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« Obama: Hey, I've Got A New Idea. Let's Raise Taxes on the Rich! | Main | As Expected, Ninth Circuit Affirms Lower Court's Ruling That Arizona Immigration Law Is Icky »
April 11, 2011

Paul Krugman: Hey, I've Got a Great Idea! Let's Raise Taxes on the Middle Class!

One party is telling you what they actually want to do. That's a perilous course, because the realistic options are not pretty -- either a broad reduction in welfare benefits for the middle class, or a dramatic hike in taxes for the middle class, as they pay more and more money to the government to have the government turn around and give them back in welfare benefits 65% of what they paid for them. (Because government is inefficient and there's always a subsidy for someone else.)

The other party is hiding what they actually want to do, which is generally the politically smart course, except in this case, it will result in the undoing of the American economy.

Liberals are not in fact "looking for new ideas" in this discussion. They've always had the same idea -- raise taxes, especially on the middle class, because that's where the money is, as Willie Sutton said when asked why he robbed banks.

Even the liberal commentariat, who cannot be voted out of office for such punish-the-middle-class policies, will not state this forthrightly.

Oh, they'll imply the living hell out of it. But they won't say it, because their liberal readers also don't want to pay significantly more in taxes and strongly prefer to be spoon-fed economic baby-food lies that the hole can be closed just by raising taxes on conveniently-other people.

But their politicians will not only not say this but will lie and strongly deny it.

This is what liberals want to do -- it is almost universally desired by all liberals. But they don't have the guts to say so. So they plot us on a course of exploding spending coupled with static revenue, a combination which will literally end the United States as we know it within a decade and a half.

They would rather let it all burn down than admit to the public they've lied to all their lives. Good Little Communists know that oftentimes the Vanguard must deceive the great unwashed about the actual goal).

So here' Krugman:

Among other things, the latest budget deal more than wipes out any positive economic effects of the big prize Mr. Obama supposedly won from last December’s deal, a temporary extension of his 2009 tax cuts for working Americans. And the price of that deal, let’s remember, was a two-year extension of the Bush tax cuts, at an immediate cost of $363 billion, and a potential cost that’s much larger — because it’s now looking increasingly likely that those irresponsible tax cuts will be made permanent.

Let me risk embarrassment by taking a Krugman Number as the real number. That is a mistake right out of the box; he lies. But for the sake of convenience, let me pretend I think Krugman Numbers are real numbers and not imaginary ones like the square root of negative one.

$363 billion is about $181.5 billion per year, Krugman. Our deficit, per year, is $1.65 trillion, and that, I repeat, is just the deficit. (Actual government spending is about $3.7 trillion per year.)

Let's go along with your proposal and just end those "Bush tax cuts." (Notice, by the way, that I think he means the Bush tax cuts for the top bracket, whereas the Bush tax cuts actually reduced taxes on the middle and lower classes too -- but he calls that aspect of the tax cuts "his [Obama's] 2009 tax cuts for working Americans.")

Okay, so, hypothetically, the "Bush Tax Cuts" are now ended. Poof. That brings the yearly deficit from $1.65 trillion all the way down to... $1.468.5 trillion per year.

And what next, Krugman? You violently oppose any reduction in spending so you must have in mind either:

1) The simple collapse of government and the economy, or

2) Generating more revenue from somewhere else

Where else, Mr. Krugman? Where are you imagining you can get ten times the $181.5 billion per year you just heroically "saved" us?

And what next?

Maybe you're thinking we should not just revert to Clinton levels of taxation on the rich, but increase them. Let's say we jack up taxes on the rich even more, such that we bring in another $363 billion per hear.

Still over $1 trillion in hock per year, every year, year in, year out. Like the clockwork of a cheap alarm clock serving as the timer for a shrapnel-loaded terrorist bomb.

And what next?

Where are you going to get that $1 trillion+ per year? Please, you're a smart man. Surely you must have some idea of where to get that money.

Surely you're not just sitting there telling us that we cannot cut a dime from spending, but also cannot raise taxes any further, and therefore are simply arguing in favor of debt destroying the country in 10-15 years.

Surely you have some opinion on where another $1 trillion, per year, can be had from.

I understand what your Step One is. Obviously I understand Step One -- it's all you ever want to talk about.

What I'm really curious about is -- what is Step Two, and what is Step Three? Oddly enough you suddenly get very quiet about those later steps.

Everyone knows what Step One. Stop f**king writing endlessly about Step One.

Tell us what your Step Two is. You write two columns per week; you can "waste" a single column taking a break from arguing for Step One to at least sketch out the vague parameters of Step Two.

And then what, Krugman?

And then what?

And then what?

If you steadfastly refuse to tell us, shall I just assume there's a reason for that? Shall the middle class also assume along with me your plan is detrimental to our interests and our desires?

If you had a Step Two that was appealing to us, I have to think you'd eagerly share it.

And what next?

And what next?

Krugman's colleague makes a similar point.

The best thing about the long-term budget proposal from Paul Ryan, the Republican chairman of the House Budget Committee, is that it forces Americans to confront the implications of their choices. If voters want taxes that amount to roughly 18 percent of G.D.P., then they are going to have to accept a government that looks roughly like what Ryan is describing.

The Democrats are on defense because they are unwilling to ask voters to confront the implications of their choices. Democrats seem to believe that most Americans want to preserve the 20th-century welfare state programs. But they are unwilling to ask voters to pay for them, and they are unwilling to describe the tax increases that would be required to cover their exploding future costs.

Raising taxes on the rich will not do it. There aren’t enough rich people to generate the tens of trillions of dollars required to pay for Medicare, let alone all the other programs. Democrats, thus, face a fundamental choice. They can either reverse President Obama’s no-new-middle-class-taxes pledge, or they can learn to live with Paul Ryan’s version of government.

Bonus: Krugman Wants Ryan To Offer Specifics. Are you kidding me here? Krugman's deficit-ending policy begins and ends at $363 billion dollars (and continues, based on what he's willing to tell us, nearly $1.5 trillion deficits every year until the government and economy simply collapse), but he thinks it's a very good criticism of Paul Ryan that Ryan isn't being specific enough about raising taxes:

The nonpartisan Tax Policy Center puts the revenue loss from these tax cuts at $2.9 trillion over the next decade. House Republicans claim that the tax cuts can be made “revenue neutral” by “broadening the tax base” — that is, by closing loopholes and ending exemptions. But you’d need to close a lot of loopholes to close a $3 trillion gap; for example, even completely eliminating one of the biggest exemptions, the mortgage interest deduction, wouldn’t come close. And G.O.P. leaders have not, of course, called for anything that drastic. I haven’t seen them name any significant exemptions they would end.

Yeah, um, I'm not seeing Krugman "name any significant" new source of revenue, either. At least Ryan is offering the idea in principle.

What's Krugman's idea?

I got step one -- $363 billion over two years, or $181.5 billion per year. Which leaves us with only a $1.5 trillion hole to close, each and every year until the end of time end of the First American Republic.

And then what?

And then what?

And then what?

digg this
posted by Ace at 03:17 PM

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