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On Paul Ryan

A number of you have written to ask what I think of Paul Krugman's column attacking Paul Ryan's budget. As far as Krugman's policy critique goes, I agree. I'd refer people back to my post "Paul Ryan's budget proposal does not balance the budget," which uses the same Tax Policy Center data that Krugman does. The question comes down to whether Ryan is serious about increasing the revenues in his plan from 16 percent of GDP to 19 percent of GDP. He says he is, but as far as I know, he has not modified his proposal to reflect that.

Then there's the question of spending cuts. I'm mainly interested in Ryan's decision to convert Medicare and Medicaid to vouchers and then hold down costs by making the vouchers grow more slowly than the price of health care. As I've written before, I think this is a bad idea. It rations by making people less able to access health care rather than by making care itself cheaper, and it converts Medicare to private insurance when Medicare has repeatedly proven itself cheaper than private insurance. But where Ryan's colleagues refuse to offer any solutions and instead just attack Democrats for "rationing," Ryan is showing how conservatives would ration. I think that's productive.

And now let's get to the paragraph a lot of you will flay me for: I don't think Ryan is a charlatan or a flim-flam artist. More to the point, I think he's playing an important role, and one I'm happy to try and help him play: The worlds of liberals and conservatives are increasingly closed loops. Very few politicians from one side are willing to seriously engage with the other side, particularly on substance. Substance is scary. Substance is where you can be made to look bad. And substance has occasionally made Ryan look bad. But the willingness to engage has made him look good. It's given some people the information they need to decide him a charlatan, and others the information they need to decide him a bright spot. It's also given Ryan a much deeper understanding of liberal ideas than most conservative politicians have.

So do Ryan's arguments persuade me? Not as far as the Roadmap goes. But I'm glad to give him space to try to persuade all of you, so long as he's willing to let me try and poke holes in his arguments while he's doing it. That's an offer I've extended to every legislator interested in taking me up on it, and it still stands.

By Ezra Klein  |  August 6, 2010; 5:50 PM ET
 
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Comments

Ezra, you are right about Paul Ryan.

Simply put, there is tremendous 'premium' in being open to ideas of other camp than getting all those ideas 'correct'. Krugman is Theoretician so his is a right approach to assess Ryan proposals with academic rigor whereas as a policy wonk, it is your duty to assess and calibrate the political significance (and possibility of things getting enacted). Good thing with Krugman is he never pretends or attempts to worry about 'political saleability / marketability' of any particular policy. It is good that you do understand that you do not have that luxury and hence you give the right Premium for Ryan's ideas.

Hey, it does not matter what color of cat is as long as it catches the mice.

We Americans who support to Obama are not beholden to him or Democrats. If Ryan type Republicans solve our problems and give us jobs, we are fine; we will vote him (since unlike his Tea Party counterparts he is not at all Racist which is such a big deal).

Posted by: umesh409 | August 6, 2010 6:50 PM | Report abuse

What's interesting, Ezra, is that both sides basically believe that the problem with health care is that it costs too much, and both sides have different endgames for bringing the costs down. Liberals generally want to follow the model of most other modern countries and tell health care providers and what to charge, just in a less statist way. So we have Obama signing a bill that puts caps on insurance premiums, which liberals hope will drive down what insurers are willing to pay for care, just as Medicare pays far less than doctors would like. The idea is to force health care costs down through something other than price controls.

Conservatives generally believe that patients will bring costs down themselves if they are able to shop for health care the way they shop for everything else. Most conservative health reforms try to transition insurance into a catastrophic-only mechanism, with everything else coming out of pocket. The idea being that once people are paying for their own ear, nose, and throat exam, such an exam will cost 20 dollars instead of 200 dollars because that's all it's really worth on the market.

I think the truth is probably somewhere in the middle. We do need a more rational market in health care but the human cost of Ryan's plan is too great. And it's politically untenable anyway given that seniors vote early and often. We do need further health care reforms but they'll probably be a mix of what Ryan and, say, Ron Wyden want. What's interesting is that no matter how this ends, doctors end up making less money. That's the long and the short of health care reform.

Ryan does have a good fix for Social Security though and it deserves a more serious look from liberals.

As for taxes, go back to Clinton levels, which were proven to be able to co-exist peacefully with strong economic growth and which would increase revenue significantly.

Posted by: DR721 | August 6, 2010 6:53 PM | Report abuse

So you are saying that Ryan is not a charlatan, merely stupid? Or viciously insensitive to the human consequences of his enthusiasms?

Faint praise.

Posted by: janinsanfran | August 6, 2010 6:54 PM | Report abuse

Ezra,

Did you ever ask Paul Ryan why he voted for Medicare Part D if he is so concerned about the fiscal health of our nation? I think it should be important to get a clear answer on this if anyone is to take Paul Ryan seriously on the issue of fiscal responsibility.

Posted by: ioancuza | August 6, 2010 7:14 PM | Report abuse

Ezra writes:
"I'm mainly interested in Ryan's decision to convert Medicare and Medicaid to vouchers and then hold down costs by making the vouchers grow more slowly than the price of health care. As I've written before, I think this is a bad idea. It rations by making people less able to access health care rather than by making care itself cheaper"
------

Ezra, this was also a key feature of Wyden-Bennett (providing subsidies to buy private insurance, but the subsidies grow slower than health care costs), a bill you often spoke very highly of. It was a big part of Wyden-Bennett receiving a favorable CBO score. I don't recall you criticizing that tactic in that bill, so why are you so critical of it now?

Posted by: ab13 | August 6, 2010 7:30 PM | Report abuse

The problem is you have this panel of people you go back to again and again: notably Paul Ryan ("the thinking man's conservative") and Kent Conrad ("the thinking man's budget hawk"). They are both FOS. Yet you *don't* question them aggressively, because you're afraid they won't return--or it might deter others from talking to you. And in the process both journalism and the progressive movement are damaged. But by all means, keep doing what you're doing.

Posted by: bmull | August 6, 2010 7:39 PM | Report abuse

"Ryan does have a good fix for Social Security though and it deserves a more serious look from liberals."

I'm firmly on the side that there isn't all that big of a rush to "fix" it. You can get into the details of how the gov't has raided the "trust fund" and its merely an artifact of bookkeeping at this point, but, in theory, the "trust fund" has enough money to last for decades.

What is most shocking to me about Ryan's plan is just how much the wealthy benefit. The top income earners in America already pay an absurdly low 17% effective tax rate, and by the Tax Policy Center's estimates, this will go down to 11%. What's your effective tax rate?

This is a tax cut of, on average $600,000 a year for all those that make more than one million a year. (many make way way more than 1 million, hence the average being so high). Its about a 30% increase in after tax pay amongst the most extremely wealthy Americans.

Meanwhile, those making between $40-75,000 will get, if they're lucky, a tax cut of about $150. Some may actually see taxes go up.

In essence, his plan is to drastically increase the wealth of the wealthiest, while giving few, if any breaks to anyone else, while slashing all of our benefits, with the end result being that the debt will STILL increase. It does not actually fix our long term budget issues so much as acts as a major transfer of wealth from the lower and middle class to the most obscenely rich amongst us.

What exactly are the positives again? We get vouchers that buy us less and less health coverage with every passing year?

Thanks but no thanks.

But yes, agreed, its nice to have an ACTUAL debate about budget ideas that goes across the aisle for once. It sure beats the more prominent GOP stance of, "we swear we have a way to fix this where everyone gets lower taxes and the budget gets balanced, but we just won't tell you what it is...just trust us."

