Tuesday, April 5, 2011

Paul Ryan: Unserious on the economy

Rep. Paul Ryan wrote a piece in the WSJ today.  How's this for a great example of fantasy economics?
A study just released by the Heritage Center for Data Analysis projects that The Path to Prosperity will help create nearly one million new private-sector jobs next year, bring the unemployment rate down to 4% by 2015, and result in 2.5 million additional private-sector jobs in the last year of the decade. It spurs economic growth, with $1.5 trillion in additional real GDP over the decade. According to Heritage's analysis, it would result in $1.1 trillion in higher wages and an average of $1,000 in additional family income each year. 
Nevermind that Heritage is a right-wing think-tank that will basically concoct data to fit the needs of any Republican plan.  Even if that weren't the case, those projections would be wildly optimistic to the point of being delusional.  Where the hell are these 2.5 million jobs coming from?  Thin air?  Moreover, what reason is there to believe that the GOP wants or cares about higher wages for everyone and not just the ultra-rich?  The last decade has seen the disparity between the wealthy and the middle-class spread to insane proportions, and all the while the GOP has defended that disparity as the cost of doing business.  Yet now we're supposed to just take on faith that Ryan and Friends care.  I'll believe that when I see something more realistic than made-up fairy tale projections.  Here's a piece from The Economist pretty unequivocally popping Ryan's balloon.  Money quote:
It's an assumption, in other words, that's unrealistic enough to be considered somewhat bizarre. Everyone puts a positive spin on their policy proposals. But fundamentally worthy policies shouldn't need to promise laughably overoptimistic outcomes to win support.
That sounds like politically correct for "whoever wrote this was high when they wrote it."  When even The Economist is unreservedly criticizing a proposal so swiftly, I'm inclined to question the seriousness of the proposer.  Andrew Sullivan, who yesterday expressed some optimism about Ryan's proposal, is disappointed to say the least.
The assumption, moreover, is that major income tax cuts will dramatically boost economic growth. So why then were the Clinton years - after he raised taxes - such a success, and the Reagan years when he raised taxes such a boom, and the Bush years, with huge tax cuts paid for by borrowing from the Chinese, such a disappointment?
That's exactly my point.  This dogmatic blather from the Republican Party that ever more tax cuts, and a healthy dose of soaking the poor and middle-class, can save our economy has got to stop.  Tax increases alone won't solve the problem, but they're part of the solution.  They worked for Reagan, and they worked for Clinton.  I don't understand why the GOP is so averse.  Do they not realize that an economic turnaround under their plan would be something they could take credit for going forward, not to mention that it would, I don't know, be good for the country?  Or are they so utterly committed to the Church of Cut My Taxes that they're willing to sacrifice our economy to their ideology?

Like I've said before, you can keep putting the screws to the non-wealthy on behalf of the uber-rich and large corporations, but ultimately it's the rest of the country that buys goods and services to keep businesses operating, simply because those groups make up the vast majority of the market.  That's not a call to class warfare.  That's simply reality.  I do wish the GOP, and Paul Ryan in particular, would give that some thought.

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