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Author: Subject: 4 Fiscal Phonies

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  posted on 3/2/2012 at 10:43 AM

Krugman nails it again

Four Fiscal PhoniesBy PAUL KRUGMAN
Published: March 1, 2012

Mitt Romney is very concerned about budget deficits. Or at least that’s what he says; he likes to warn that President Obama’s deficits are leading us toward a “Greece-style collapse.”

So why is Mr. Romney offering a budget proposal that would lead to much larger debt and deficits than the corresponding proposal from the Obama administration?

Of course, Mr. Romney isn’t alone in his hypocrisy. In fact, all four significant Republican presidential candidates still standing are fiscal phonies. They issue apocalyptic warnings about the dangers of government debt and, in the name of deficit reduction, demand savage cuts in programs that protect the middle class and the poor. But then they propose squandering all the money thereby saved — and much, much more — on tax cuts for the rich.

And nobody should be surprised. It has been obvious all along, to anyone paying attention, that the politicians shouting loudest about deficits are actually using deficit hysteria as a cover story for their real agenda, which is top-down class warfare. To put it in Romneyesque terms, it’s all about finding an excuse to slash programs that help people who like to watch Nascar events, even while lavishing tax cuts on people who like to own Nascar teams.

O.K., let’s talk about the numbers.

The nonpartisan Committee for a Responsible Federal Budget recently published an overview of the budget proposals of the four “major” Republican candidates and, in a separate report, examined the latest Obama budget. I am not, by the way, a big fan of the committee’s general role in our policy discourse; I think it has been pushing premature deficit reduction and diverting attention from the more immediately urgent task of reducing unemployment. But the group is honest and technically competent, so its evaluation provides a very useful reference point.

And here’s what it tells us: According to an “intermediate debt scenario,” the budget proposals of Newt Gingrich, Rick Santorum, and Mitt Romney would all lead to much higher debt a decade from now than the proposals in the 2013 Obama budget. Ron Paul would do better, roughly matching Mr. Obama. But if you look at the details, it turns out that Mr. Paul is assuming trillions of dollars in unspecified and implausible spending cuts. So, in the end, he’s really a spendthrift, too.

Is there any way to make the G.O.P. proposals seem fiscally responsible? Well, no — not unless you believe in magic. Sure enough, voodoo economics is making a big comeback, with Mr. Romney, in particular, asserting that his tax cuts wouldn’t actually explode the deficit because they would promote faster economic growth and this would raise revenue.

And you might find this plausible if you spent the past two decades sleeping in a cave somewhere. If you didn’t, you probably remember that the same people now telling us what great things tax cuts would do for growth assured us that Bill Clinton’s tax increase in 1993 would lead to economic disaster, while George W. Bush’s tax cuts in 2001 would create vast prosperity. Somehow, neither of those predictions worked out.

So the Republicans screaming about the evils of deficits would not, in fact, reduce the deficit — and, in fact, would do the opposite. What, then, would their policies accomplish? The answer is that they would achieve a major redistribution of income away from working-class Americans toward the very, very rich.

Another nonpartisan group, the Tax Policy Center, has analyzed Mr. Romney’s tax proposal. It found that, compared with current policy, the proposal would actually raise taxes on the poorest 20 percent of Americans, while imposing drastic cuts in programs like Medicaid that provide a safety net for the less fortunate. (Although right-wingers like to portray Medicaid as a giveaway to the lazy, the bulk of its money goes to children, disabled, and the elderly.)

But the richest 1 percent would receive large tax cuts — and the richest 0.1 percent would do even better, with the average member of this elite group paying $1.1 million a year less in taxes than he or she would if the high-end Bush tax cuts are allowed to expire.

There’s one more thing you should know about the Republican proposals: Not only are they fiscally irresponsible and tilted heavily against working Americans, they’re also terrible policy for a nation suffering from a depressed economy in the short run even as it faces long-run budget problems.

Put it this way: Are you worried about a “Greek-style collapse”? Well, these plans would slash spending in the near term, emulating Europe’s catastrophic austerity, even while locking in budget-busting tax cuts for the future.

The question now is whether someone offering this toxic combination of irresponsibility, class warfare, and hypocrisy can actually be elected president.

 

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Maximum Peach



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  posted on 3/2/2012 at 11:18 AM
Typically, Krugman doesn't like anything that hints at real spending cuts. His Keynesian devotion to endless spending and debt is well known. His theory that most of our debt is something we owe to ourselves preys on the economically ignorant, since the way we pay back "ourselves" is through currency inflation and debasement, robbing all those "working Americans" he seems to love so much of the value of all they have tried to build. Conveniently, he never seems to address that issue. His prescriptions are just like so many we have lived with for the last 5-6 decades: throw a band aid on it for the short term with more spending, and we'll heap the future problems we create on the next poor bastards that have to deal with them.

That said, I have little doubt that the Romney/Santorum/Gingrich plans don't help the deficit problems. There's a simple reason for it: Americans would never elect someone that told them the truth about our economic plight. The social promises we have made to ourselves can not possibly be fulfilled. But no one really wants to deal with that; not the President, not most of those who want his job, and certainly not most of the American people.

 

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  posted on 3/2/2012 at 11:24 AM
Krugman is a liberal's dream because he believes in increasing the already 16 TRILION dollar debt because he believes that government creates jobs. He is a perfect examples of someone educated beyond their intelligence.