Posted by: nylund | August 6, 2010 7:47 PM | Report abuse

@ DR721 : The idea being that once people are paying for their own ear, nose, and throat exam, such an exam will cost 20 dollars instead of 200 dollars because that's all it's really worth on the market.

Don't you see the kind of economic rationing of health care you are describing. Markets aren't perfect. Health care is not like clothing. If clothing is too expensive, one can wear old cloths until the market responds to lack of demand and lowers the price of cloths. If healthcare, particularly preventative care, is too expensive, in the time that the market responds to demand, people get very sick and die. Also because of the medieval guild like strangle hold that the AMA (and other doctor groups like the American College of Surgeons) has on doctor credentialing, there is not the kind of competition that drives prices down because supply is artificially constricted. And given the stratospheric gap between the top 10% of wage earners and everyone else, many people are simply priced out of the market. Doctors already specialize in diseases of the rich. That would only get worse.

"What's interesting is that no matter how this ends, doctors end up making less money."

Doctors, but more importantly drug and medical device manufacturers and insurance companies, will have to get a lot less of the health care dollar for the system to be cheaper...

"Ryan does have a good fix for Social Security though and it deserves a more serious look from liberals."

Did you examine the plan? It slashes benefits and raises taxes on everyone except the top 10% who get a tax break. Social security is solvent until 2037 and then it can pay out 75% of benefits for the foreseeable future. Just raising or eliminating the payroll tax cap would make it solvent indefinitely. Other small changes could be mixed in with raising the cap as well.


"As for taxes, go back to Clinton levels, which were proven to be able to co-exist peacefully with strong economic growth and which would increase revenue significantly." We had pretty good growth under Eisenhower at 90% for the top bracket, but I would settle for 50%. Lets raise additional revenue by adding a financial transactions tax that targets computer arbitrage, that's where the money is...

Posted by: srw3 | August 6, 2010 7:49 PM | Report abuse

@bmull:Yet you *don't* question them aggressively, because you're afraid they won't return--or it might deter others from talking to you. And in the process both journalism and the progressive movement are damaged. But by all means, keep doing what you're doing.

The paradox of journalism. I think that Ezra does err on the side of deference, but he is not a groveling toady like so many others. I would like him to be a bit more pointed in his questioning, but if you are mean, senators take their balls and go home. Its a paradox.

Posted by: srw3 | August 6, 2010 7:53 PM | Report abuse

Yes, please give him the forum he deserves on this column and poke holes in his reasoning, so that the REST OF THE WORLD CAN RIP IT (the reasoning part) APART

Posted by: vara | August 6, 2010 7:57 PM | Report abuse

You are ok for a Washington game player, Ezra. But Krugman is the straightest shooter. He tells really how to "fix" SS if it needs fixing. RAISE THE TAXES ON THE RICH AND RAISE THE CEILING ON INCOME SUBJECT TO SS TAXES. Its just too darn easy and straightforward and fair for all the complicated thinkers in DC. Haven't the un-rich suffered enough at the hands of "republican thinkers"?

Posted by: annegreen | August 6, 2010 8:07 PM | Report abuse

I think the larger issue may be that Paul Ryan seems to be the best the GOP has to offer. In that sense, he's like the valedictorian of Slow Camp. So, it's still kind of hard to take him seriously because doing so requires coming to terms with just how filled with slow kids the rest of camp is. Better to see him as a knave in that respect. It's a more optimistic perspective.

Posted by: slag | August 6, 2010 8:15 PM | Report abuse

Why would anyone trust a current Republican to act truthfully in any way? Ryan's proposal is just a false flag to lead the way to gutting the government next time the Republicans get enough power.

Sometimes you youth and naivete do not serve you very well Ezra

Posted by: williamcross1 | August 6, 2010 8:16 PM | Report abuse

@srw3: The problem with your solutions is that pretty much every one of them amounts to raising more revenue as opposed to making services cheaper. I believe you did agree with me that health care will have to cost less, so that's a start. The reason I'm a centrist and not a liberal is that liberals tend to want to solve everything by spending more money. But eventually you run out of money.

The thing I like about Ryan's Soc Sec plan is that it gives everyone a chance to participate in a plan modeled after the thrift savings retirement plan enjoyed by federal employees. As a former federal employee, pretty much all of my coworkers loved the plan. Basically, the Soc Sec trust fund would be diversified and thus would yield a higher return. That way, you don't have to slash benefits. I agree that we don't have to give the rich a tax break like Ryan suggests. But we also shouldn't eliminate the tax cap and basically pull countless more billions out of the economy.

As far as tax rates go, it would be interesting to compare the revenue raised during Clinton with the revenue during Eisenhower. My guess is that there wasn't much difference. If you tax people at 90 percent, you get a lot fewer people willing to work. That's basic logic. Liberals hate the fact that people aren't all egalitarian idealists, but the fact remains that people are inherently selfish. Accept it and get over it. That said, I think a lot of thinking conservatives are finally realizing that supply side was a bunch of hooey and are open to raising taxes. They're just terrified to incur the wrath of the base if they say it in public.

The most interesting ideas right now are coming from the center-left. That's where the next great innovation in government is going to come out of. It's going to take a Bill Clinton (or perhaps an Ezra Klein) to get us out of this mess.

Posted by: DR721 | August 6, 2010 8:30 PM | Report abuse

"I don't think Ryan is a charlatan or a flim-flam artist."

But he is. Here are some examples

1. He is constantly talking about how many TRILLIONS of unfunded liability various entitlements have, but since he never says over what period they incur these liabilities, his statments are meaningless.

Suppose something loses a dollar a year. Then in 38 TRILLION years, it will have a $38 TRILLION unfunded liability, but an investment today of $25 at 4% will cover it's liability.

2. On Fox, Chris Wallace asked him about the CBO statement that an ideal tort reform program would only save 0.5% of health care costs max. Ryan said that did not cover savings due to reductions in defense medicine and said that they had no way of measuring that.

Actually the CBO said that 60% of the savings (0.3%) would be due to such a reduction and they got that figure by looking at the results in states with tort reform.

3. After Ryan said on C-Span that since small business have a lot of expenses like salaries, many of them earn over $250,000, I myself, moi, called up and told him that business expenses didn't matter; it was take home pay. He then mumbled about S-corporations. I think the figures is 2% of small business are in the top bracket.

Maybe I am wrong. Maybe he is just ignorant, but it comes out the same.

Posted by: lensch | August 6, 2010 8:37 PM | Report abuse

Your post reminds of the question of being smartly wrong or moronic right during the build-up to invasion of Iraqi.

There were people I really respect like Simon Schama or Andrew Sullivan advocating for the invasion of Iraq with great points while my moronic pothead roommate was totally against it "just cause." My roommate flunked out that spring, but he was right regardless how stupid he's reasons were while Simon Schama or Andrew Sullivan or others were brilliant wrong.

Ezra Klein seems to like people who are wrong, but smart rather then people who are right but without a brilliant rational behind it. That's fine, but I'm glad I listen to pothead roommate rather.

Posted by: Corey_NY | August 6, 2010 8:39 PM | Report abuse

Corey, are you comparing Paul Krugman to your pothead roommate?

