What’s at Stake in Ryan’s Budget

April 5th, 2011 at 8:03 am | 47 Comments |

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Tomorrow, Rep. Paul Ryan will release his highly anticipated budget plan.  Early reports suggest that along with serious changes to Social Security and Medicare, the budget will trim nearly $4 trillion from the 10-year budget deficit.  I don’t know how the Left will react, but I’m confident that they’ll overreact.  And I’m hoping that when the dust settles, we’re having a more intelligent conversation about spending cuts than we’ve had during my lifetime.

Of all the things I can’t stand about politics, the tendency to emotionalize a difficult topic is probably the worst.  Budget cuts hurt—just ask our friends in the United Kingdom.  But budget cuts are coming, because our entire welfare system depends on a false premise: a rapidly growing population.  It’s a pretty simple concept: the taxes from young workers support the benefits of elderly dependents, so the system works fine so long as the young significantly outnumber the old.  Our system is stressed because the number of retirees is growing at a faster pace than the number of workers.  And America is actually relatively lucky; most countries in Western Europe face a far more serious population problem than we do.

I doubt, however, that I’ll hear many Democratic politicians acknowledge this fact after Ryan releases his budget.  I expect to hear, instead, horror stories about budget cuts and how they lead to starving schoolchildren.  The irony is that the Left’s overheated reaction to budget cuts is rooted in a legitimate worry about America’s growing income inequality.  On this point, the Left is right.  The United States has one of the lowest rates of social mobility in the industrial world, a stark difference compared to only a few decades ago.

But the real inequality in this country is not between rich and poor in 2011, but between the middle class of 2011 and the middle class of the future.  Edmund Burke argued that society was a compact between those who are living, those who are dead and those yet to be born.  Without serious budget cuts, America will transfer trillions of dollars from the yet to be born to the living.  Every dollar spent is a dollar that must be taxed, and the Left seems oblivious to the fact that the tax burden of today’s profligacy will fall hardest on future citizens. How’s that for wealth redistribution?

The other answer, of course, is to raise taxes on people now.  That’s not a great idea, as economists from across the political spectrum argue that raising taxes in the midst of a recession is bad for growth, and growth is the one thing that can close the budget gap faster than entitlement reform.  More importantly, increased revenue will only take us so far—with a projected deficit of well over $1 trillion next year, a return to pre-Bush era tax rates would fill, at best, about 10 percent of our current fiscal hole.  I am not one of those conservatives who shudders at any mention of tax increases, but like every thoughtful American, I realize that soaking the rich is a painfully inadequate solution.

The way forward is as obvious as it is politically difficult: streamline the tax code, reform current entitlements and avoid enacting new ones.  But the possibility for any meaningful change depends on the Democratic reaction to Ryan’s new budget.  I hope that Ryan’s budget starts a needed conversation.  But what we’ll probably hear is scare tactics and assurances that the same old Republican brand of politics will hurt the same old Democratic constituencies.  And the whole time, I’ll be thinking to myself: if these people gave a damn about inequality in this country, they’d be leading the charge for budget cuts instead of opposing them.


Recent Posts by J.D. Hamel



47 Comments so far ↓

  • Smargalicious

    if these people gave a damn about inequality in this country, they’d be leading the charge for budget cuts instead of opposing them.

    To a Democrat, everyone on public assistance is a vote. That’s why they enjoy enslaving the masses to birth-to-death entitlements.

    God help us.

    • ram6968

      soaking the rich is a painfully inadequate solution……heaven forbid they should pay their fair share….

      • abrady

        Yes, just having had my taxes done– the fact that the rich and the corporations of this country pay far less (%) than my husband and I who have worked at our jobs for over 30 years and together earn barely 6 figures, I Will Never Support the GOP. They pander to the the wealthy and corporate America.

        Now, they are going after my retirement and medical coverage that I need for retirement instead of making the wealthy pay their fair share, you have got to be KIDDING!

  • ottovbvs

    You have to wonder how well equipped Mr Hamel is for Yale Law when he produces examples of muddled thinking like this in two succeeding paragraphs:

    The irony is that the Left’s overheated reaction to budget cuts is rooted in a legitimate worry about America’s growing income inequality. On this point, the Left is right. The United States has one of the lowest rates of social mobility in the industrial world, a stark difference compared to only a few decades ago.

    VERSUS

    But the real inequality in this country is not between rich and poor in 2011, but between the middle class of 2011 and the middle class of the future.

