Get Behind Paul Ryan's GOP Path to Prosperity

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mainemom
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Joined: 03/09/2004 - 1:01am
Well, Virgil, Paul Krugman

Well, Virgil, Paul Krugman says it's all voodoo economics anyway.
Seems there are tax cuts involved.
Ryan's model lowers the highest rate to 25% and eliminates lots of credits and deductions.
The intention is to be revenue-neutral and growth-oriented.
But Krugman says it's all a supply-side hoax, and he has a Nobel prize.
Add his criticism to yours and it's an Emily Latella moment, I guess.

Exactly what CAN be done to move us onto a path toward fiscal responsibility?

Watcher
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Joined: 03/23/2008 - 12:32pm
I think it is time that the

I think it is time that the limp Republicans find a pair and go on the attack regarding the budget and our fiscal collapse. Here are just a few of the vicious and immoral lies to their American Liberal zombies.

DNC FACEBOOK event calls for dumping trash at Boehner's house...
Pelosi calls GOP plan 'war on women'...
Dem: Shutdown 'equivalent of bombing innocent civilians'...
Jesse Jackson compares to Civil War...
REID: GOP wants shutdown to keep 'women from getting cancer screenings'...

It is time to start using the same tactics because to lose this battle will be, in my opinion, a death blow to our American way of life and sovereignty. Some examples...

1. The Liberal Congress are in bed with the Communists/Socialists and are trying to weaken America so the Socialists can take over.

2. Obama is trying to eviscerate our military to give aid and comfort to Islamic terrorists.

3. Nancy Pelosi is an ugly old hag.

4. The Obama non-existent budget is designed to make us a servant of China.

5. Harry Reed is really a women and only appears to be embalmed.

None of this stuff may be true...except the Pelosi thing, but that never has stopped the Liberal/Socialists from lying through their collective teeth.

Virgil Kane
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Joined: 12/15/2005 - 12:44pm
mainemom, By their nature,

mainemom,

By their nature, governments do not move towards fiscal responsibility.

Economike
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Joined: 11/28/2006 - 9:09am
Every time government

Every time government implements a cost-savings measure, those savings get spent on something else.

Two years ago last month, the national debt broke throug $11T. Now we're over $14T. Ryan's proposal puts the national debt in 2021 at over $23 Trillion. How is this different than current fiscal policy?

Virgil -

I know you're smarter than this, so why dumb down the discussion? The absolute values of government debt or government spending (including, of course, the effects of cost-saving measures) are, in a sense, a distraction. The crucial number is the proportion of private income appropriated by government.

Virgil Kane
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Joined: 12/15/2005 - 12:44pm
Mike, I guess I'm not as

Mike,

I guess I'm not as smart as you give me credit for. Are you saying that debt levels don't matter, that budget deficits don't matter?

Economike
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Joined: 11/28/2006 - 9:09am
By their nature, governments

By their nature, governments do not move towards fiscal responsibility.

Thank you, Lord Acton! Now what's your point?

Economike
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Joined: 11/28/2006 - 9:09am
Are you saying that debt

Are you saying that debt levels don't matter, that budget deficits don't matter?

I'm saying that if the only thing you know about a mortgage is its amount, you don't know much about that mortgage.

Virgil Kane
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Joined: 12/15/2005 - 12:44pm
A housing analogy? Yes, that

A housing analogy? Yes, [i]that[/i] bubble ended well as I recall.

Economike
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Joined: 11/28/2006 - 9:09am
Virgil - I can't tell if

Virgil -

I can't tell if you're in earnest or trying to be funny, but I'll try again. Here is an equally apt analogy:

I'm saying that if the only thing you know about a car loan is its amount, you don't know much about that loan.

mainemom
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Joined: 03/09/2004 - 1:01am
Watcher, that post made my

Watcher, that post made my day.

Virgil Kane, I get it. As long as we have a government, we're doomed.

Economike
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Joined: 11/28/2006 - 9:09am
By their nature, governments

By their nature, governments do not move towards fiscal responsibility.

Virgil Kane, I get it. As long as we have a government, we're doomed.

Looks like Virgil has fallen under the influence of Mike G. The "G" is short for "Governmentisobviouslythecauseofallevil.'

Economike
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Joined: 11/28/2006 - 9:09am
Good comment and graph

[url=http://cafehayek.com/2011/04/two-budgets.html]Good comment and graph here.[/url]

Why can’t we go back to the draconian, ancient days of 2007 when government was 19.5% or so of GDP sooner rather than later. We know the answer, alas. It is embodied in Arnold’s observation that increases and decreases are not symmetrical politically.

