Yesterday, in response to my diary, "The incredible dishonesty of Megan McArdle", I received an email advising me to look at a blog post at the Tax Policy Center, "in defense of her [McArdle's] position against Krugman, and in defense of Rep. Ryan's Roadmap (which I like, but obviously has flaws)", which he later characterized as "TPC's opinion".
However, the post was not "TPC's opinion". It was the opinion of one economist who works at TPC, one Ted Gayer who served in the Treasury Department and as a senior economist on the President's Council of Economic Advisers (under G.W. Bush), as a visiting scholar at the rightwing American Enterprise Institute from 2004 to 2006, and as a Lone Mountain Fellow at the Property and Environment Research Center, which Sourcewatch identifies as a Montana-base think tank "that specialises in free market environmentalism" and that "links to a long list of the country's most powerful right-wing foundations and organizations committed to deregulation of industry and to the privatization of public assets."
The fact that Gayer now works at the Brookings Institution--and through it at the TPC (a joint project of Brookings and the Urban Institute) is indicative of how successful the right has been in influence economic thinking in Versailles. But his opinion does not have the same status as an institutional analysis, even though his post tries to convery the impression of an official position. It's worth noting precisely because it helps flesh out a fuller picture of how rightwing hegemony works in the field of economics with absolutely nothing factual going for it.
Gayer begins his post in an inherently dishonest fashion:
Given that columnist Paul Krugman relied on Tax Policy Center estimates to level claims that Congressman Paul Ryan is a "flimflam man" and that Ryan's plan to address our fiscal problems is a "fraud," I think a defense of the Congressman is in order.
The clear implication here is that Krugman has misused the TPC estimates in making his argument. Why else intervene? Merely because Gayer is a conservative and he wishes to build up Ryan's cred? That would be my guess--but it's only a guess. What I can say for certain is that Gayer presents no evidence at all that Krugman has misrepresented the TPC data and what it has to say about Ryan's plan. Instead, he is simply echoing the narrative that other have used to obfuscate the nature of Ryan's plan, which Krugman represented quite accurately.
Gayer, in contrast, begins by repeating the very mis-representation of CBO data that Krugman zeroed in on:
First, it is worth citing budget estimates from the Congressional Budget Office (CBO). According to CBO, Congressman Ryan's Roadmap for America's Future Act would dramatically reduce the build up of America's debt. CBO estimates that his plan would result in a debt to gross domestic product ratio (GDP) of 69 percent in 2020, rising to 99 percent in 2040, and then decreasing to 77 percent in 2060. This is in contrast to CBO's estimates for its alternative fiscal scenario (which assumes a continuation of current policy) where the debt-to-GDP ratio is 87 percent in 2020, and then rises sharply to 223 percent in 2040 and 433 (!) percent in 2060.
However, as Krugman's column pointed out, this simply is not the case, since the CBO did not consider the revenue side, and it's impossible to get a deficit figure without having both revenue and expenditure projections. Indeed, all that Gayer is doing here is repeating the primary lie that Krugman's column exposed [emphasis added]:
Mr. Ryan's plan calls for steep cuts in both spending and taxes. He'd have you believe that the combined effect would be much lower budget deficits, and, according to that Washington Post report, he speaks about deficits "in apocalyptic terms." And The Post also tells us that his plan would, indeed, sharply reduce the flow of red ink: "The Congressional Budget Office has estimated that Rep. Paul Ryan's plan would cut the budget deficit in half by 2020."
But the budget office has done no such thing. At Mr. Ryan's request, it produced an estimate of the budget effects of his proposed spending cuts - period. It didn't address the revenue losses from his tax cuts.
The nonpartisan Tax Policy Center has, however, stepped into the breach. Its numbers indicate that the Ryan plan would reduce revenue by almost $4 trillion over the next decade. If you add these revenue losses to the numbers The Post cites, you get a much larger deficit in 2020, roughly $1.3 trillion.
That is, Mr. Ryan may speak about the deficit in apocalyptic terms, but even if you believe that his proposed spending cuts are feasible - which you shouldn't - the Roadmap wouldn't reduce the deficit. All it would do is cut benefits for the middle class while slashing taxes on the rich.
And I do mean slash. The Tax Policy Center finds that the Ryan plan would cut taxes on the richest 1 percent of the population in half, giving them 117 percent of the plan's total tax cuts. That's not a misprint. Even as it slashed taxes at the top, the plan would raise taxes for 95 percent of the population.
Naturally, Gayer doesn't want to talk about TPC's own work, so he dances away from it:
On the spending side, Congressman Ryan's plan achieves these substantial reductions in our long-term debt through such things as progressive reductions in Social Security benefits, increases in the eligibility age for Medicare, and the replacement of Medicare benefits with a voucher starting in 2021 (with an average initial voucher value for 65-year-olds of $5,900 in 2010 dollars).
On the revenue side, Ryan has proposed creating an alternative income tax system that has two marginal tax rates, eliminates most deductions and credits, and exempts all interest, dividends, and capital gains from the individual income tax. Filers would get to choose between the existing income tax and the new system. Ryan would also replace the corporate income tax with a business consumption tax (essentially a value-added tax).
But this isn't a response to Krugman, much less a refutation. It's simply a reiteration of the very same misleading narrative that Krugman was dissecting in the first place.
And this becomes perfectly clear a little bit later when finally does get around to mentioning TPC's own work:
TPC did analyze Ryan's tax-specific proposals and found they would fall short of this revenue goal. For example, Ryan's proposal would lead to federal tax revenue of approximately 16 percent of GDP, which amounts to a $4 trillion revenue shortfall over ten years compared to the alternative fiscal scenario. But that doesn't mean that Ryan's plan is a fraud.
Why no! A "deficit-reduction plan" that falls $4 trillion short isn't a fraud! Whatever gave you that idea? Three decades of massive GOP deficits? The avowed intent to "starve the beast?"
Come on!
Tell you what. There's another approach, a really spiffy way to break the spell that hacks like McCardle and Gayer are sweating bullets to maintain. It's called instructive ridicule. And I quote from Kevin Drum:
For some reason, practically everyone talks about how Ryan is the only Republican in Congress who's willing to put his money where his mouth is and tell us exactly what he'd cut out of the federal budget. But he doesn't. His plan merely caps various kinds of spending: there's a cap on Medicare, a cap on Social Security, and a cap on domestic spending. Reduced to its policy essence, that's it.
This is the fourth grade version of a "plan." I can come up with something similar in about a minue. In fact, I will. Here's my "plan":
I think federal spending should be capped at 23% of GDP.
Interest on the national debt comes to 3% of GDP.
Social Security gets 5% of GDP.
Medicare gets 8% of GDP.
Defense spending gets 3% of GDP.
Domestic spending gets 4%.
Pretty good plan, huh? Of course I'd need to pad this out with lots of charts and tables, some quotes from famous people, and a policy proposal or two. Nothing damaging, mind you, mostly just things that hide the fact that I'm not really proposing any specific cuts, only offering a few broad spending caps and (natch) some tax cuts for the rich.
Oh, and his plan doesn't eliminate the deficit, either. Other than that, it's pretty good.
Yup! Pretty good plan. Genius, really. Everyone in Versailles says so.
