I've grudgingly accepted that taxes are going to need to stay where they are for the foreseeable future, we can't afford a tax cut until we have become more solvent and reduced out debt. So Paul Krugman's accusation that Paul Ryan's "road map" selectively ignores the effects of revenue reduction is one to consider seriously.
Still, the bulk of his critique of one of the few politicians to even attempt to address the national debt in a meaningful way is mostly just name-calling and ad hominem attacks on Newt Gingrich. (Wait, what?) And the rest of the substantive attack Krugman makes on Ryan is that people won't like spending cuts. Well, duh. But they don't like a nation thirteen trillion dollars in debt, either, or at least they shouldn't. What people need to understand is that when you demand subsidized health care from the government, paid for by government debt, you are taking tomorrow's money from your children and grandchilden to pay for your health care today.
Because Krugman doesn't seem able to understand that, for instance, glowing reports of unexpected robustness in the Social Security system are illusory. We need to get steered towards a path of national solvency. If Krugman thinks Ryan's plan to that end is nothing but flimflam and hot air, so be it -- let's see him point to some alternative way to reach the same goal.
August 6, 2010
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On the one hand: massive cuts to budgets, everywhere, are alternatively what one calls either a recession or depression. Since the definitions of these are not universally agreed on, the line between is wide and fuzzy.
The problem is that for most parts of the economic cycle, these are self-fulfilling prophecies when they become market-wide. If most of the marketplace is laying off because of lack of consumer spending, then consumers lost their jobs, and so consumers stop spending, so consumer spending dips further, which causes more companies to cut back and institute more layoffs... this is exacerbated by the fact that in modern times, most business is NOT done by small business owners (owners with, say, a chain of 1-10 stores or so) but rather by large corporate multinationals that are all at once "too big to fail" and rather callously uncaring towards anything other than what they can possibly squeeze out of the human cogs in the machine.
This is where both Democrats and Republicans get it wrong. Democrats think that heightened intrusion into the market is best. Republicans tend to think that unmitigated, laissez-faire deregulation is best. The actual best point from an economic standpoint is a midpoint wherein monopolistic formation is discouraged and, when it happens anyways or is likely to happen due to infrastructure factors (the homogeneity of home audiovisual equipment containing components patented by certain companies for example), is prevented from becoming abusive.
Is there an argument to be made that "the rich" (however one defines it) aren't paying their fair share? Definitely. I think it is a better argument from the standpoint of closing existing loopholes as opposed to simply "raising the rates", though. From that side, it was rather disingenuous recently of the Republicans to oppose as a "tax hike" the closing of a loophole allowing big corporations to incorporate offshore and dodge taxes that way.
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