Virgil Kane
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Joined: 12/15/2005 - 12:44pm
Mike, What is it about this

Mike,
What is it about this mortgage/car loan, besides the amount, that I should know about in order to understand that everything is going to be okay?

mainemom
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Joined: 03/09/2004 - 1:01am
From economike's link in

From economike's link in #72
The Administration proposal ratifies the past “emergency” measures as the new baseline.

Again, we see the consequence of putting emergency spending (like war spending and stimulus) "on budget."
It becomes part of the permanent spending baseline and makes it easier for grow-government types to do their thing.

Conservatives asked for this when they criticized GWB for keeping the wars "off budget;" their error was in thinking his motive was to mask how much we were spending.
Obama was happy enough to oblige them; see that baseline grow!

Economike
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Joined: 11/28/2006 - 9:09am
What is it about this

What is it about this mortgage/car loan, besides the amount, that I should know about in order to understand that everything is going to be okay?

Virgil -

If you're a typical middle-class wage earner, you'll be looking at your long-term prospects for capital accumulation (e.g. retirement savings).

Would you borrow $100,000 for a house? Simply gasping "Oh, Crikey! I'll owe $100K!" doesn't tell us anything about the value of the mortgage. The question is "If I assume this mortgage, will I better or worse off in the future?"

It depends on (1) the value of the house, (2) how readily you can make the payments, and (3) whether the house enhances your overall net worth. (Maybe the house is near your work, or maybe not.)

There's a dynamic relationship between your mortgage and your long-term net worth. Maybe $100K is a great deal or maybe it's not.

Similarly, looking at the absolute value of federal debt ten years out doesn't tell us much, if anything, about the policy alternatives we face during that ten year period. If we're credibily committed to supply-side tax cuts and fiscal discipline (keeping federal expenditure below 20% of GDP), then the prospective value of federal debt may represent our best real-world alternative. Note that I'm not claiming that Ryan's plan is the best possible plan, or even my preferred plan, but so far it's the best plan on the table. I wouldn't damn it because it's not perfect.

Virgil Kane
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Joined: 12/15/2005 - 12:44pm
emike, I understand how those

emike,

I understand how those other factors come into play when assessing the value or prudence of taking on a mortgage. My question was, perhaps inartfully, using the terms from your analogies to inquire about the factors besides national debt and budget deficits that you feel are relevant to the U.S. fiscal policy discussion.

And, you know, if a guy is asked whether he wants to borrow $100K to buy a house, and he answer,s "crikey!, I'd owe $100,000," without explicitly stated that he feels the house is not worth $100K and/or that he cannot afford the monthly payments on a $100,000 loan, or that he would rather spend that money on something else each month, it might be a quick rush to judgment to say they guy is an idiot for not taking into consideration those other factors, simlpy on the basis that he did not expressly refer to them when he expressly stated the loan amount.

But moving on . . . You mentioned "the proportion of private income appropriated by government" as being a crucial number. So, whare is this crucial number coming in at these days? What is it about this number that I need to know, to put the projected debt levels and budget deficits into a fuller context?

Economike
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Joined: 11/28/2006 - 9:09am
....analogies to inquire

....analogies to inquire about the factors besides national debt and budget deficits that you feel are relevant to the U.S. fiscal policy discussion.

Virgil -

I've covered much of this ground [url=http://www.asmainegoes.com/content/jukebox-economics-doesnt-add]in this thread.[/url] I'll add a few additional thoughts.

You mentioned "the proportion of private income appropriated by government" as being a crucial number. So, whare is this crucial number coming in at these days? What is it about this number that I need to know, to put the projected debt levels and budget deficits into a fuller context?

I think the graphic linked in [url=http://www.asmainegoes.com/content/jukebox-economics-doesnt-add#comment-... post[/url] is especially useful. Notice the trendlines of federal spending and federal taxes. First, I'm going to assume - as Milton Friedman wrote - that "the spending is the tax." In other words, the electorate understands that what government takes in taxes plus what government borrows constitutes the real amount of taxation. This idea is known as Ricardian equivalence.

This year federal spending is roughly 26% of GDP. Historically, the upper bound of federal taxation is 20% of GDP. This suggests that any budget that projects federal spending above 20% of GDP will fail; that is, will spiral into increasing and ultimately disastrous levels of debt. With high tax rates or low, the electorate is willing to surrender 20 cents on the dollar of its income to the federal government and no more. When rates rise too high, the electorate simply slacks its productive efforts to keep the ratio down. (Or the opposite. When Reagan lowered marginal tax rates, incomes rose.)