 

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  posted on 3/2/2012 at 11:29 AM
quote:

The social promises we have made to ourselves can not possibly be fulfilled. But no one really wants to deal with that; not the President, not most of those who want his job, and certainly not most of the American people.


So when are you putting Grandma on the ice flow?

The only way to solve this problem and save Grandma is to grow the economy.

How did we get out of the Great Depression?

Deficit spending.




 

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  posted on 3/2/2012 at 12:04 PM
quote:
quote:

The social promises we have made to ourselves can not possibly be fulfilled. But no one really wants to deal with that; not the President, not most of those who want his job, and certainly not most of the American people.
So when are you putting Grandma on the ice flow?

The only way to solve this problem and save Grandma is to grow the economy.

How did we get out of the Great Depression?

Deficit spending.
Ridiculous comparison. We can't spend our way out of this, nor will govt spending grow the economy. We got out of the Depression because we were the only manufacturing economy left intact after WWII. If it were not for our ability to grow our exports dramatically after the war, the last 70 years would have been hugely different.

And growing a healthy export economy again is the only path that will create sufficient wealth to remotely cover those social promises. We'll never do that with our current corporate tax policies, regulatory, or legal environment.

So Granny better hope that she's got a family that can take care of her, that her savings hold, that we don't crash the currency, or that someone(s) can change the nature and trajectory of our economy. I don't see any of those things - other than family - moving in the right direction, do you?

 

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  posted on 3/2/2012 at 12:24 PM
Krugman's an idiot, Government sucks, Obama sucks, Liberals suck, blah, blah, blah

 

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  posted on 3/2/2012 at 12:48 PM
quote:
Krugman's an idiot, Government sucks, Obama sucks, Liberals suck, blah, blah, blah

No, you're not grouchy.

 

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  posted on 3/2/2012 at 02:31 PM
quote:
quote:
Krugman's an idiot, Government sucks, Obama sucks, Liberals suck, blah, blah, blah

No, you're not grouchy.


In this case, I'm just jaded.

 

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  posted on 3/2/2012 at 03:11 PM
quote:
quote:
quote:
Krugman's an idiot, Government sucks, Obama sucks, Liberals suck, blah, blah, blah

No, you're not grouchy.

In this case, I'm just jaded.

Me too.

 

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  posted on 3/2/2012 at 05:51 PM
quote:
quote:
--------------------------------------------------------------------------- -----

The social promises we have made to ourselves can not possibly be fulfilled. But no one really wants to deal with that; not the President, not most of those who want his job, and certainly not most of the American people.
--------------------------------------------------------------------------- -----



So when are you putting Grandma on the ice flow?

The only way to solve this problem and save Grandma is to grow the economy.

How did we get out of the Great Depression?

Deficit spending.



Not exactly true. Liberals tout FDR yet have little understanding of what actually went down.

FDR ran for election in 1932 by railing against Hoover's DEFICIT SPENDING!!!

Then after being elected, before FDR began his government programs in 1932, he CUT FEDERAL SPENDING BY 25% ACROSS THE BOARD with his Economic Act of 1933. Can you imagine Obama or Pelosi or Reid or Krugman making that move?? Not a chance in hell.

FDR, no doubt, introduced many programs that helped to keep many folk's heads above water. But it did NOT solve theDepression.

In fact, I'll go further- check this out - the list of liberal accomplishments always includes Social Security, but here is the rest of the story - Social Security was brought about by FDR's Secretary of the Treasury Henry Morgenthau. Get this - Morgenthau thought that Social Security should exclude "farm workers and domestic servants from Social Security because workers outside industry would not be paying their way."

And, in a speech he gave to the Academy of Political Science in New York in 1937 while still FDR's Sec. of the Treasury, Morgenthau said,

" We want to see private business expand. … We believe that one of the most important ways of achieving these ends at this time is to continue progress toward a balance of the federal budget."

How the hell does that equate to deficit spending getting us out of the Great Depresion??

There is more - FDR's Sec. of the Treasury Morgenthau also said this in 1939,TEN YEARS AFTER THE BEGINNING OF THE GREAT DEPRESSION;

"We have tried spending money. We are spending more than we have ever spent before and it does not work. And I have just one interest, and if I am wrong … somebody else can have my job. I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises. … I say after eight years of this Administration we have just as much unemployment as when we started. … And an enormous debt to boot."



[Edited on 3/2/2012 by DerekFromCincinnati]

 

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  posted on 3/3/2012 at 12:40 AM
quote:
Krugman is a liberal's dream because he believes in increasing the already 16 TRILION dollar debt because he believes that government creates jobs. He is a perfect examples of someone educated beyond their intelligence.


You might try reading the article, Derek.....then maybe - just MAYBE - you might be able to post an intelligent response.

 

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  posted on 3/4/2012 at 03:03 PM
quote:
quote:
Krugman is a liberal's dream because he believes in increasing the already 16 TRILION dollar debt because he believes that government creates jobs. He is a perfect examples of someone educated beyond their intelligence.


You might try reading the article, Derek.....then maybe - just MAYBE - you might be able to post an intelligent response.


Nothing really unintelligent there. It's no secret that's pretty much Krugman's opinion.

 
 


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