    So in summary we have probably the highest levels of income inequality and lowest social mobility in the industrialized world and they have been getting worse for thirty years but this isn’t the real problem. The real problem is not the present but the future inequality between rich and poor. Mr Ryan is going to solve this problem by dismantling Medicaid (whose principal beneficiary is the poor); dissolving Medicare (whose principal beneficiaries are the working class, the middle class and the lower rungs of the upper middle class); and cutting further the taxes paid by the wealthy and corporations .

    Somehow I don’t think this is going to pass muster at his Yale legal logic classes.

    • ksl

      Otto, you seem to be having a problem with these two statements, so let me walk you through this.

      The United States has one of the lowest rates of social mobility in the industrial world, a stark difference compared to only a few decades ago.

      But the real inequality in this country is not between rich and poor in 2011, but between the middle class of 2011 and the middle class of the future.

      We have extremely high levels of inequality now. However, there is, and will be, a much greater inequality between the middle class of the present and the future (unless we take certain painful steps now). Thus the basis for Hamel’s second statement.

      BAM! Mystery solved. Don’t thank me, thank logic.

      Of course, you can disagree with his premises, but that isn’t a problem with his logic.

      While we’re at it, since you’re so concerned with logic, I’m surprised the vast majority of your comments resort to ad hominem attacks against Hamel rather than actually addressing the substance of his argument. You would know this wasn’t OK if you actually understood the basics of logic. Dumbass.

      *EDIT*: I was using that last phrase ironically, but judging by your grasp of basic logic, I’m not sure it was wise of me to throw irony into the mix. My apologies.

  • TerryF98

    “But what we’ll probably hear is scare tactics “

    Like “Death Panels”.

  • armstp

    This is a complete moronic one-side post and very disingenuous.

    “our entire welfare system depends on a false premise”

    This line says it all. This is not a “more intelligent conversation” by this author. By framing the entire government or the social safety net, as a “welfare system”, he has just revealed himself to be nothing but an ideologue. For example, Social security is an earned benefit. It is a very effective way for people to save money for retirement. It is not “welfare”. Not even close. This moron has not a clue with what he is even talking about.

    Mr. Hamel, those same demographic trends are all over the world. Why do they not have the same budget/deficit problems and why is the debt and defict not made as big a problem in the press and amongst politicians in other countries, although many have even higher levels of total debt than in the U.S.?

    It is because all other countries are not afraid to raise taxes. We could easily solve the deficit by simply raising taxes. That is what all other countries are doing. Problem solved. Tax collection in this country is at its lowest level since the 1950s.

    “Budget cuts hurt—just ask our friends in the United Kingdom.” The U.K. also raised taxes.

    Frankly, the deficit and the debt is not a problem. The deficit is currently high because of the drop in tax revenue from the recession and the Bush tax cuts. The CBO is predicting with some modest continuing economic growth the deficit will be back to more normalized levels by 2015 and that is without doing any spending cuts whatsoever. We will also grow into our total debt over time.

    You cannot cost cut your way to a strong and vibrant economy. Cutting things like education and R&D will do more long-term damage to this country.

    “That’s not a great idea, as economists from across the political spectrum argue that raising taxes in the midst of a recession is bad for growth,..”

    So you are willing to massively cut spending, which economist tell us has a more direct negative impact on the economy than raising taxes, but you will not consider raising taxes because you think it will hurt the economy. That seems hypocritical.

    Here is the solution for you Mr. Hamel. How about we do nothing. No increased taxes and no spending cuts till 2012. We let the economy recover for the next two years, which is the best solution for solving the deficit problem. Then in 2012 we let the Bush tax cuts expire, which will solve more than half the deficit problem and then we can think about cutting some spending. By that time we will be out of Iraq and winding down in Afghanistan, so we can make some big cuts in defense spending. Then we can look at healthcare costs, etc.

    “…return to pre-Bush era tax rates would fill, at best, about 10 percent of our current fiscal hole.” I am not sure what numbers you are reading, but if you look at the CBO analysis a big part of the deficit going forward will be because of the Bush tax cuts.

    Ryan’s first Roadmap was a farse. I suspect his budget proposal to also be a farse. Only morons take Ryan seriously. That guy is nothing but a showboat. Ryan has done absolutely nothing since he has been in congress. He just comes up with these flimsy small government far-right propaganda pieces. He does not seriously work hard to pass bills and actually do some legislating. Can you name one bill that Ryan has gotten passed in the U.S. government?

    • ottovbvs

      [b][/b]“Budget cuts hurt—just ask our friends in the United Kingdom.” The U.K. also raised taxes.