Posted by: lensch | August 6, 2010 9:05 PM | Report abuse

I recently went to a dermatologist because of a suspicious mole on my neck. The doctor removed it and told me that I had some pre-cancerous cells on my shiny bald head. She recommended a form of treatment that she said was best "if my insurance covered it." I told her I had a high deductible plan with a health saving account and that I would be paying for it myself. She then gave me other cheaper options. After I decided what I wanted to do I shopped around to find out if I could get a better deal from the other two dermatologists in my town. This is how health care should work. There is nothing special about it. Costs will come down if subjected to market forces.

I know that this would not work for emergency care such as a heart attack, but it would work for every other health care need if we had to pay for it in the same way we pay for everything else. Are you not the least bit curious as to why the medical procedures that are typically not covered by insurance such as abortions, laser eye surgery, and breast enlargement have not risen in price more than inflation?

Posted by: cummije5 | August 6, 2010 9:15 PM | Report abuse

I'm a huge fan of your work, Ezra--I rely on you for the wonk policy details!

In connection with Ryan, though, I want to suggest that you need to ponder the problem of *false consciousness*--the man is probably quite sincere (especially compared to the purest tools like Eric Cantor and John Boehner), but that is actually quite beside the point here, and what makes him dangerous.

Let's look at two books about the dangers of a certain kind of unreflective, ideologically-driven, careerist simplicity and true believing: Garry Wills' Reagan's America, and Hannah Arendt's Eichmann in Jerusalem.

Both those books show as clearly as possible how a character like Ryan's--enthusiastic, possessed of an idea, personally amiable, a little vague on the details--is actually the most dangerous social character of all.

If you've read those, I ask you to consider whether Ryan isn't indeed the type they warn us against; if you haven't, please do! And then come back and tell us what you think.

In your spare time! But this is really, really important.

Posted by: KevinEgan | August 6, 2010 9:41 PM | Report abuse

cummije5 - Suppose your doc want to take a number of blood tests at 6 month intervals. Are you going to look up the statistics and argue with him as to their necessicity. Suppose these tests show your WBC dropping slowly but consistently for a number of years. Are you going to shop around to find the cheapest doc to diagnose what's the matter? And suppose it is leukemia. Are you going to shop around for the cheapest treatment? Will you have any idea what's the best treatment for you.

BTW all of the above happened to me. But this is just an example to show that the "free market" just doesn't work in health care.

Posted by: lensch | August 6, 2010 9:50 PM | Report abuse

lensch,

When you shop for a car I would not expect you to buy the cheapest one, but one that is affordable and meets yours needs. You should shop for a doctor in the same way you would shop for a prostitute, not necessarily the cheapest, but the best that you can afford.

Posted by: cummije5 | August 6, 2010 9:59 PM | Report abuse

1) How many Washington Post staffers were part of JournoList and, if there are any currently unnamed, who are they?

2) Will the Post be transparent and either release or order its staffers to release their contributions to the list?

3) Will the Post release the names and affiliations of all those on the list or have its staffers do so?

4) Did the Post know about JournoList when Klein was hired and that it was a “center to left” group? If yes, what does that say about the Post’s claims of neutrality?

5) Did actions on JournoList violate the Post’s ethical guidelines?

6) Has the Post revised or added any ethical guidelines as a result of this scandal?

7) Will the Post permit staffers to belong to or operate such lists in the future?

8) Does the Post often embrace “off the record” e-mail conversations with hundreds of people at a time?

9) Was Klein’s supervisor(s) on the list and were they monitoring what went on?

10) Has the Post examined the possibility that JournoList impacted Post news coverage?

11) How much did the Post look into JournoList before hiring Klein?

12) Were Klein and the other Post members of the list using it and posting to it on company time? If not, when were they doing so?

13) Did Klein and the other Post members write to the list using company equipment and offices?

14) Was Klein aware that some were using the list to boost the Obama campaign, such as adviser Jared Bernstein?

15) Did Klein attempt to enforce a rule against campaigning and, if so, how?

16) Did Klein post written guidelines for all members of the list? If so, what were those guidelines?

17) Klein had said on The American Prospect on March 17, 2009: “There are no government or campaign employees on the list.” That has been proven false. How did he try to monitor this issue? Were there other members of the Obama campaign and administration on the list?

18) Did Klein ban anyone from the list?

19) Has Klein or any other Post staffer (other than Dave Weigel) offered to resign because of their contributions to the list?

20) When Klein shut down the list, did he delete the list? If not, will the Post order him to release it so that readers may decide for themselves?

Posted by: JoeJeffersonn | August 6, 2010 10:04 PM | Report abuse

cummije5 - I have a good idea what kind of prostitute I want, but how can tell which doc is the best or what he proposes is reasonable?

Posted by: lensch | August 6, 2010 10:14 PM | Report abuse

Ezra, there is a slippery slope between disagreeing agreeably and being a sucker. I am afraid you are being played for a sucker. Krugman is right about Ryan's character and you are wrong.

Posted by: pwkennedy | August 6, 2010 10:22 PM | Report abuse

What I don't get Ezra is this: you never pushed Ryan on how or why he rigged the CBO evaluation of his plan. As a policywonk, you know you can get any result you want if you rig the criteria and limit the scope of the evaluation.

You provided a GOPer "thinker" access to your blog at the expense of asking basic questions any one of your readers would automatically ask. You have a great reputation and I've learned a lot from you. But your reputation took a hit on this one.

As Krugman wrote in his NYT column, "The Post ... 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."

In response to you, I think Krugman said it best in his blog: "Long ago — basically when I started writing for the Times — I decided that I would judge the character of politicians by what they say about policy, not how they come across in person. This led me to conclude that George W. Bush was dishonest and dangerous back when everyone was talking about how charming and reasonable he was. It led me to conclude that Colin Powell couldn’t be trusted, back when everyone said his UN speech clinched the case for war. It led me to conclude that John McCain was unprincipled and self-centered, back when everyone said he was a deeply principled maverick. And yes, it led me to conclude that Barack Obama was a good man, but far less progressive than his enthusiastic supporters imagined.

And so I don’t care how Paul Ryan comes across. I look at how he has gone about selling his ideas, and I see an unscrupulous flimflammer.

Think about that CBO report: getting the CBO to score only the spending cuts, not the tax proposals, then taking credit for being a big deficit reducer, is simply sleazy. Not acknowledging that the zero nominal growth assumption, not the entitlement changes, is driving that 2020 score is also sleazy. And the whole pose of stern deficit hawk, when you know that there are real questions about whether your plan actually increases the deficit, is phoniness of a high order.

And about that Tax Policy Center report: it has been five months since that came out. Has Ryan tried, at all, to address the concerns the center raised? As far as I can tell, he’s offered nothing but vague assurances of good intentions. Why should we believe him? Because he comes across as a nice guy? So did Bush.

Flimflamming is as flimflamming does. And Paul Ryan shows all the signs."

Come on, Ezra. What you did was wrong. Follow up with Ryan, see if he'll get a real CBO score.

Posted by: gregw571 | August 6, 2010 10:24 PM | Report abuse

lensch,

If you know what kind of prostitute you would want, then use the same criteria when shopping for a doctor; soft hands and a reassuring bedside manner.

Posted by: cummije5 | August 6, 2010 10:32 PM | Report abuse

cummije5 - That's not at all what I want in either.

But seriously, for 90% of the stuff you see a doc for you aren't in a position to exercise judgement. You just don't know enough. You may not know enough when you pick a car, but the decision ain't so serious. That makes shopping around to lower price in health care nonsense.

Posted by: lensch | August 6, 2010 10:38 PM | Report abuse

It's actually pretty simple: Ryan's numbers don't add up for most things.

