Krugman explains what's in the Ryan plan

In the interest of keeping you informed, I bring you the Professor, briefly back from vacation, to offer the low-down on Paul Ryan's budget plan.

You've probably heard it vilified. You've probably not heard it explained.

According to Krugman, the Ryan budget has two phases, the first ten years, prior to the conversion of Medicare to VoucherCare, and the years after that conversion.

Krugman on the first ten years (all emphasis mine):

In the first decade, the big things are (i) conversion of Medicaid into a block grant program, with much lower funding than projected under current law and (ii) sharp cuts in top tax rates and corporate taxes.

Is this a deficit-reduction program? Not on the face of it: it’s basically a tradeoff of reduced aid to the poor for reduced taxes on the rich, with the net effect of the specific proposals being to increase, not reduce, the deficit.

How does Ryan get to claim that the deficit will be reduced in this phase? "Magic asterisks" — assertions that can't possibly be true, but which everyone accepts anyway:

First, he insists that the tax cuts won’t reduce revenue, because they’ll be offset with unspecified “base-broadening”.

"Base-broadening" means broadening the tax base (taxing more things and/or closing loopholes). Right; lift your glass and say "Never gonna happen."

Second, there are large assumed cuts in discretionary spending relative to current policy[.]

Both of these assertions (magic asterisks) were made without the hint of a shred of a list showing what would be done to achieve them. That's what makes the asterisks magic; like Tinker Bell, you just gotta believe.

After the first ten years, VoucherCare starts to kick in, which transfers a whole lot of medical costs back to Granny (and all of the suckers who voted for him). But the plan is still not a deficit-reduction plan unless there are major cuts to ... ready? ... the military:

[M]uch of the supposed deficit reduction comes not from Medicare but from further cuts in discretionary spending [which eventually falls] to 3.5 percent of GDP ... this number includes defense, which is currently around 4 percent of GDP.

Of course these are just lies to fool the eagerly-fooled press and the right-wing rubes. The plan's proponents know these are just assertions.

All you need to know? Ryan proposes:

[S]lashing Medicaid, cutting taxes on corporations and high-income people, and replacing Medicare with a drastically less well funded voucher system.

It's the asterisks that make this look like "deficit reduction."

GP

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