      Hamel is also a bit out of date on his UK politics. Only yesterday because of a huge uproar in the country and parliament the Cameron govt applied the brakes to it proposed overhaul of the NHS even though the bill is halfway through parliament. They are going take a natural break in proceeding with the bill apparently.

  • Xunzi Washington

    When Mr. Hamel is done wringing his hands, I’d like him to answer three questions:

    1. Are Ryan’s revenue numbers based on a Heritage study that predicted massive increases in revenue based on the Bush tax cuts only to see revenue actually drop off? That study?

    2. Since you are concerned that Democrats will complain that this hurts their constituencies, and you think that’s “just politics”, please point out where this proposal asks Republican constituencies to sacrifice. It makes no changes to Medicare for those 55+, and slashes tax rates for those in the upper income brackets.

    3. Explain how Ryan’s proposal addresses rising medical _costs_. It seems to me that what it does is address govt spending on health care, not address medical costs themselves. Instead, it slowly leaves seniors to fend for themselves as their vouchers become less, and less, and less useful as they are eaten away by skyrocketing medical costs.

    4. Explain why huge slashes to Medicaid should be viewed as bad government spending. I believe the stats show that the vast majority of Medicaid spending is used up by (a) the elderly, (b) the disabed, and (c) children. A small proportion left over are able adults. Also, explain how these cuts in any way would affect Republicans supporters, and explain how you will spin those cuts. Let me guess: people on medicaid are lazy.

    Can you explain those for me without hand wringing?

  • indy

    I don’t know who this guy is but I’ve read more substance in an ad on craigslist.

    • ottovbvs

      God knows how this guy got into Yale Law. He demonstrates as much intellectual horsepower as some of the usual suspects that post here.

  • ottovbvs

    Looked at from a purely political standpoint the timing of this announcement suits the president down to the ground as he heads into the shutdown fight. In the public mind the proposals to dismantle Medicare/Medicaid are all going to confused with the minutiae of the budget reductions for 2011. Medicare/Medicaid was what the 1995/96 shutdown battles were all about. I honestly wonder if Boehner is on top of the small print of what Ryan was going to propose.

  • TerryF98

    “Mr. Ryan’s proposal would apply to those currently under the age of 55, and for those Americans would convert Medicare into a “premium support” system. Participants from that group would choose from an array of private insurance plans when they reach 65 and become eligible, and the government would pay about the first $15,000 in premiums. Those who are poorer or less healthy would receive bigger payments than others.”

    People who are insulated from the realities of buying their own insurance probably think that $15K is a lot of money, but I’d bet no insurance company would be willing to underwrite a policy similar to Medicare for $15K today, much less a decade from now. And how does the government determine who’s “less healthy”? Perhaps there’s a panel somewhere that’s going to make that decision.

    This makes Social Security privatization, which is part of the reason Republicans lost the House in 2006, look like a very modest proposal. The ads write themselves, and for once they’re aimed at the under-55 crowd that’s more likely to vote for Democrats.

  • TerryF98

    For the fact challenged among us here are the drivers of debt currently, you will see that if you take out the bush tax cuts and the cost of Bush’s wars the picture is entirely different, which it should be as we would be getting back to the fiscal success of the Clinton years before the GOP exploded the deficit.

    • armstp

      Terry,

      And don’t forget the impact of the economy on the deficit. 40% of the increase in the deficit was likely because of the economic downturn. With the recovery in the economy a big part of the deficit will just go away. That is what the CBO is predicting.

  • TerryF98

    I am going to keep posting this breakdown of where the debt actually came from so we have a point of reference.

    • ksl

      Gee, Maw! Looks like TERRYF98 forgot that Congress controls the purse strings, leaving out a huge chunk of the picture!

      I don’t buy the “Democrats are the big spenders and Republicans are the opposite” stereotype either, but let’s not resort to disingenuous one-sided images lest we come out looking like we didn’t pay any attention during U.S. Government in high school. In the period from ’95 to ’00, the period of huge debt decreases, Republicans controlled Congress. I’m not trying to downplay Clinton’s role in reducing the national debt, but maybe you should use an image that provides a more accurate picture.

  • Reflection Ephemeral

    Paul Ryan is a Republican, so he doesn’t have policy preferences.

    He certainly doesn’t care about the deficit– his “Roadmap” would continue to add to the deficit until 2063, even though he was allowed to completely make up the plan’s revenues out of thin air. See Appendix II at his site: http://www.roadmap.republicans.budget.house.gov/Plan/#appendix2

    He also voted for Medicare Part D, and opposed allowing the government to negotiate prices on drugs. See: http://www.joepaduda.com/archives/002019.html

    Paul Ryan doesn’t care about the deficit.

