Like the junk bonds sold during the ‘80s, junk economics are equally hazardous to our fiscal health. Yet, WI Representative Paul Ryan attempts to sell the American people on junk economics the way Wall St. sold junk bonds a couple of decade ago. Those junk bonds proved to be not only worthless but also expensive just as Rep. Ryan’s budget does now.
Henry Aaron, a premier economics authority on health care and federal budgets, speaks his mind on Rep. Ryan’s budget in a column for Fiscal Times:
Just after the Republican electoral blow-out last November, I asked one of my colleagues, a former Republican member of Congress, what he thought the new House majority would do with its power. His answer was: “Overreach. The Democrats did it. So will we.” The budget plan introduced by Republican Paul Ryan has confirmed the prescience of that answer. It is hard to overstate how radical, almost otherworldly, this plan is.
Were all of the savings from these remarkably large spending cuts devoted to reducing the deficit, one might still criticize the plan. Most members—Republican and Democrat—of all the commissions that have recently put forward plans to close the deficit have relied on both spending cuts and tax increases, so as to minimize the damage to vulnerable members of society from cuts in spending that provides them with health care, food, housing, and other essentials. These would-be deficit-cutters have agreed that while deficit reduction is vital and that spending should be lowered, taxes need to be part of the plan.
Not so with Ryan. His plan actually cuts tax cuts, thereby requiring even larger spending reductions than would otherwise be necessary. Except for one telling detail, Ryan did not reveal just whose taxes should be cut or by how much. His reticence probably expressed deference to the tax writing Ways and Means committee with which responsibility for tax legislation resides. But he was explicit on one provision—the marginal tax rate that applies to America’s highest income families, those with incomes, after deductions and exemptions, of at least $375,000, should be cut from the current 39.6 percent to a maximum of 25 percent.
If you’re a middle income, working class family Ryan’s budget should concern you greatly because it will increase your individual costs and your taxes, either on the federal or state side, and will add over a Trillion dollars to the deficit over the next decade while giving an even greater tax benefit to the wealthy.
I don’t care whether you’re a Democrat or Republican or Tea Party conservative, you should be concerned about the negative fiscal implications of Ryan’s plan on your budget.