Where they do add up, it's clear what his objective is: to cut taxes even more for the wealthiest 1% of the population and to cut government programs and benefits that are vital for the rest of us.

Why doesn't Ryan just say, "I believe that the best way to help everyone is to concentrate more and more wealth into the hands of the people at the very top. Then, they'll be nice to the rest of us and invest to create jobs."

It would at least be honest.

Posted by: snesich | August 6, 2010 10:43 PM | Report abuse

"I don't think Ryan is a charlatan or a flim-flam artist."

Well, unless he's an idiot, he's knowingly being very dishonest about very big important issues in tricky ways, like having the CBO only score the spending cuts and then saying that's the net savings for the program.

If you say this is not being a flim-flam artist by your definition, then you should at least, not to mislead, make clear that he is nonetheless being very dishonest here.

Posted by: RichardHSerlin | August 6, 2010 11:23 PM | Report abuse

What nonsense. Klein doesn't dispute any of Krugman's charges, most of which are pretty severe, yet says, in essence, Ryan is legit. Sorry, if what Krugman says is true, he ain't. So why is Klein wasting everyone's time apologizing for Ryan?

Posted by: tomoboe | August 6, 2010 11:33 PM | Report abuse

If Paul Ryan were honest about the costs and effects of his policy--however brutal they might be--I would agree that he is a Republican worth talking to. Since he is instead using accounting tricks that Enron would appreciate, I see no reason to take him any more seriously than Palin, Boehner, or the rest of the tax cut voodoo crowd.

He's not reaching across the aisle. He's just opening up another partisan warfare front; using dishonesty and gimmickry to make Republican policy ideas look better than they are, so the Republicans can claim to have an alternative.

Posted by: Dausuul | August 6, 2010 11:34 PM | Report abuse

Willingness to engage? You got to be kidding. Republicans don't play that game, and anyone who thinks they do is a fool.

Republicans play cut throat. Period. They pursue their policies, honestly if they can, dishonestly if the can't. They are untroubled by their own contradictions, such as deficits are bad when you are trying to help the poor but not a problem when you are trying to help the rich. They don't care if you call them dumb when they spout nonsense, because 1) that alienates the 99% of voters who have been insulted, and 2) better to be called dumb than to be called an evil deceiving liar.

And if you criticize them, well, you just hate America.

I have not seen Ryan deviate from the Republican playbook.

Posted by: thomasmatthew | August 7, 2010 12:07 AM | Report abuse

Ryan is a nut. Not like Angle in style but still crazy.

Krugman talks about the average tax cut for the top 1% but the real thing to note is the tax cut for the top 0.1% or perhaps the top 0.001%. From Ryan's official Roadmap 'Tax Reforms' page
http://www.roadmap.republicans.budget.house.gov/Issues/Issue/?IssueID=8514
"Promotes saving by eliminating taxes on interest, capital gains, and dividends; also eliminates the death tax."

This is billed as an assist to Joe Schmoe with a 401k, but what it is is a total federal tax exemption for billionaires. And their heirs. Forever.

Billionaires don't become such via salaries, even at $10 mil a year it would take 100 years to earn your first billion. Nope you become a billionaire by taking gains off of your equities and real property, or by dividends off those equities, or by interest on whatever cash instruments you may hold, or via the abomination called 'carried interest'. Unless I am missing something billionaires would pay tax on a tiny fraction of their lifetime earnings, be able to pass it on to their heirs tax free, who in turn could live generation after generation living tax free cashing their checks from the trust fund which after all earns its money from those same returns on assets.

Plus Ryan is proposing elimination of corporate taxes thus enabling even larger dividend payouts and so leveraging this whole process. He is proposing to give the Masters of the Universe a permanent Get out of Taxes Free Card.

This is Randism taken to the Nth degree. I get though violently disagree with the producer/parasite distinction glibertarians like to make. But extending 'producer' to Trustafarian grandchildren of billionaires is to fetish Capital itself. In Ryan World you wouldn't even have to manage your money, just let grandpa's investment firm handle all of that for you.

Trying to sell this as some deficit reduction plan is truly insane. And Ryan should not have been taken seriously.

Posted by: BruceWebb | August 7, 2010 12:42 AM | Report abuse

"1. He is constantly talking about how many TRILLIONS of unfunded liability various entitlements have, but since he never says over what period they incur these liabilities, his statments are meaningless.

Suppose something loses a dollar a year. Then in 38 TRILLION years, it will have a $38 TRILLION unfunded liability, but an investment today of $25 at 4% will cover it's liability."

Not quite true. In 2003 someone got the Trustees or the Chief Actuaries of Social Security and Medicare to include a new measure of Trust Fund Solvency. The proposed that in addition to the standard scoring of the gap between projected cost and projected income over the standard 75 year window, that this gap (aka unfunded liability) should be scored over the God Help Us 'Infinite Horizon'. So no Ryan is not suggesting a 38 trillion year liability, just one extending to Heat Death of the Sun, something only a few billion years away.

And I am not kidding they officially call it 'Infinite Horizon' From the 2010 Social Security Report http://www.ssa.gov/OACT/TR/2010/IV_LRest.html#267528

Posted by: BruceWebb | August 7, 2010 12:59 AM | Report abuse

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Posted by: sharonjo6 | August 7, 2010 1:02 AM | Report abuse

@ioancuza: Brings up a good point with respect to Ryan's record of fiscal conservatism - namely, that Paul Ryan voted IN FAVOR of Medicare Part D, a program that everyone knew at the time would raise the deficit significantly. Even in 2003, many were warning of Medicare's impending insolvency.

http://clerk.house.gov/evs/2003/roll669.xml

Ryan has seldom, if ever, been asked to reconcile that vote with his recent calls for fiscal austerity. I certainly don't recall him ever being held accountable for that vote.

Posted by: atlasfugged | August 7, 2010 3:32 AM | Report abuse

Ezra,
I'm afraid Krugman is schooling you. Ryan is in part your monster. You are raising his profile and are supposedly "reaching across the aisle". You are co-responsible for the Ryan "buzz". Unfortunately, as Krugman, says, his ideas are just hogwash.

So, why support hogwash? Because it's "bipartisan" (not that you are speaking for the Dems)?

Posted by: michaelterra | August 7, 2010 5:05 AM | Report abuse

I suspect I am just joining a chorus, and don't want to participate in a flimflame war, but I note that Paul Krugman defends his claim that Ryan is a flimflammer. Krugman's case seems to me to be air tight rock solid. I think your claim the Ryan is not a flimflammer has been proven false and you should post a correction.

The main fraud committed by Ryan was to claim that the CBO said his plan would cut the deficit when he ordered the CBO to make an absurd assumption about tax revenues. It seems to me that if a CEO had ordered his accountants to do such a thing and then presented the results to shareholders as Ryan presented the results to voters, then that CEO would be on trial (quite possibly in jail).

Let me attempt to understand what the hell made you argue that Ryan is not a flimflammer. I think you misstated your view which is that Ryan is less of a flimflammer than most Republicans including the leadership in both houses.

This assertion is perfectly consistent with Krugman's claim that Ryann is a con-man fraud. That was an absolute claim. He's less dishonest than Mitch McConnell" is consistent with "The main is a flimflammer"

Posted by: rjw88 | August 7, 2010 5:17 AM | Report abuse

When the Democrats lose the House in November, there will be no more excuses for us liberals. The American people are not worthy of our compassion anymore.

