (Beltway budget battles) as though the goal of Republicans is actually deficit reduction. It's not, the goal is a reduction in the size of government and once you understand that, it's clear why Republicans will not support tax increases of any kind. 

They'd rather cut taxes now (and argue it's about jobs or long-run growth rather than ideology), and increase the deficit even more because they still believe the beast can be starved...Logic about the best way to close the deficit won't win this argument because it has little to do with the deficit itself.

Wisconsin Cong. Paul Ryan, Taxophobia & Ayn Rand

Jonathan Chait in Democracy:

Not long ago, House Budget Committee Chairman Paul Ryan—who enjoys unparalleled prestige on budget issues among conservatives of all stripes—railed against the deficit and was asked about the massive cost of extending tax cuts. He replied, “Keeping tax rates where they are, and preventing them from going up, is not spending, because that is people’s money in the first place.” What on earth could this mean? Here is the answer. Ryan has declared his deep intellectual debt to Ayn Rand (the obsessively anti-government author of Atlas Shrugged -ed.) He required all his staffers to read her work. When he responds to a question rooted in simple accounting with a moral claim (“people’s money in the first place”), he is saying that the arithmetic of revenue, outlays, and deficits does not matter to him. None of the pecuniary issues that he claims to care about so deeply ultimately matter. He is fighting a class war, which he views as a war for freedom itself. 

Rand’s passion and hate flowered in a postwar world in which the working classes were slowly drawing closer with the upper classes. The great irony of the recent triumph of her vision on the right is that it takes place in conditions just the opposite. The poor and working classes have languished for decades, while the rich pull in unimaginable sums. This is the atmosphere that has paradoxically given rise to the right’s fervid class warfare...

A "Common Sense" Guide to the Great Deficit Debate

“THE TEA PARTY IS WINNING!”
No matter how much liberals may poke fun at them, Tea Party partisans can claim victory in fundamentally altering the country's dialogue...Thanks to the Tea Party, we are now told that all our problems will be solved by cutting government programs...Does anyone really think that cutting such programs will create jobs or help Americans get ahead? But give the Tea Party guys credit: They have seized the political and media agenda...
E.J. Dionne Jr. Washington Post: 2-21-2011

In the wake of a deep financial crisis and continuing high unemployment, we are confronted with a contentious, often angry argument over our future as a nation: 

- How best to expand economic productivity and resources, and to “grow” jobs?    

- What programs and social policies do we value as citizens?  

- What public goods will we invest in? 
- How do we pay for government at a scale that we can agree we need? 

These vital concerns are increasingly reduced - problematically - to the sole issue of deficit spending.

Starving the Moral Beast!

Modeled Behavior ignores Polite Company and says something that needs to be said:

If we want to build a model of what the government spends money on we would be best to start this way: ask people what social obligations do they believe “society” has...Sum the cost of those programs. That will be government spending.

Contrary to Jonah Goldberg and others who see Canada and the United States as examples of two clashing ideologies, they are actually examples of two different ethic distributions.  The United States is not Canada because there is ethnic strife between Southern Blacks and Southern Whites. That strife reduces the sense of moral obligation on the part of the white majority and so reduces government spending. 

 Complete commentary - "Starving the Moral Beast," HERE.

Christy Whitman starved the New Jersey "beast" & teachers are supposed to pay the price...

The Washington Post, September 5, 1994:

The first thing Christine Todd Whitman did upon taking office as governor of New Jersey in January was to cut the state's income tax. Then in July, as she signed into law her first state budget, the Republican cut taxes again while simultaneously closing the huge deficit left by her predecessor.

This is what her supporters call the Whitman miracle, the fiscal accomplishment that has sent her stock soaring among New Jersey's voters and transformed her on the national scene from a political unknown into one of the Republican Party's newest stars.
…
But the key to the Whitman miracle lies neither in her political philosophy nor in her spending cuts, but rather in the fine print of her budget. Contained there is a series of arcane fiscal changes that some experts say amount to this: Christine Todd Whitman has balanced New Jersey's books and paid for her tax cut by quietly diverting more than $1 billion from the state's pension fund.

Whitman calls what she did a "reform" of the pension system that puts it on a more "sound actuarial footing." Others are less charitable. The one thing that even the actuarial consultants hired by the Whitman administration agree on, however, is that the chief effect of the changes will be to shift billions of dollars in pension obligations onto New Jersey taxpayers 15 to 20 years from now.

Well,  as Media Matters reminds us, it's been "15 to 20 years" and the blame is all on teachers and other state workers' negotiated pensions.  Has current NJ GOPer Guv Chris Christie lashed out at his predecessor, that other Christy, who set this wreck in motion - as he has at various alleged malefactors?  No - not a peep.  GOP "starve the beast" dogmas and a total lack of fiscal or moral responsibility for "Tax Cuts Uber Alles" ideology are in full effect among these craven "conservative" culprits.  Totally disgusting and utterly predictable...

Thanks to Media Matters for bringing some history to bear on present predicaments - they have the full story HERE.