Just to reiterate Bob's point that the Republicans don't care about deficits, Paul Krugman is making an effort to go over the numbers seen in Paul Ryan's Path to Poverty. And I say "making an effort," because the plan is a little fuzzy on the math and missing a lot of key details. It's not as if that comes as any shock though.
It turns out the massive new tax cuts included in the Path to Poverty, which would reduce the top tax rate from 35% to 25%, would reduce revenue by $2.9 trillion dollars, and that just so happens to be roughly equal to the amount of savings the plan proposes will be gained from cutting Medicaid and other social programs. The plan also claims that a broader tax base will somehow magically plug the holes like Mighty Puddy, but it doesn't say how.
I’ll say. In fact, the proposal says it will broaden the tax base, but says nothing whatsoever about how. And it would take an awful lot of broadening to make up for the revenue losses, which are estimated at $2.9 trillion.To be fair, $370 billion of that is taxes associated with financing health care reform, which Ryan and co. want to repeal; but then again, CBO says that repealing health care reform would add more than $230 billion to the deficit, so it’s pretty nearly a wash.
As Krugman puts it, Ryan's plan is both lax on details and filled with voodoo economics, funneling even more money to the top of the economic food-chain. It would also reduce domestic spending on essential programs to levels that quite literally aren't possible.
How ridiculous is it? Let me count the ways — or rather a few of the ways, because there are more howlers in the plan than I can cover in one column.First, Republicans have once again gone all in for voodoo economics — the claim, refuted by experience, that tax cuts pay for themselves. [...]And about those spending cuts: leave health care on one side for a moment and focus on the rest of the proposal. It turns out that Mr. Ryan and his colleagues are assuming drastic cuts in nonhealth spending without explaining how that is supposed to happen.How drastic? According to the budget office, which analyzed the plan using assumptions dictated by House Republicans, the proposal calls for spending on items other than Social Security, Medicare and Medicaid — but including defense — to fall from 12 percent of G.D.P. last year to 6 percent of G.D.P. in 2022, and just 3.5 percent of G.D.P. in the long run.That last number is less than we currently spend on defense alone; it’s not much bigger than federal spending when Calvin Coolidge was president, and the United States, among other things, had only a tiny military establishment. How could such a drastic shrinking of government take place without crippling essential public functions? The plan doesn’t say.
For the sake of perspective -- we currently spend roughly 2% of GDP on domestic infrastructure, while Europe spends 5% and China is spending 9%. Paul Ryan's Path to Poverty would see all federal spending, including defense, reduced to 3.5% of GDP, meaning infrastructure would be lucky to see levels of even 0.1 to 0.3%.That could only lead one to assume that the plan to meet our infrastructural needs is to rely on private business because, as things stand now, we are already creating an infrastructure deficit in which a lack of spending is beginning to cost the economy more money than actually fixings things would.This is not a serious deficit reducing proposal. This is not serious governance. This is a Path to Poverty for the bottom 90% and a Path to Royalty for the top 10%I think it's safe to say that feudalism is now the official Republican party platform for 2012.