I have sadly come to the conclusion that our recent disasters with finance and oil drilling were simply not severe enough to teach us a lesson. We liberals may have to openly embrace austerity, deregulation, and cuts in health care just to make the point.

Maybe we need to try tough love. More suffering please.

Posted by: Neal3 | August 7, 2010 5:23 AM | Report abuse

lensch,

"90% of the stuff you see a doc for you aren't in a position to exercise judgement. You just don't know enough." - I disagree. I have been paying for the health care for my family of four out of my savings account now for three years. It is only 10% of the stuff you see a doctor for that you are not in a position to exercise judgement. Try it. Before you go to get your WBC next time, call around to a few clinics and ask how much they charge for the procedure. You will be surprised at the difference. Next time your doctor recommends some course of treatment don't sit there like a bobble head doll nodding your head in agreement. Ask him what are some other options, then instead of spending your time reading this blog, research them on the internet. Trust me, it works

Posted by: cummije5 | August 7, 2010 7:17 AM | Report abuse

"...decide him a bright spot." Can you please take a course in remedial grammar at a local community college?

Posted by: truck1 | August 7, 2010 8:36 AM | Report abuse

Erza, what you call a "closed loop," I think is better described as a "bubble." Still insular, still a closed system of its own making--but both deaf to other points of view or interactions, while transparent to its audience of gawkers and watchers.

It is often missed that the dialectics of the new media and greater interconnectivity has left us more separated (not isolated, but separated) than ever before. Cross talk is not engagement. The bubble has the function of making us look in, darkly; enthralled with what we see, harmless in our cries if not.
--Walter Rhett

Posted by: walterrhett | August 7, 2010 10:10 AM | Report abuse

You know Ryan's plan is getting traction when the shrill partisan Democratic hack Paul Krugman loads up his spittle and expectorates in his column.

There is no small irony in the fact that Obama and others rail against the Republicans as not providing ideas (the canard "Party of No"), and here is Ryan with a set of ideas. Of course, what ideas do the Democrats have...other than raising taxes (or letting tax cuts expire, whatever)or throwing even more ineffective Keynesian stimulus money at the problem? Alas, after that, their tank is empty.

Meanwhile, we have....what's the phrase I am looking for?...oh yeah, the Obama "flim flam" of dissing the whole idea of commissions...and then establishing a budget commission! To come up with ideas he doesn't have! Fancy that! Say one thing and do another. Whoda thunk it? Anyway, SOMEBODY has to come up with the plan.

And then we're back to Krugman. The former advisor to Enron invokes the Tax Policy Center at Brookings to bolster his argument and, alas, the sensible folks there have to immediately counter: see

http://taxvox.taxpolicycenter.org/blog/_archives/2010/8/6/4598007.html

where they conclude "Congressman Ryan’s proposal makes a useful contribution to this debate." Quite a contrast, eh?

Look, Ryan's plan is a DRAFT. He's said so. The criticism that his plan has revenue shortfalls is valid. I bet if the Democrats said, "let's work the revenue side of your plan to get it into balance" Ryan would jump at the chance (I believe it is one of the reasons he HASN'T done that...it's a gambit for dialogue). Of course, the Dems won't do that, because it would legitimize the seriousness of it. Instead, class warfare demagoguery -- via Paul Krugman -- is the order of the day.

Frankly, costs are much more projectable than revenues. We have actuarial tables to back them up. But revenues? The first order variable here is economic growth. If we grow the economy, tax revenue will grow. If the economy shrinks, tax revenue will shrink. Sometimes economics is very simple.

Finally, the liberals on here have to face a reality. RICH people build businesses (or fund them) and create jobs. That's how job growth works. If you take more of their money in taxes, they will consume less, invest less. Again, economics is sometimes simple.

Posted by: karl-keller | August 7, 2010 10:50 AM | Report abuse

Next up: Ezra discussing the important role of Rand Paul and the substance of his proposals. Stay tuned for another episode of "Should we or should we not listen to the advice of the galactically stupid!"

Posted by: Gray62 | August 7, 2010 12:28 PM | Report abuse

Ezra, you don't do the Republic a favor by facilitating dishonest debate. By all means engage conservative arguments, but do your homework and expose and address their obfuscations. And of course this holds for liberal arguments as well.

You have helped to create a false impression that Ryan is an honest broker on economic issues and this is clearly, substantively false. We have seen over and over how easily our polity accepts demonstratively dishonest or misleading policy proposals.

Please don't facilitate it. Time for a mea culpa, not retrenchment.

Posted by: wmrboh | August 7, 2010 12:48 PM | Report abuse

"Should we or should we not listen to the advice of the galactically stupid!"

Posted by: Gray62

there is no choice.
most bridges between democrats and republicans have been entirely burned down.
calling paul ryan names, and walking away from the last vestiges of a dialogue, would actually be the "galactically stupid" thing to do.
you cant just call him a flim flam man, and run away.
unfortunately,
in the real world, things dont work like that.
paul ryan is more intellectually accessible than other members of his party. the conversation is important.
you cant just insult every single person you disagree with, when the future of the country is at stake, call him a flim flam man, and run away.

what good is that going to do?
burn down every single bridge?
eradicate every last vestige of civility and good will?
take away any forum for the possibility of an influencing exchange of ideas?
resort to name-calling?
how exactly is not listening and not engaging, going to help?


Posted by: jkaren | August 7, 2010 2:23 PM | Report abuse

Ryan's plan cuts taxes for the rich while raising them on the middle and lower class, while slashing benefits for the elderly. I honestly don't know why anyone in the working class would still vote Republican. They're intellectually bankrupt.

The middle class in this country is being decimated, while the top one percent is amassing a larger percentage of the wealth every year. Is it any wonder why consumer demand is collapsing?

Posted by: SnowleopardNZ | August 7, 2010 2:40 PM | Report abuse

I will stand and say Paul Ryan is a flimflammer,and not "run" away. I would publicly use the American Indian saying and tell him "What you do speaks so loudly that I can't hear what you say anymore." Presenting his arguments with charm and congeniality does not change the side he is on or the interests he truly represents. He is he is still a force for privatization of Medicare, and leaving Americans with little more than sham, drudgery and broken dreams. I am with Krugman on this one.

Posted by: Polargirl25 | August 7, 2010 3:19 PM | Report abuse

It's no wonder Paul Ryan comes up with this nonsense, when you read some of the inept comments here... No, healthcare doesn't work as a completely free market, and making consumers increase their own transaction costs in time, energy, and worry is not a solution. No, taxation doesn't pull money out of the economy, it puts it right back in. No, rich people aren't the only ones who build businesses, lots of people build businesses... But if you want to build a country with a controlling aristocracy just like the Middle Ages, vote Republican!

Posted by: Lee_A_Arnold | August 7, 2010 6:41 PM | Report abuse

I wasn't going to weigh in on this until I saw Yglesias back Krugman. Briefly, I'd like to see you distinguish between "willingness to seriously engage with the other side" and "willingness to provide me with an on the record interview." Krugman and Yglesias and numerous commentors have hammered at the "serious" part; I think you ought to focus more on the second part. If Ryan were bringing 10 R's to Pelosi and attempting to horsetrade, THAT would be a "willingness to engage with the other side." Ryan coming to Ezra Klein for an interview is not necessarily.

Posted by: SamPenrose | August 7, 2010 6:46 PM | Report abuse

One of the problems with political chatter is that no one holds anyone accountable -- every opinion is offered without any test of its validity. I think Paul Ryan's plan isn't viable. I think Prof. Krugman rants about things for which his knowledge and common sense are woefully inadequate.