    This article is about the supposed long-term budget crisis; but the rhetoric we hear from Ryan & the GOP is about the supposed current budget crisis. “We’re not sure just what the problem is, or why, but we do know this: we need to cut taxes on the wealthy and make life more difficult for the bottom 90%. Vote GOP!”

    ADDED: Of course, if we cared about balancing the budget, we could do so pretty easily. Return tax levels on income earned above $250K to surplus-era levels, draw down our foreign occupations, and we’re getting there: http://www.nytimes.com/interactive/2010/11/13/weekinreview/deficits-graphic.html?choices=809205qv

  • armstp

    You cannot have a genuine discussion on the deficit and debt if you do not equally consider both the revenue side and the spending side of the equation. If you only consider one side, then the solution will never work and you are just a partisan ideologue. By the Republicans only arguing the spending side and in fact going further and suggesting even further tax cuts, what they are really doing is using the deficit and debt as cover as they are really just pushing their small government or no government agenda and ideology. This Republican argument really has nothing to do with the deficit and debt.

    I would also argue that the deficit and debt are really not big problems and there is no need for massive urgent action. As the economy improves the deficit will largely go away and we will grow into the total debt. CBO is predicting with no cuts in spending the deficit will be back to more normalized levels by 2015. I really do not see what all the fuss is, other than the Republicans trying to make the deficit and debt into a massive political issue, which I think in the end will actually be the same as them shooting themselves in the foot.

    • ottovbvs

      Ryan apparently says we don’t have a revenue problem we have a spending problem. His plan actually reduce tax revenue. All that said the budget is not going to return to balance entirely as a consequence of economic recovery. The deficit is $1.5 trillion or roughly 10% of GDP. It needs to be around 4% of GDP or $600 billion. Improved tax receipts are only going to produce +/- $400 billion. So where’s the other $500 billion coming from? Most of it is going to have to come from tax increase and the lapse of the Bush cuts, and the rest from some modest cuts in programs and defense. None of this is rocket science.

  • cz4ever

    I also hope that the Ryan plan starts an intelligent conversation on the future of the federal budget, but I doubt it. Despite claims to the contrary, it seems fairly unserious to me because (i) it essentially ignores Defense spending and (ii) it does not include significant revenue-increasing tax reform. Proposing $4T in cuts that almost exclusively hit Democratic priorities (Social Security, Medicaid, and Medicare) and leave Republican priorities (Defense, low taxes, corporate subsidies in the form of tax expenditures) untouched is a negotiating position, not a serious proposal. If it’s treated as a negotiating from which “serious” Republican negotiators are willing to compromise, then it’s (imho) perfectly reasonable. If it’s treated as a “my way or the highway” position, similar to the current $61B HR 1 proposal, then it’s a waste of paper and ink.

    > But what we’ll probably hear is scare tactics

    Sadly, I expect this is true. But if Ryan’s Medicare proposal is demagogued, it’ll be hard to build up any pity given that it is essentially Obamacare (or Romneycare) for seniors, and we can all remember how reasonably Republicans treated Obamacare while it was being debated.

    Personally, if both sides were serious and willing to compromise, there does seem to be a clear path to success. The President’s Commission Report is a very good starting point. To his shame, Rep. Ryan did not vote in favor of it (another sign that he isn’t as serious about getting the budget mess under control as some of his supporters claim). What is needed is a mix of:

    1. Cap on discretionary spending — whether at the 2007 or 2010 level hardly matters in the big picture. Allow Congress and the President to figure out how best to divvy it up — I would hope for a large investment in research and development (esp. energy and IT R&D), infrastructure (roads, bridges, dams, …), and education (related to which are serious non-budget issues regarding how best to deliver high-quality education on a limited budget).

    2. Substantial, but gradual, defense cuts as we wrap up the missions in Iraq, Afghanistan, and Libya. Although Obama’s careful, multi-national approach in Libya is fairly unsatisfying, it is a heck of a lot cheaper than when we play the world’s policeman. Sadly, defense spending is a favorite place to stick in congressional goodies (unneeded hardware, keeping unneeded bases open, etc.).

    3. Entitlement reform: The third rail of politics. Personally, I think something like Ryancare+Obamacare would be fine, but think there needs to be a public option or serious cross-state non-profit pools to keep the costs down. I like Ryan’s notion that the less well off get larger subsidies.

    4. Tax “reform” (silly euphemism): Let the Bush tax cuts on the most wealthy end in 2012 (even though it hurts me personally!). Serious reform of business tax code (much lower rate in return for eliminating essentially all write-offs). Personally, I think something like a carbon tax with appropriate waivers to help heavy carbon industries convert to more carbon-friendly technologies over time, would both bring in needed income and help “bend the curve” on us reducing our dependence on foreign energy sources.