For the period of roughly 1950 through 2010, economic growth throughout the West (not just the U.S.) enabled governments to run structural deficits (as shown in the linked graphic). Governments could pay for current social welfare programs by borrowing because GDP seemed always to grow faster than government promises. This era is over. As it turns out, the spending is the tax. (See discussion [url=http://www.asmainegoes.com/content/jukebox-economics-doesnt-add#comment-... here.[/url])

So, to answer your question, relevant factors in our fiscal policy discussion are (1) does the proposed budget reduce the overall marginal tax burden on producers? (2) Does the proposed budget conform to the historical tax limit of 20% of GDP?

Mike G
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Joined: 02/17/2000 - 1:01am
emike I believe brighter

emike

I believe brighter minds than mine believe that government is the root of all evil, so I guess I'm in good company. It is the people that believe that government is the solution to all problems that are the real dolts.

Virgil you have got it right, to think that Ryan has found religion and is going to change his spending ways is pure fantasy. How stupid do they think we are? More political grand standing for public consumption, appearance is everything.

Economike
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Joined: 11/28/2006 - 9:09am
I believe brighter minds than

I believe brighter minds than mine believe that government is the root of all evil, so I guess I'm in good company.

Mike G. -

This is astonishing on two counts. First, no mind could be brighter than yours and, second, no person even moderately bright could believe that government is the root of all evil. This belief would require one to posit that any random group of people thrown together without government, say, on a desert isle, would enjoy a paradise on earth.

It is the people that believe that government is the solution to all problems that are the real dolts.

I'd agree that people who believe that government is the solution to all problems are real dolts, but I'm left to wonder who the fake dolts are.

Virgil you have got it right, to think that Ryan has found religion and is going to change his spending ways is pure fantasy. How stupid do they think we are?

There you go again, Mike G. Who's the antecedent of the mysterious "they"? I'm beginning to think you're hard-wired for paranoia.

More political grand standing for public consumption, appearance is everything.

Well, if appearance is everything, you'll never have to bother to make a political choice, will you?

Mike G
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Joined: 02/17/2000 - 1:01am
emike yeh that's right my

emike

yeh that's right my paranoia has gotten me to the point where as a nation run by a farce two-party system our nation finds itself trillions of dollars in debt. The rich get bailed and the taxpayer gets the shaft. Our royalty flies around in jets while we ride over potholed cow paths in every increasing unaffordable rust buckets. Foreign tyrants and corporate interests are protected by a bloated US military budget that is as great as almost all other nation spend combined.

Supposedly we have just gone through some great revelations and have voted in some tea party republicans after the antics of the previous great revolution mr hope and change and his band of idiots pelosi and reed proved otherwise. Well so far the great Republican revelation has shown as much promise as the big O, because it is all a bunch of BS.

Ryan proposing some minuscule cuts are meaningless, no less than 1/2 trillion to a trillion are needed. And a private bank that can just manufacture money at its whim is the height of arrogance and control from our betters.

The great experiment has gone tragically wrong and it has been wrong for decades, just as the founders knew it would become. To put your faith in DC is delusional, now maybe considering the gravity of the problem it might be comforting in being delusional, but this has stunk for so long who can stand it anymore.

:)

AND to feed my paranoia further the Loonie is worth 1.05 greenbacks. Nothing to see here, move along.

Marc Faber on why emike loves the FED

FLAMMENWERFER
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Joined: 03/27/2005 - 1:01am
John Podesta: “Paul Ryan

John Podesta: “Paul Ryan proposes to end Medicare as we know it.”
Sen. Max Baucus: “It would end Medicare as we know it.”.
Nadeam Elshami (Pelosi’s communications director as we know it.”
Sen. Tom Harkin “It does end Medicare as we know it.”

Daringly original Rep. Debbie Wasserman-Schultz (DNC chair-to-be) tells us : “This plan would literally be a death trap for seniors.”

Mike G
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Joined: 02/17/2000 - 1:01am
Ending medicare as we know it

Ending medicare as we know it would end Ryan's political career as we know it and the beat goes on.

Jim Corr
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Joined: 05/25/2007 - 4:04pm
Why can't I just keep the

Why can't I just keep the insurance I have when I turn 65? Why should I have to change?

mainemom
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Joined: 03/09/2004 - 1:01am
Why can't I just keep the

Why can't I just keep the insurance I have when I turn 65? Why should I have to change?

But chances are, the agremeent that covers you now is between an employer and the insurance company.
When your employment ends, so does the agreement.

Ideally, if you and the insurer can work out a coverage and pricing model that suits you both, you should have the freedom to do business with each other after you turn 65, no government or employer involvement. You'd have to be willing to pay the added cost of underwriting health insurance for that particular age demographic.
Oops. Now the enormous premiums put it out of reach for most seniors, who in any given year would do better to pay for their care out-of-pocket. The downside is that year when you have the quadruple by-pass and it bankrupts you.