If I had to choose, I'd prefer Ryan. He's sincere and doesn't think he knows everything.

The anti-Ryan plan for health care is to cut costs. Let me suggest that this approach be used elsewhere. Let us give a mansion and a Rolls Royce to every family. We can do this by cutting the cost of mansions and Rolls Royces. Voila! I am a liberal genius. I should run for office -- president maybe.

There is no plan to cut health costs. There is only rhetoric. Eliminate waste and abuse -- really? Government thrives on waste and abuse. When government enters the market with its big checkbook and its casual attention to detail, it assures waste and abuse. It isn't just Defense Department hammers and toilet seats that are a ripoff.

Worse, the government isn't really ours. It allies itself with the insurance companies, hospitals, and doctors and pushes money in their direction -- for the very good reason that they return the favor. These megarich have every reason to dedicate their lives to getting government on their side -- it is their livelihood. The rest of us pay far less attention and care less -- so we must accept whatever crumbs the politicians offer to maintain our tolerance.

We live in a corrupt country, under a system that began corruptly (slavery, imperialism, etc.) and becomes more corrupt with each passing year. When liberals suggest more government will solve this problem, they must do so with amnesia and blindfolds. Reality doesn't support their illusions.

This is not to endorse the Republican view that the solution is less government or less taxation of the rich. Both Government and the rich are large and powerful interest groups. They help each other. They are not going to go away and neither wants government to be reduced in size.

It is fair to say that political blogs like this one will contribute to these bloated hogs continuing feeding their morbidly obese bodies. More government serves the rich better than the poor.

Paul Ryan's plan isn't a plan. More government spending for all the things we would like to have without paying for them isn't a plan. Cutting spending isn't a plan.

Maybe we should all just stop talking until someone offers a plan that really works -- and that politicians can be persuaded to adopt.

I'm not holding my breath.

Posted by: fredricwilliams@netscape.net | August 7, 2010 8:26 PM | Report abuse

Wow, you "progressives" really have a lot of pent up hate for republicans and anyone who even begins to try to disseminate their views. What you fail to realize is that you are in the minority and we conservatives surround you. You can call us names all you want, but it will not change the fact that our numbers will decimate your liberal representatives at the polls this November. Then the conservative ideas of less taxation, less spending, and more freedom from government intervention will be broadcast from every information source in the land and not just form an occasional interview on these left leaning blogs that you inhabit. My advice to you would be to cancel your cable and internet connection and stock up on Barbara Streisand albums, because that is the only way you will be able to avoid the conservative conversation that will dominate the airwaves.

Posted by: cummije5 | August 7, 2010 8:39 PM | Report abuse

The "conservative conversation" already dominates the airwaves, and it is incoherent and self-contradictory, as Ryan's proposal further demonstrates. One of the most interesting things about the current American scene is that the Republican Party may do very well indeed in the coming election, at the same moment as it is foundering internally for two different reasons: its economic ideology is intellectually bankrupt, and it has to pay lip-service to the economically illiterate and scientifically illiterate teaparty.

Posted by: Lee_A_Arnold | August 7, 2010 9:46 PM | Report abuse

fredricwilliams: "Maybe we should all just stop talking until someone offers a plan that really works -- and that politicians can be persuaded to adopt."

You may not have noticed, but the CBO Long Term Budget Outlook said last month that under "current policy" (which includes Obamacare, and expiration of the Bush Tax Cuts) the long-term budget deficit has been brought DOWN by 2/3rds.

Furthermore, considering that the CBO lowballed productivity growth (at only 2% per year?), lowballed population growth, and lowballed Obamacare cost-savings after 20 years because there is no analytical information beyond that time, we may as well say that the long-term budget is roughly BALANCED.

This hasn't been accomplished since Clinton, and the Republicans have never done it.

Now that still leaves us with paying off the debt accumulated from the current SHORT-term deficits, as well as dealing with things
that "current policy" doesn't include, like the annual Medicare "doc fix". Also, the long-term balanced budget grows slowly but steadily as a percentage of GDP, and the problem there is medical costs.

But we are at a really good place to start from. So if we want things to change, here is the chance. The method is simple:

(1) Insist that politicians stick to "paygo" -- i.e. no long-term spending that doesn't have new long-term revenue attached.

(2) In the same way, insist that anybody who wants permanent (long-term) tax cuts MUST propose very specific, long-term spending cuts in the SAME Congressional bill, so we can all see it and discuss it, before they pass it as one package deal.

(3) Very short-term stimulus (gov't spending or tax cuts or both, to help cure a recession) is a little different, in the following way: It must end in the same business cycle, so revenue can pay it off. Insist on it!

(3) Universal healthcare was the last part of the safety net that was missing, and it has now been accomplished, in theory. So let's stick with politicians who defend this safety net, and who understand that getting to long-term balanced budgets is the way to protect it.

Posted by: Lee_A_Arnold | August 7, 2010 10:15 PM | Report abuse

BruceWebb - What makes you think the human race will end with the death of the Sun?

cummije5 - I'm a 72 year old retired mathmatician. I have time to do research & I do. BUT most of the time I still have to trust a doc because medicine is not a science, but a mixture of science and art. I can tell my doc I don't want a PSA test (& I did 15 years ago), but I also have a funny looking mole and I have no way of shopping around to find the best guy to look at it.

Further, all this shopping around for minor stuff costs money, if not my money, somebody's money. For serious stuff (like leukemia), one just has no idea.

Posted by: lensch | August 8, 2010 8:27 AM | Report abuse

"

'I don't think Ryan is a charlatan or a flim-flam artist.'

But he is. Here are some examples

1. He is constantly talking about how many TRILLIONS of unfunded liability various entitlements have, but since he never says over what period they incur these liabilities, his statments are meaningless.

Suppose something loses a dollar a year. Then in 38 TRILLION years, it will have a $38 TRILLION unfunded liability, but an investment today of $25 at 4% will cover it's liability."

Lensch, this isn't what is meant by an unfunded liability.

An unfunded liability gives the dollar amount in present value terms necessary to cover a stream of cash flows into the future.

What you describe is a $25 unfunded liability, not a $38 trillion liability. The $25 asset completely covers the liability. At 4%, a $38 trillion liability is equivalent to a series of cash flows worth $1.52 trillion each year - we would need a $38 trillion asset paying 4%/yr in order to cover this liability.

Posted by: justin84 | August 8, 2010 8:38 AM | Report abuse

"In 2003 someone got the Trustees or the Chief Actuaries of Social Security and Medicare to include a new measure of Trust Fund Solvency. The proposed that in addition to the standard scoring of the gap between projected cost and projected income over the standard 75 year window, that this gap (aka unfunded liability) should be scored over the God Help Us 'Infinite Horizon'. So no Ryan is not suggesting a 38 trillion year liability, just one extending to Heat Death of the Sun, something only a few billion years away.

And I am not kidding they officially call it 'Infinite Horizon' From the 2010 Social Security Report http://www.ssa.gov/OACT/TR/2010/IV_LRest.html#267528"

Bruce, according to the financial report of the United States, the unfunded liabilities of our entitlement programs are $107 trillion over an 'infinite' horizon.

http://www.gao.gov/financial/fy2009financialreport.html

Are the trustees really trying to scare us about potential entitlement shortfalls millions, billions and trillions of years into the future? Not quite. Present value discounting restricts our attention to the near future.

