Krugman Calls House Fiscal Plan “The most fraudulent budget in American history”

Tuesday, April 10, 2012 at 2:12 AM by

Economist Takes Ryan to Task for Unrealistic Claims that His Budget Would Reduce the Deficit

I’ve often wondered why Rep. Paul Ryan remains a relatively popular politician in Wisconsin and elsewhere, despite the fact that public opinion polls indicate that there is strong support for many of the federal programs that he proposes to slash. A New York Times column today by Nobel Prize winning economist Paul Krugman tackles one aspect of that subject – which he refers to as the “Ryan Cult.”

Krugman says that what’s particularly interesting about the Ryan “phenomenon” or cult is “the way self-proclaimed centrists elevated him into an icon of fiscal responsibility, and even now can’t seem to let go of their fantasy.”  Krugman’s argument about the “centrists” is interesting and well worth reading as a critique of political commentary and debate.  However, I don’t think you need to agree with that thesis to be concerned about the fact that Ryan has been able to package his budget plans as being primarily about deficit reduction, when the facts show that neither plan was fiscally responsible.

In a brief blog post Sunday, Krugman explains that despite the huge cuts in the Ryan budget, his tax cuts for the rich would leave a bigger deficit than the President’s plan.   Krugman backs up that conclusion by citing an analysis of the nonpartisan Tax Policy Center, which costs out the Ryan plan by analyzing its specific proposals, without accounting for his promise to develop a plan to close loopholes to offset the tax cuts.

In a column a week ago (“Pink Slime Economics”) Krugman called the Ryan plan that was approved in the House, “the most fraudulent budget in American history.”   He argued that:

“The trouble with the budget devised by Paul Ryan… 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.”

That column goes on to explain that to yield the offsetting revenue that the Ryan budget promises, Congress would have to close enough loopholes to yield an extra $700 billion in revenue every year. However, Ryan has yet to specify a single loophole that he would eliminate.

I think many people who disagree with Ryan’s budget priorities have given him credit for being willing to stick his neck out and make courageous proposals aimed at (purportedly) reducing the federal deficit.  Yet the fact of the matter is that the Ryan budget promises huge and very specific tax cuts for the rich, while totally ducking the responsibility of telling us how he would generate enough offsetting revenue to avoid making the deficit far larger. That is hardly the sort of fiscal responsibility and political courage that many people seem to associate with Rep. Ryan.  

Jon Peacock

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