    5. Agriculture subsidies: Buh-bye. Given the high cost of agricultural commodities right now, with no clear end in sight given the increase in incomes in the undeveloped world, there is no need for more than insurance-type support. Definitely end ethanol subsidies (good luck w/ Iowa playing such a pivotal role in Presidential politics).

    At least in public, the President has not been out in front of this issue like he really should be. But after seeing Obamacare unfairly blasted and smeared, I can hardly blame him. Sadly, I suspect Ryan is about to get the same treatment. Better to keep the serious negotiations behind closed doors where (I HOPE) the negotiators can quit trying to cater to their (often unrealistic) bases (for example — note to fellow citizens: foreign aid is 1% of the budget, not 20%…). But then again, I’m an eternal optimist…

    • tommyudo

      In a sensible and rational world CZ4Ever’s list of proposals make eminent sense, but unlike him, I’m not the eternal optimist. We have one political party whose base in either clinically and/or religiously insane, which makes compromise unfathomable. We are headed towards irrelevancy, as Asia and Europe will pass the US up in technology and education (which is already a fact) , but that might not be such a bad thing. It will eventually whittle down our collective exceptionalist arrogance as the world’s policeman and stop the yahoos at the Olympics yelling into the TV cameras “We’re number 1.” Then we can get back to re-making ourselves like this country did after the Civil War.

    • think4yourself

      I agree with CZ4EVER.

      If Ryan wanted a serious conversation about deficit and budget, he would have done so as part of the Debt Commission. Instead he was a no vote to ensure that the Bi-Partisan ideas did not reach the Congress. Instead, his plan which is imminently partisan did. The GOP is not really interested in cutting spending (witness their attacks on “Obamacare” that it would cut 500Million from Medicare). They are interested in advancing GOP platform items.

      I want a balanced budget and am willing to accept both spending cuts that affect me and tax increases that affect me – the GOP believe that only their ideology counts and I disagree.

  • Frumplestiltskin

    well, pretty much everyone else destroyed this young pup’s crummy post. This reads like something an 18 year old would write so I guess he must be some unpaid intern at Frumforum.

    Look at this last line, it is hilarious: And the whole time, I’ll be thinking to myself: if these people gave a damn about inequality in this country, they’d be leading the charge for budget cuts instead of opposing them.

    Yes, the best way to resolve racism is by being even more racist, the best way to show you care about income inequality is to make things even more unequal.

    Might I remind this boy writer (since he was not but a baby) the under Clinton tax rates were higher, the trends in inequality were reversing, and the budget had a surplus. While I agree we can not raise taxes now as long as the economy continues to improve as it has in 2 years we can let Bush’s tax cuts expire and eliminate half the projected shortfall. There should be some reforms of Social Security and there will be, but it is likely to be half tax raises and half long term cuts.

  • Rabiner

    To the Author:

    “But the real inequality in this country is not between rich and poor in 2011, but between the middle class of 2011 and the middle class of the future. Edmund Burke argued that society was a compact between those who are living, those who are dead and those yet to be born. Without serious budget cuts, America will transfer trillions of dollars from the yet to be born to the living. Every dollar spent is a dollar that must be taxed, and the Left seems oblivious to the fact that the tax burden of today’s profligacy will fall hardest on future citizens. How’s that for wealth redistribution?”

    How are you so easy to write off the poor and income inequality when the previous paragraph mentions the problem of income inequality and lack of social mobility?

  • ottovbvs

    BTW if anyone is in any doubt that the Republican chattering classes at least are going to bet the farm on this plan of Ryan’s just read the tweets on the right.

    • TerryF98

      I keep tabs on what these fools say, and it’s like looking at the RW noise machine in real time. They all say the same thing at the same time. It’s like the Borg of politics. Really funny to watch.

      • ottovbvs

        Come out on the ice boys and girls. It’s safe. Trust me. You’ve nothing to worry about.

  • Watusie

    “serious changes to Medicare”

    Indeed. He is proposing eliminating it. I’d say that is a serious change.

  • indy

    Well, I sure hope Ryan can explain to me how shifting all price change risk to old people in a market where their choices as consumers are guided by the very people who have a financial stake in (over)consumption of that market is a good idea. The government has to have a substantial stake in medical care costs for there ever to be a chance of containing them.