Unfunded liabilities are the value of cash shortfalls discounted back to present terms. Using a 2.9% interest rate (per the 2009 intermediate scenario), $100 in 2159 is worth $1.37 in present value terms and in 2309 is worth $0.09. So unfunded liabilities over an infinite time horizon only really matters for several hundred years, with the first hundred years accounting having by far the highest weighting.

Why the infinite time horizon?

Well, the problem with the 75 year time horizon is that the 76th year is in much worse fiscal shape than the 1st year. Restricting yourself to a 75 year window means that the unfunded liability picture will keep getting worse and worse - also, any fixes made to the 75 year window might be undone in a generation as the fiscally balanced early years are rolled off and replaced with fiscally unbalanced future years.

As an aside, heat death refers to a possible death of the universe, not the sun.

http://en.wikipedia.org/wiki/Heat_death_of_the_universe

Posted by: justin84 | August 8, 2010 9:03 AM | Report abuse

The comments from the progressives here have one strong point: the tax isn't flat, it is regressive.

Not all income is taxed at the same rate, which can lead to wasteful tax arbitrage.

I know where Ryan is going with this, and it isn't "let's make the plutocrats richer". While that may be a consequence of his plan, I'm sure Ryan's real goal is to attract tons of outside capital to the United States, leading to soaring economic growth. If (a big if) other nations simply keep their taxes on capital the same, I'd expect this plan would actually succeed.

The rich would be very rich, but the United States would be much richer as a whole.

In any case, the fairness issue is likely to torpedo the lack of capital taxes in his plan to the extent his plan gains any traction, but this can be attacked from the Republican angle as well - people will do all they can to reclassify labor income into capital income to take advantage of the differences (e.g. the carried interest loophole today).

Posted by: justin84 | August 8, 2010 9:09 AM | Report abuse

Justin 84 - Good Comments. BUT using your (probably correct) definition of unfunded lialility, Ryan is still at fault for not mentioning the interest rate. Also such a projection relies heavily on the assumptions used staying the same for a very long time (hundreds of years). One thing we have seen about our ability to choose correct assumptions to use in economic projections is that it is severly limited. Remember in 1998 (or 9) the CBO projected surpluses for the next 10 years and the emptying of one of the Mecicare trust funds in 3 years.

Sometimes I think that for long term economic projections (say longer than 2 days), we would be better off with a good shaman, a goat , and a sharp knife.

Posted by: lensch | August 8, 2010 10:12 AM | Report abuse

justin84, According to http://www.ctj.org/pdf/regcg.pdf, cap gains tax in 1946 - 73 was between 25% and 36.5% From 2000 on, it was between 15% and 20%. It is hard to see in terms of debt/GDP or growth in real wages, or... how tha latter period was better than the earlier one.

BTW maginal rates in the first period were between 70% and 93%.

Posted by: lensch | August 8, 2010 10:18 AM | Report abuse

"what good is that going to do?
burn down every single bridge?"

Those are bridges to nowhere! Burning them down only results in less confusion, and less people taking the wrong way. There is no middle ground anymore with the rethuglicans. They have become fanatics and there can't be any compromise with their idiocy.

Posted by: Gray62 | August 8, 2010 1:38 PM | Report abuse

Ezra, sounds you're trying to find some basis for approving of Ryan, sort of like the "Best Smile" or "Most Improved" awards they give in grade school. (Because no one should go home without one. And after all, you work for a publication that's made it into an art form.)

But to be intellectually honest, never lose sight of the fact that with Republicans, you should never, ever mark on the curve. Voters need to see honest-to-God reality, not the comparative version.

Posted by: uberblonde1 | August 8, 2010 5:36 PM | Report abuse

"Justin 84 - Good Comments. BUT using your (probably correct) definition of unfunded lialility, Ryan is still at fault for not mentioning the interest rate."

The interest rates used for the various projections are publicly available, and it wasn't as if Ryan was involved with the calculation. I still think the biggest problem with Ryan's plan is that the wealthiest households pay a lower effective rate. A wealthy household could make all of its income from dividend and interest payments and only pay taxes via the 8.5% BCT. You don't even find support for such aggressive tax relief for the wealthy from Andrew Mellon. See pages 56-57.

http://www.archive.org/stream/taxationthepeopl033026mbp#page/n63/mode/2up/search/capital

"Also such a projection relies heavily on the assumptions used staying the same for a very long time (hundreds of years). One thing we have seen about our ability to choose correct assumptions to use in economic projections is that it is severly limited. Remember in 1998 (or 9) the CBO projected surpluses for the next 10 years and the emptying of one of the Mecicare trust funds in 3 years."

This is true, but as this example shows projection error cuts both ways. Our baseline projection shouldn't be one of insolvency.

"Sometimes I think that for long term economic projections (say longer than 2 days), we would be better off with a good shaman, a goat , and a sharp knife."

I think this is probably correct. We have some decent long-run economic performance data, but it makes a huge difference if GDP grows 1.5%/yr or 3%/yr over the next several decades, and I'd say both outcomes are roughly equally probable. That all said, I think we should design our spending programs such that under the baseline expectations we have no / small unfunded liabilities.

I'd prefer a system with a basic income grant paired with a flat tax on all income, and public hospitals on a tight and fixed budget. For fairness, efficiency, affordability and scope of government (rather than size) reasons.

Posted by: justin84 | August 8, 2010 6:00 PM | Report abuse

"justin84, According to http://www.ctj.org/pdf/regcg.pdf, cap gains tax in 1946 - 73 was between 25% and 36.5% From 2000 on, it was between 15% and 20%. It is hard to see in terms of debt/GDP or growth in real wages, or... how tha latter period was better than the earlier one.

BTW maginal rates in the first period were between 70% and 93%"

Lensch, while that's true, the Soviet Union too had strong growth in the 1950s and 1960s - stronger than the United States. Yet we can be certain that it was a fairly inefficient economic model. Most countries grew strongly in that period regardless of economic policies, until around the mid 1970s when growth hit a wall across the board. The nations which adopted neoliberal reforms tended to outperform after that period.

Per capita GDP in many European nations was catching up to the U.S. until the mid 1970s, after which point the catch up stalled, and from 1980-2010 U.S. per capita GDP has grown faster than in continental Europe. Scott Sumner has posted on data through 2008.

http://www.themoneyillusion.com/?p=5164

Singapore has very low marginal tax rates, and it is now richer than the United States, despite being roughly half as rich a generation ago (although in all fairness Singapore might best be compared to NYC than the U.S. as a whole, though it is rapidly gaining on NYC too, and will be richer than NYC in a few years).

Marginal tax rates aren't everything - European nations are hardly impoverished by taxes, and some of the underperformance can be explained by other factors such as restrictive labor market regulations. Perhaps there is a normative argument for preferring slightly poorer but more equal societies. Some nations, such as Denmark, score very highly on economic freedom rankings despite very high marginal tax rates.

One other point to consider - what were federal tax revenues like as a percent of GDP in the 1950s and 1960s? They really weren't much different than the 1980s or 1990s. My guess is that back then the top brackets collected very little tax revenue (both because they were set very high, and no one is going to bother earning income when all of it is taxed away).

If you applied a 90% tax bracket on income above $250,000 today, I'm quite sure the results would be catastrophic - if you set a 90% bracket for incomes over $20 million, there would likely be little difference in both economic effect and tax revenue generation (and probably less revenue overall).

