Paul Krugman spent Wednesday combing through the details of Tea-GOP genius Paul Ryan’s budget and in a series of blog posts utterly destroyed the Ryan budget’s phony math, implausible assumptions and unicorn forecasts. Kudos to MSNBC’s Rachel Maddow for picking this up.
Krugman once called Ryan a “flim flam” man, a virtual con artist, and yesterday, he proved it. Let us count the ways.
1. Beginning Tuesday with “Groundhog Day,” Krugman warned of a giant bait-and-switch in which the claimed goal of reducing the deficit would provide cover for what in fact would be a proposal not merely to privatize Medicare (or Social Security) but to do so in a way that actually increased costs, if not to government, then for beneficiaries. He was right.
As we’ve been saying all along [see here, here, and here], Ryan’s Medicare mandate plus vouchers would lower government costs only by shifting even more uncontrolled costs to seniors, disabled and poor people, eventually forcing them to forego treatment for which they could not afford insurance.
2. In the 2022 Medicare Crisis, Krugman echoes Matt Yglesia’s point that Ryan’s Medicare mandate and voucher system sets up an unstable, indefensible discriminatory system for seniors. Starting in 2022, those already over 65 would continue receiving traditional full Medicare benefits (and have the choice of getting the equivalent from private insurers via Medicare Advantage) but those just reaching 65 from then on would receive only private insurance that, year after year, covered less and less of the costs and care as older retirees. Ryan assumes the “savings” from this discriminatory treatment would be accepted by the disadvantaged group and that Congress would ignore the unfairness.
3. In Ryan the Ridiculous, Krugman examined Ryan’s economic assumptions on which his revenue and savings projections depend. Ryan’s budget crunchers are the right-wing Heritage Foundation. They assumed that despite major new tax cuts for wealthy Americans and corporations, federal revenues would, presumably via the hilarious Laffer curve (aka what G.H.W. Bush called “voodoo economics”), still dramatically rise. How? Because unemployment would virtually disappear: by 2020, it would fall from near 9 percent to less about 2.8 percent, a level not seen in the last sixty years when lots of men were fighting in Korea. Right.
4. A few hours later, Krugman sent out a Memory Hole Alert, after he caught Heritage trying to scrub the implausible 2.8 unemployment assumption from its website. But Paul had the before and after screen shots. Whoops.
5. Next, Krugman noticed Paul Ryan’s Multiple Unicorns. In addition to noting the large difference between the reality-based CBO unemployment projections and Heritage’s projections, Krugman picked up on Dean Baker’s calculations showing that to sustain the same health care they’d get under Medicare today, future seniors under RyanCare would have to spend most of their income on rising private health insurance premiums.
Worse, Krugman notes that Ryan’s budget savings from Medicare/Medicaid that result from shifting costs to seniors and the poor/disabled would be squandered in providing more tax cuts for the rich and corporations. So the claimed debt reduction could only come from slashing everything else, but not explaining how:
Ryan is assuming that everything aside from health and SS can be squeezed from 12 percent of GDP now to 3 1/2 percent of GDP. . . . And how is this supposed to be accomplished? Not explained.
This isn’t a serious proposal; it’s a strange combination of cruelty and insanely wishful thinking.
6. In a Housing Unicorn, Too! Krugman scours the Ryan/Heritage accounting to discover that the assumed Tea-GOP economic growth will be driven by . . . wait for it: another housing boom as robust as we had in 2006 at the height of the housing bubble! And since government debt would presumably be shrinking, the only way to finance that massive boom would be to have today’s snake-bitten consumers eagerly take on massive mortgage debts again. Next.
7. In Where the Spending Cuts Go, Krugman provides bar charts to show that “a large part — roughly half — of the spending cuts are going, not to deficit reduction, but to finance those tax cuts” for the wealthy. So there may be hidden cuts or tax increases on the middle class to account for the rest of Ryan’s claimed debt reductions. Paul concludes:
. . . the bottom line is obvious: this is not the budget of a deficit hawk. It’s the budget of a deficit exploiter, someone who is trying to use fears of red ink to push through a political agenda that includes major losses of revenue.
Or as Ryan himself admitted: “This is not a budget, it’s a cause.”
8. Finally, in the Puzzle of Gullibility, Krugman takes the media to task for swallowing complete nonsense, including these Beltway myths:
Paul Ryan is an honest, deeply serious thinker who really cares about the deficit.
The Ryan plan sets a new standard of seriousness.
Yep. The Tea-GOP’s budget genius, the man conservative pundits hope will become President and the current President says has good ideas, the man who keeps lecturing everyone else about avoiding demagoguery and acting like grownups, that man is a complete charlatan. That’s why Krugman calls Paul Ryan, “Flim flam Man.”