Ending subsidies to help seniors pay for medical care is a political non-starter.
Ryan would switch the system to premium support rather than paying claims.
We'll have to see if the market develops products you can start paying for in your youth that take you into your golden years.
You'd see that happen under a true free enterprise system of real insurance.

thistle
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Joined: 08/15/2009 - 9:46am
Posted: April 10 Updated:

Posted: April 10
Updated: Today at 1:12 AM
Richard L. Connor: That hollow sound is a promise hitting a wall

All the Republicans, and even some Democrats, who ran for Congress last fall promised to do something about the federal government’s out-of-control budget deficits.

...why don’t they quit spewing words and put all those November campaign promises into action?

This is your chance. Take it or be prepared to answer to the voters who sent you to Washington to fix a problem, not wrangle about it.

Ryan’s budget...should separate the contenders from the pretenders....

http://www.pressherald.com/opinion/that-hollow-sound-is-a-promise-hittin...

Al Amoling
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Joined: 07/07/2004 - 12:01am
I read Connor's and couldn't

I read Connor's and couldn't help but think that he didn't realize that the shut down was about last year's budget. The big fight over the new budget starts now.

mainemom
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Joined: 03/09/2004 - 1:01am
Dissecting the liberal

Dissecting the liberal assault on the House Republican budget

Mr. Ryan is offering Americans a reform rooted in consumer choice and private competition, rather than political control and bureaucratic rationing. This is why he is under such ferocious liberal assault.

This Review and Outlook piece does a nice job countering the leftists' criticism of Ryan's Path to Prosperity.
Meanwhile on the libertarian right is the intractable problem of accepting anything less than amputation of the social-safety-net components of the federal government and the federal budget.
When asked to get behind the Ryan plan as the best thing on the table, they just can't do it, because embracing Ryan and his plan means embracing the anathema of a mixed economy.
I get that, truly I do, but a transition to a system with a firm separation between economy and state is not on the table, nor will it be, and there's no Galt's Gulch to flee to.

Economike
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Joined: 11/28/2006 - 9:09am
Greg Mankiw comments on the

[url=http://gregmankiw.blogspot.com/2011/04/ryan-plan.html]Greg Mankiw comments[/url] on the Ryan Plan -

That is, the choice we face is between historically high taxes (the left's unspoken preference) and a fundamental rethinking of the social safety net (such as the plan proposed by Congressman Ryan).

mainemom
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Joined: 03/09/2004 - 1:01am
We now have the Obama plan to

We now have the Obama plan to cut $4 T off the deficit in 12 years.
Rather, his shadow of a plan, because of its ethereal nature.
Step 1 - use the just-bargained budget deal as a baseline to extend out 12 years.
Step 2 - Find additional savings in the defense budget. Do a strategic review and base the cuts on recommendations. He didn't say how much this would save, but he said Gates had found $400 B to cut in teh last 2 years, and he thinks it's possible to keep doing that. Call this one amorphous.
Step 3 - "Further reduce" health spending by reducing the cost of health care, not by cutting payments to beneficiaries. He would build on the $1 Trillion in savings that Obamacare is supposed to generate. He would control the price of drugs. He would eliminate fraud, etc (earlier in the speech he had made fun of the idea that the budget could be balanced by getting rid of fraud and abuse.) best of all, experts would convene to indentify ways to reduce unnecessary health spending. He promised as long as he is president he will say NO to vouchers in medicare and medicaid. Call this one fantasy.
Step 4 - Reduce tax expenditures and raise rates on the rich. Here is the most dishonest of his talking points. Earlier he had portrayed Ryan's plan as a trillion dollar tax cut for the wealthy, when in truth the GOP plan would lower rates but only in conjunction with eliminating enough of the exclusions and "tax expenditures" to make it revenue neutral. Then Obama turns around and says he would lower rates in return for doing away with so many tax expenditures and limiting the itemized deductions for the wealthy, a variation on Ryan's theme (and the ideas of the deficit reduction commission). This was infuriating. Anyway, he kept tossing around this $1 trillion tax cut for the rich nonsense when there are no numbers anywhere that say the rich, however defined, are getting a $1 trillion tax cut. He did say over 10 years, his plan would save $300 billion by limiting itemized deductions for the top 2%.
In summary, the Obama deficit reduction plan is to raise taxes and carry forward the small cuts that were just negotiated, while also continuing to "invest" in education and "clean energy" etc etc etc. Maybe there will be some cuts to defense. Health care spending will magically come down. And voila, we save $4 trillion in 12 years.

thistle
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Joined: 08/15/2009 - 9:46am
Rep. Chellie Pingree,

Rep. Chellie Pingree, completely wrong, tells why she is not supporting Rep. Paul Ryan's budget proposal

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