  • Polaris

    Shorter budget summary : Screw the poor and elderly as long as some rich assholes are fine

  • larry

    Ryan’s scheme would leave seniors with a 15k health insurance policy and a 6k voucher to pay for it. Good luck with the conversation. Ryan will have to leave the room if infantile contributions are to be avoided. He appears to be the current GOP version of the proverbial serious man. Eisenhower turns at Gettysburg.

  • JD Hamel

    So I always try to reply to a few comments. Here goes:

    A slight mea culpa for not being more specific about the Bush tax cuts’ effects on the deficit. First, their effect is smaller in 2011-2012 than the CBO projection over the long term, but the more pertinent fact is that “soaking the rich” won’t work. What I mean is that I’ve never seen anyone suggest a full expiration of the Bush tax cuts–the proposals instead focus on letting the top rate cuts expire. The full cuts add about $4 trillion to the debt over the next 10 years; eliminating the “tax cuts for the rich” only deals with about a third of that figure. A 10-year debt reduction of $1.3 trillion (give or take) is not a legitimate prescription for our fiscal crisis.

    Income inequality is a problem, and I wanted to mention it and give credit to the Left for keeping everyone’s eye on the ball. However, wealth transfers from the old to the young are just as morally problematic, and without a massive change in the way we structure our social safety net, will exist on a scale that totally dwarfs today’s inequality. Serious studies suggest that the gross majority of the rise in income inequality is due to income gains at the very top–most notably in the financial sector. That problem was not the focus on this post. What I perceive to be a more serious issue–massive wealth transfers from the old to the young–was.

    The economic impact of tax increases versus spending cuts is a matter of serious debate among economists. The worst thing I’ve noticed about the modern Left is its tendency to assume that every word uttered by Paul Krugman is unassailable economic truth. For a measured discussion of how tax cuts and spending increases affect economic growth, read Krugman, by all means–but take a look at Mankiw, Barro and Christina Romer, too.

    Finally, the tone of the comments reinforced my rather low expectations of how people would react to Ryan’s proposal. There are tons to quibble with in the details, and I’m glad that people are engaging with the proposal’s substance. But the fact remains: the way we fund entitlements is based on a population growth model that does not match reality. The picture is bleak over the next decade; after that, it’s downright scary. I think Ryan’s proposal acknowledges that fact, and for that, I admire him.

    • indy

      Yes, by all means let’s pay attention to Mankiw. Wait, I think we did already, didn’t we? How’d that turn out again?

    • ottovbvs

      The worst thing I’ve noticed about the modern Left is its tendency to assume that every word uttered by Paul Krugman is unassailable economic truth

      Well would you like to tell us where Krugman is actually wrong on the fundamental issues of deficit spending in a recession; liquidity traps; massive shifts in US income inequality; where dealing with the deficit fits into our priorities; the nonsense that is supply side economics? I’m not going to hold my breath.

    • think4yourself

      A. I would end the entire Bush tax cuts at all income levels (with some modification for estate tax so that those who enheirit businesses or farms have the ability to continue them without having to sell them or leverage them to pay huge estate taxes).

      B. I do think we should address that people live longer and as long as they are healthy perhaps should work longer. It is true we are transferring tax reciepts from young people to old and that has consequences on our ability to be competitive in the future.

      C. Nothing in the Ryan plan addresses medical costs & quality of care – these are difficult conversations that need to be had.

      D. I am open to cuts on Democratic projects along with tax increases on the middle class (for the last 2 years a family of 4 making $50K per year is paying no Federal income tax), but we also need to address tax policy on the upper end of the scale (business subsidies, capital gains, etc.) as well as GOP priorities (Do we really need to spend more on our military then almost the entire rest of the world combined?).

      I see no GOP desire to compromise with the other side on any issue. Remember GWB’s immigration policy? The one John McCain was for, before he was against it?

    • Reflection Ephemeral

      Thanks for wading into a pretty hostile comments thread to continue the discussion.

      I’m glad that you’re not dismissing the importance of the growing inequality in the US. Why, may I ask, have you concluded that it’s less important than “massive wealth transfers from the old to the young”?

      The issue with Medicare long term is the issue with the US economy long term: the US-only skyrocketing in health care costs. You may recall that health care was a rather large topic of discussion around here last year. And in response to the Heritage Foundation-based health insurance reform plan, what did Paul Ryan do? Why, he criticized the president, repeatedly, for daring to cut funding to Medicare. See: http://thinkprogress.org/2011/04/05/ryan-repeatedly-medicare-cuts/

      Ryan also voted for the Bush tax programs. And Medicare Part D.

      We are where we are because Paul Ryan put us there.

