(Slimy Economics) Sometimes You Gotta Know When To Call 'Em (OUT!) and This Is One of Those Times

In which, my favorite economist joins my team (finally) on the non-good-faith bargaining - purposive non-good-faith bargaining - by the GOP minions that's been going on since Obama's election.

It's not just "bait and switch" this time, you know (h/t Barbara Ehrenreich).

It's laugh in the face of the outraged (at your audacity) citizens while you're screwing them, and dare them to kick you out time.

(Because your arrogance has passed the bounds of all understanding. Except for the fundamentalists, of course.)

Pink Slime Economics

Paul Krugman

April 1, 2012

The big bad event of last week was, of course, the Supreme Court hearing on health reform. In the course of that hearing it became clear that several of the justices, and possibly a majority, are political creatures pure and simple, willing to embrace any argument, no matter how absurd, that serves the interests of Team Republican.

Fred R. Conrad/The New York Times

Paul Krugman

Blog: The Conscience of a Liberal

• House Passes G.O.P. Budget Plan, Mostly Along Party Lines (March 30, 2012)

• Editorial: A Cruel Budget (March 30, 2012)

But we should not allow events in the court to completely overshadow another, almost equally disturbing spectacle. For on Thursday Republicans in the House of Representatives passed what was surely the most fraudulent budget in American history.

And when I say fraudulent, I mean just that. The trouble with the budget devised by Paul Ryan, the chairman of the House Budget Committee, isn’t just its almost inconceivably cruel priorities, the way it slashes taxes for corporations and the rich while drastically cutting food and medical aid to the needy. Even aside from all that, the Ryan budget purports to reduce the deficit — but the alleged deficit reduction depends on the completely unsupported assertion that trillions of dollars in revenue can be found by closing tax loopholes.

And we’re talking about a lot of loophole-closing. As Howard Gleckman of the nonpartisan Tax Policy Center points out, to make his numbers work Mr. Ryan would, by 2022, have to close enough loopholes to yield an extra $700 billion in revenue every year. That’s a lot of money, even in an economy as big as ours. So which specific loopholes has Mr. Ryan, who issued a 98-page manifesto on behalf of his budget, said he would close?

None. Not one. He has, however, categorically ruled out any move to close the major loophole that benefits the rich, namely the ultra-low tax rates on income from capital. (That’s the loophole that lets Mitt Romney pay only 14 percent of his income in taxes, a lower tax rate than that faced by many middle-class families.)

So what are we to make of this proposal? Mr. Gleckman calls it a “mystery meat budget,” but he’s being unfair to mystery meat. The truth is that the filler modern food manufacturers add to their products may be disgusting — think pink slime — but it nonetheless has nutritional value. Mr. Ryan’s empty promises don’t. You should think of those promises, instead, as a kind of throwback to the 19th century, when unregulated corporations bulked out their bread with plaster of paris and flavored their beer with sulfuric acid.

Come to think of it, that’s precisely the policy era Mr. Ryan and his colleagues are trying to bring back.

So the Ryan budget is a fraud; Mr. Ryan talks loudly about the evils of debt and deficits, but his plan would actually make the deficit bigger even as it inflicted huge pain in the name of deficit reduction. But is his budget really the most fraudulent in American history? Yes, it is.

To be sure, we’ve had irresponsible and/or deceptive budgets in the past. Ronald Reagan’s budgets relied on voodoo, on the claim that cutting taxes on the rich would somehow lead to an explosion of economic growth. George W. Bush’s budget officials liked to play bait and switch, low-balling the cost of tax cuts by pretending that they were only temporary, then demanding that they be made permanent. But has any major political figure ever premised his entire fiscal platform not just on totally implausible spending projections but on claims that he has a secret plan to raise trillions of dollars in revenue, a plan that he refuses to share with the public?

What’s going on here? The answer, presumably, is that this is what happens when extremists gain complete control of a party’s discourse: all the rules get thrown out the window. Indeed, the hard right’s grip on the G.O.P. is now so strong that the party is sticking with Mr. Ryan even though it’s paying a significant political price for his assault on Medicare.

Now, the House Republican budget isn’t about to become law as long as President Obama is sitting in the White House. But it has been endorsed by Mr. Romney. And even if Mr. Obama is reelected, the fraudulence of this budget has important implications for future political negotiations.

Bear in mind that the Obama administration spent much of 2011 trying to negotiate a so-called Grand Bargain with Republicans, a bipartisan plan for deficit reduction over the long term. Those negotiations ended up breaking down, and a minor journalistic industry has emerged as reporters try to figure out how the breakdown occurred and who was responsible.

But what we learn from the latest Republican budget is that the whole pursuit of a Grand Bargain was a waste of time and political capital. For a lasting budget deal can only work if both parties can be counted on to be both responsible and honest — and House Republicans have just demonstrated, as clearly as anyone could wish, that they are neither.

UPDATE:

April 2, 2012, 8:30 am

Bonus Fraudulence

A further note on today’s column:

One impression the Ryan budget manifesto (pdf) tries to create is that the loopholes it would close — whatever they are — largely benefit the top 1 percent, so the budget isn’t really as reverse Robin-Hood as it looks.

By the way, just as an aside: Am I the only one repelled by the tackiness of Ryan’s presentations? I mean, they don’t even look like serious analyses — it’s all gee-whiz charts that look like they’re straight out of USA Today. It says something for our media culture that so many pundits mistake this for real wonkery.

But back to the main point: those numbers (which are actually about “tax preferences”) come from the Tax Policy Center (pdf). And if you actually read the TPC report, you find that the big tax preferences benefiting the top 1 percent are the preferential rates on dividends and capital gains — precisely the tax rates Ryan insists must not be raised.

Relative to the bigger fraudulence of relying on pink slime to balance the budget, this is secondary. But it’s still revealing.

Our friends at AmericaBlog have all the details about this planned evisceration of the Commerce Clause usage and the ultimate rightwing radicals' plans for the evisceration of the union.