Posted by: justin84 | August 8, 2010 6:19 PM | Report abuse

There is no middle ground anymore with the rethuglicans. They have become fanatics and there can't be any compromise with their idiocy."
Posted by: Gray62 |"

i dont believe paul ryan is a fanatic.
whether you think his arguments are disingenuous or intellectually dishonest, i dont think you can call him a fanatic, and burn your bridges with someone like him.
how do you live your life without finding "middle ground?" that makes you just as extreme.


that is just my opinion.

Posted by: jkaren | August 8, 2010 6:48 PM | Report abuse

I'd be more inclined to think that Ryan isn't a charlatan pushing ideological patent medicine if I hadn't read he passes out copies of Atlas Shrugged to his staff. That would be on par to something like Bernie Sanders passing out copies of "What Is To Be Done" to his aides - totally nuts. There simply are no Democrats serving - or liberals of any stripe - as ideologically bonkers as the right of the GOP.

Posted by: brucds | August 8, 2010 7:56 PM | Report abuse

Paul Ryan's Roadmap isn't Randian.

Ayn Rand would have condemned Rep. Ryan as one of those horrible statists, because his roadmap sends 16%-19% of the economy to the federal government in the form of taxes (and is probably consistent with 30-35% going towards government at all levels).

As I understand it, Ayn Rand believed that voluntary contributions for services rendered are the only legitimate form of government revenue.

Rand would have also opposed Ryan's plan for Social Security and Medicare in the sense that they aren't abolished entirely.

Ryan's roadmap might be much more generous to the wealthy than the status quo, but it isn't anywhere close to Randian.

Posted by: justin84 | August 8, 2010 10:59 PM | Report abuse

Ezra Shrugged.

To downplay diametrically opposed values, goals, and standards, and allow Ryan to clear a bar that is so low it's practically on the ground is to do substantive debate a major disservice.

This kind of posturing does not elevate discourse. On the contrary, it renders it pointless by propping up the demonstrably idiotic... like Randian Paul Ryan.

I hope you'll take a second to listen to this guy:

http://www.prospect.org/cs/articles?articleId=11656

"It's counterintuitive, to be sure, but it may be that the only way to ratchet down tensions is for both sides to come armed. And that can't happen so long as liberals believe that, deep down, conservatives don't really want to fight. For now, however, rapprochement is a decidedly second-tier consideration. I'm certainly a typical liberal softie who thrilled to The West Wing's world of comity and compassion. But nowadays, I'm also a post-Bush liberal: As much as I want us to all just get along, I'm much more interested in seeing us win."

What he said.

Posted by: michael_conrad | August 9, 2010 12:43 AM | Report abuse

"i dont believe paul ryan is a fanatic."
You just fall for the image of reasonableness that he puts up. That's like McCain did when he was on the height of his popularity. But then you look at the arguments and not the man, you see the usual dishonesty about the numbers, the typically distorted logic, and the same old hidden agenda. The package may be more attractive, but inside it's the same old nonsense. And dealing with this is just a waste of time.

"how do you live your life without finding "middle ground?" that makes you just as extreme."
Actually, the whole expression "middle ground" is misleading. The republicans have become the party of the rich long ago, and they don't dfeliver anything of value for the vast majority of the people. There can't be any middle ground with them, to meet them you have to move to the far right side. And then, any compromise would benefit big money much more than the average Joes.

So, appeasement is no solution, but a road to ruin! And every bridge on that way is a bridge too far.

Posted by: Gray62 | August 9, 2010 5:25 AM | Report abuse

"The republicans have become the party of the rich long ago, and they don't dfeliver anything of value for the vast majority of the people. There can't be any middle ground with them, to meet them you have to move to the far right side. And then, any compromise would benefit big money much more than the average Joes."


unfortunately, that is the system we have presently.
there is no choice, but to work with them, and find middle ground, and it looks like there will be more of them soon.
this is a terrible time.
no-one will deny that....but insulting paul ryan, i dont think is going to result in a transformation in his thinking.
quite the opposite.

there has to be some/any/one relationship between both sides of the aisle. burning all bridges is just not the answer, in my opinion.

Posted by: jkaren | August 9, 2010 10:08 AM | Report abuse

@cummije5, If more people like you & me used this thought process all Americans would be able to afford HC no matter where they lived. Maybe Ezra could do a write up on why are there 2 different cost for procedures e.g one price if Insurance covers the procedure and a different price if you don't have Insurance ? IMO I think HC insurance should be scrapped all together and get back to basic insurance that would only cover incidental procedures if one was to suddenly have a heart Attack, involved in a auto accident or other major accidents & the rest like running noses, Check ups, physical exams are paid out of pocket and when you get Millions paying for this it's becomes like anything else the cost drop dramatically. It's pure simple economics the more people buy or pay for the cheaper something becomes period !!!

Lets take Laptops for an almost perfect example. It wasn't just within the last 10yrs that the price for a Laptop started to drop from the high prices of thousands to the current price on average $300 today !! When the PC makers Dell, HP and others dropped their prices more & more people started to buy them & as we all know when the market becomes flooded with the price of goods drops, so therefore the same would obviously happen for HC when the price is affordable for all to part take and able to afford just like we all go to the store and buy a loaf of bread it's cheap because we have the masses buying the same type of product.

The one major part of HC that needs full redress is in the area of Tort reform to cap the incredibly high court awards for Doctors who in most cases didn't order X procedure where the courts are tricked into thinking that had the Doctor order this or that procedure the patient would of died or not become deftly ill ect.. ect.. The bottom line is People have to start taking responsibility for there own action and whereby in doing so would relieve the rest to not be heal accountable for those whose action are deceiving to gain fortunes at the expense of us who do the right thing unless it's cut & dry there was pure negligence on the other party.

Blame GE and other medical devise makers for continually making Cat Scan machine better & Better because if the doctor doesn't prescribe the best Cat scan leaves the door open for litigation where it inevitably drives our cost in HC up & up & up. where and when will society stop and say enough is enough that people who play sports, do crazy & stupid things that insurance should always have to pay and where those of us who understand that by part taking in such behavior is dangerous and insurance shouldn't cover those cost. This HC BS is so simple to fix all we have to do is get back to basics of living and taking responsibility for our personal behavior

Posted by: dwenzel2 | August 9, 2010 12:44 PM | Report abuse

The transformation in thinking does not need to occur in Paul Ryan but in the American voters who support the republican party no matter what its agenda. We need more exposure of the party's extremely detached elite lifestyle, such as Boehner's golfing and McCain's uncountable number of houses, and the disparity between the aristocratic republicans and the rest of us needs to be emphasized. Their interests are why they're "on the other side of the aisle". Looking for "middle ground" with republicans is akin to letting the nose of the camel into the tent. Sometimes there is no middle ground, such as the recent emergency relief bill for 9-11 first responders. I still can't understand the middle class that responds at the ballot box with "We don't need no education or health care!" They're the darling puppets of Frank Luntz and the republican manipulators. I know, I was raised by a lifelong republican, who struggled for years defending the party as still being the party of Goldwater and Nixon fiscal and service-to-America philosophy. She finally recognized the party's takeover by neocons, religious dogmatics and the moral hygiene hypocrites, but only this spring. I hope that if an 87 year old eventually can see the light, some of those who are in denial and stay bound to the party "for old time's sake" will see it too. What is Paul Ryan's financial worth? What is his lifestyle? His income? Not likely to be in the "middle" of American income status, is it?

Posted by: Polargirl25 | August 11, 2010 4:47 PM | Report abuse

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