      Now his solution is to end Medicare in order to shovel more money to the top 2%.

      He’s not an honest broker, he’s not an honest observer, he hasn’t offered any honest solutions. (When he doesn’t like the CBO’s numbers, he simply inserts others, without explaining where they come from: http://tpmdc.talkingpointsmemo.com/2011/04/gop-budget-ditches-cbo-to-claim-health-care-repeal-will-reduce-the-deficit.php?ref=fpa ).

      No one who cares about the deficit likes Paul Ryan’s record or ideas.

      • Claude

        And when will we get the Congressional Democrats’ or Obama Administration’s counterproposal? Or have they given up leadership and just want to try opposition instead?

  • Xunzi Washington

    Whoa.

    Personally, I say let all the tax cuts expire. But that to the side: did you honestly say that a 1.3 T reduction in the deficit over 10 years is not significant? Are you kidding? I don’t think anyone has said that it “solves the problem”. But it would go a long way towards helping the situation. Moreover, raising the tax rate to what it was under Clinton – and better than it was under Reagan, is hardly “soaking the rich”. Please. Where did I put my little violin? And since you care so much about revenue, what study supports Ryan’s claims? Where is it? Is it the Heritage foundation’s one that argued that the Bush tax cuts would lead to higher revenue? Did that happen?

    And again: how does Ryan’s proposal address health care costs? It doesn’t.

  • Frumplestiltskin

    “However, wealth transfers from the old to the young are just as morally problematic”
    Where the hell is there a wealth transfer from the old to the young? And not only is it not morally problematic, it is a moral imperative that we take care of the young. Actually, the moral imperative mostly is the middle take care of both the old and the young. That is what nature intended and is precisely what we must do.

    “The worst thing I’ve noticed about the modern Left is its tendency to assume that every word uttered by Paul Krugman is unassailable economic truth.” Shameful strawman. Absolute horseshit. Krugman is a nobel prize winner in economics but I would never claim he holds unassailable truth and I defy this pup to show me anyone who does.

    And of course Hamel is ignoring the most salient aspects of Ryan, it is not the cuts, it is his desire for later huge and regressive tax cuts. Hamel utterly ignores this, pretends it doesn’t even exist. He is, in fact, a fraud as a writer.

    Here is Chait:

    Liberals are kind of short-circuiting in response to Paul Ryan’s “Path to Prosperity,” which contains so many bad Republican economic proposals in one place you don’t even know what to say about it. But there’s really one clear issue here that encapsulate both the intellectual and the political vulnerablity of the plan: It contains a massive, regressive tax cut.

    Ryan does not want to talk about the tax cut. His video touting the plan focuses entirely on the debt, and makes no mention whatsoever of the tax cuts
    Ryan doesn’t mention the tax cuts, of course, because they unravel the entire rationale for his proposal. Americans overwhelmingly oppose cuts to Medicare and Medicaid. Ryan understands he can only make his plan acceptable if those cuts are seen as necessary to save the programs.

    And certainly some level of cutting is necessary. But Ryan’s level of cutting goes far beyond what’s needed to preserve those programs, and it does so in order to clear room for a very large, regressive tax cut. He is making a choice — not just cut Medicare to save Medicare, but also to cut Medicare in order to cut taxes for the rich.

    Ryan does not want to debate that choice, but he ought to be forced to do so. That is exactly what Bill Clinton did to defeat the Republicans in 1995. Indeed, the debate was virtually identical. Republicans insisted the debt constituted an existential threat. They proposed to “save” Medicare by privatizing it. And Clinton pointed out that their plan cut Medicare in order to finance a regressive tax cut. He won the argument because Medicare is highly popular and tax cuts for the rich aren’t.

    Indeed, the divide on this issue is so overwhelming that Republicans simply refuse to acknowledge their position. The standard GOP approach to budget debates for twenty years has been to vigorously isolate debates about taxes and debates about spending. If presented with a question that ties together debates about taxes and spending, Republicans will automatically deny the premise, and recontextualize taxes as a question of economic growth or abstract fairness. The two can never be discussed in tandem, because doing so clarifies a choice Republicans need to obscure.

    The response to Ryan’s budget is really simple. He cuts Medicare and other vital programs in order to finance a huge tax cut for people who don’t really need it. That’s the point Republicans don’t want to defend but should be forced to.

  • Frumplestiltskin

    “The picture is bleak over the next decade; after that, it’s downright scary. I think Ryan’s proposal acknowledges that fact, and for that, I admire him.” More absolute horseshit of the “the sky is falling, the sky is falling” variety.

