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Making It Clear — Why Now?
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Making It Clear

by Bryan

Professor Krugman is annoyed with the commentariat:

People like me don’t say that the Ryan plan is too radical; we say that it’s a fraud. The spending cuts are largely fake, either because they’re just magic asterisks or because they wouldn’t survive politically; the revenue estimates are fake, because they combine huge tax cuts with vague assurances that extra revenue will be found by closing loopholes. There’s no there there — except for big tax cuts for the rich and pain for the poor.

Unlike the media some of us can do the math involved with balancing a checkbook, even without a calculator. When the amount of the deposits is less than the amount of the checks, your account is overdrawn. There is nothing serious or courageous about repeating the failed concept that reducing the top tax rates will increase revenues. That delusion was rolled out under Reagan, and it is still a failure.

The only way that messing around with Social Security and Medicare will have a noticeable effect on the deficit is if the government defaults on the bonds in the Trust Fund, and that seems to be what they have in mind to avoid having to pay it back. Of course, doing that destroys the value of all government bonds.

2 comments

1 Suzan { 04.11.11 at 9:14 am }

And it’s hard to believe (for us blessed with math skills and knowledge of history anyway) that they would do that, isn’t it?

My thought is that they will threaten it up to the 12th hour (just as with all the deadlines before) and our guys will cave in to their unjustified demands while quaking in fear and panic (and hoping that people will still love/like and respect them in the morning for not letting “bad” things happen from bad people).

As if.

Thanks for the commentary.

S

doing that destroys the value of all government bonds.

2 Bryan { 04.11.11 at 11:49 am }

I’m not sure that the leaders of House truly understand what they are talking about, when they keep harping on “entitlements”. I don’t think they really know how the system works.

We can hope that their “masters” jerk on their leashes before they do something that can’t be corrected quickly.