    Republicans also claimed Clinton’s tax hikes in 93 would cause a depression, what we got was a roaring economy with budget surpluses. Young Hamel is claiming to possess some magic 8 ball telling him the long off future. He mentions demographics, yet is not aware the US can increase H1B visas for immigrants at any time (oh, wait, can’t have any furriners in America)

    Ryan is a hack, and so is Hamel. Freaking disgraces.
    If Medicare vouchers are good, do them now…don’t wait 10 years…it is a fraud, nothing more, in order to institute tax cuts for the rich now as in…see, in 10 years it will all be paid for.

    Myself, I would favor a pilot program to try out these magic vouchers, allow seniors to voluntarily accept them and see how it works. (since I know it won’t, I say we can prove it and shut Ryan up for good, if we are wrong then I would be happy to be proven wrong) The poor young pup Hamel can’t conceive of this. It is all or nothing.
    I would also like to see the retirement age lifted to 70 (it is 68 already for people born after 1962) for people born after 1980, adjust the Cola for seniors to accurately reflect their inflation rate and discount housing, this will save a great deal long term. We can also raise the cap for the exemption for SS taxes from 100 to 150K. That and re-institute Clinton’s tax rates would go a very long way.

    Ryans main proposals are dead on arrival and will forever stay dead. It is pure bullshit. And don’t pretend that he was the first to suggest raising the age for retirees, it has been done before by many.

    • ottovbvs

      Ryans main proposals are dead on arrival and will forever stay dead. It is pure bullshit.

      True…but in the process he’s hung a huge target on the GOP’s back. Democrats must have been hugging themselves with glee when they read this.

  • kylemw68

    I think I too shall jump on the non-sequitur train:

    Can we just base retirement time on number of years worked and not on actual age? If you start working at 18, you get to retire by the time you are 68. If you delay work until you are 26-30 because you are in law/grad/med school, you can retire sometime between 76-80.

    Ironically, this corresponds well with how long people are expected to live. High school education –> dead at 68. College education –> dead at 73, advanced degree –> dead at 78.

    I know the idea of delaying retirement is mostly to delay collection of benefits, but it also misses out on collecting taxes during what would be good income years, especially since those who live long enough to work at age 70 are likely to have had pretty good jobs. The rich (those rascals!) avoid taxes by going to college and delaying earning an income, then have the nerve to retire at the same time as poor people. The noble poor pay taxes from their 18th birthday onward. Sadly, they only manage to do so for about 50 years before dying, and they never really earn much taxable income anyway.

    Wait a second… like so many others it seems I’ve forgotten who I was originally mad at.

    • ottovbvs

      Can we just base retirement time on number of years worked and not on actual age?

      Would that it were that simple. A lot of people are compelled to retire or are laid off at 65 or earlier because they tend to be higher paid, less cute, sleepier and for various other reasons. Companies that are downsizing don’t tend to aim buyouts at 30 year olds. They are also the people that tend to become part of the long term unemployed because it’s much more difficult to start a new career or get a new job at 61.

  • trk113

    Lots of half truths here. Yes, raising taxes during a recession cuts demand because most people have less. That is not the case here and now. The increases that are being suggested are for the top earners who have way more discretionary spending than they need. It should not have any meaningful impact on spending at all.

    There is also a false choice about what we can afford. It is not a matter of there being no money. It is more a matter of spending money stupidly. We can’t afford to subsidize education, but we insist that we must spend as much on our military as the rest of the world combined. Nonsense. We can’t afford to continue to pay for hungry poor children, but have no trouble subsidizing multinational corporations who are busy shipping manufacturing (and now service) jobs overseas. It is a question of priorities. I am anxiously awaiting our government starting to think what it can do for us rather than what it can stop doing for us so that they can continue to help the people who really don’t need help.

  • ottovbvs

    The worst thing I’ve noticed about the modern Left is its tendency to assume that every word uttered by Paul Krugman is unassailable economic truth

    Well would you like to tell us where Krugman is actually wrong on the fundamental issues of deficit spending in a recession; liquidity traps; massive shifts in US income inequality; where dealing with the deficit fits into our priorities; the nonsense that is supply side economics? I’m not going to hold my breath.

    Needless to say Hamel has no response….that involves reasoning

  • valkayec

    Most of Matt Yglesias’ blog today features posts about Ryan’s plan. It’s worth reading all of his posts today for analysis from a different, but still rational, point of view. http://yglesias.thinkprogress.org/

    It’s also worth reading Ezra Klein today for another take on Ryan’s plan: http://www.washingtonpost.com/blogs/ezra-klein Take particular note of the charts.