Quote Of The Day

Published on 4/7/2011 in Economics and HealthCare. 13 Comments

“Over the next few days you will read a lot of “downgrade and dismiss” directed at Paul Ryan and his plan and indeed it is quite possible his proposal is not a workable one (I haven’t read it yet).  But don’t fall for the downgrade and dismiss bait, keep on returning to the question of how much individual choice should be allowed into health care cost control.  Why not divvy up the cost control work between the Board and some degree of individual choice across Medicare benefits?  You don’t have to combine that choice with the cost-increasing aspects of Medicare Advantage-like plans.” — Tyler Cowen, on the benefit of giving consumers more choice in Medicare

13 Responses to “Quote Of The Day”

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  • LaurenceB
    4/7/2011 at 6:41 pm

    I guess I need a Republican to explain to me why decreasing the tax rate for the wealthy and for corporations should be part of a plan to solve our deficit problems.

    I’ll be sitting over here, waiting…

    In the meantime, I’ll just point out once again that simply allowing the Bush tax cuts to expire, and making significant, but reasonable cuts in defense spending would work every bit as well as Ryan’s plan.

    So, please don’t say I don’t have a plan.

  • HispanicPundit
    4/8/2011 at 9:30 am

    It’s not just decreasing the tax rate – its broadening the base and removing deductions. That can increase tax revenue. That is after all, part of what the deficit commission recommended. See here.

  • LaurenceB
    4/8/2011 at 12:46 pm

    Hmmm… I hardly know where to start…

    First of all there’s no rule anywhere that says we can’t both eliminate deductions AND ALSO maintain (or even increase) the tax rates for the wealthy. Indeed, we could choose to both eliminate tax breaks for the wealthy by choosing not to extend the Bush tax cuts AND ALSO eliminate deductions. In fact, that’s precisely what someone who was serious about deficit reduction would do! But, instead, Ryan has chosen to pay for the tax breaks for the wealthy with tax increases on the broader base of taxpayers.

    Second, Ryan has not actually spelled out specifically which tax expenditures that will be eliminated. For example, there has been a lot of talk about eliminating mortgage interest deductions (and I’m all in favor of that), but do you really think that that is politically viable? I don’t. Indeed, I suspect when we get down to the specifics of this “plan”, very little of it is actually going to happen. A “serious” proposal needs to be more specific – this is just hand-waving.

    I guess that’s enough for now.

  • HispanicPundit
    4/8/2011 at 2:11 pm

    Granted – his plan needs more details. But atleast he has a long-term plan. Also, most of what you said can also be said about the Democrats with ObamaCare (their “cuts” and “savings” are dubious, and politically tenuous).

  • LaurenceB
    4/10/2011 at 1:21 pm

    HP,
    I’m still waiting. As soon as some Republican can explain how cutting taxes for rich people helps balance the budget, feel free to speak up.

  • HispanicPundit
    4/10/2011 at 8:49 pm

    LaurenceB,

    Would you make the same argument regarding government spending (ie fiscal stimulus)? Certainly you agree that increasing fiscal stimulus does not balance the budget, right?

  • LaurenceB
    4/11/2011 at 1:15 pm

    Lots of things don’t remedy our deficit issues… Giraffes, for example. But nobody expects or claims that giraffes will help balance the budget.

    Likewise, if there was someone who claimed the stimulus package would reduce the deficit, than that person was wrong. The same goes for giraffes.

    Paul Ryan, on the other hand, has produced a plan specifically meant to address deficit issues in which he has chosen to include tax cuts for rich people. How does that reduce the deficit? Please explain.

    I’ll just patiently wait over here while you think it over.

  • HispanicPundit
    4/11/2011 at 3:01 pm

    LaurenceB,

    This is how Greg Mankiw, professor of economics at Harvard, explains it:

    Economists call the Blowhard plan a “tax expenditure.” The tax code is filled with them — although not yet one for snipe hunting. Every time a politician promises a “targeted tax cut,” he or she is probably offering up a form of government spending in disguise.

    Erskine B. Bowles and Alan K. Simpson, the chairmen of President Obama’s deficit reduction commission, have taken at hard look at these tax expenditures — and they don’t like what they see. In their draft proposal, released earlier this month, they proposed doing away with tax expenditures, which together cost the Treasury over $1 trillion a year.

    Such a drastic step would allow Mr. Bowles and Mr. Simpson to move the budget toward fiscal sustainability, while simultaneously reducing all income tax rates. Under their plan, the top tax rate would fall to 23 percent from the 35 percent in today’s law (and the 39.6 percent currently advocated by Democratic leadership).

    This approach has long been the basic recipe for tax reform. By broadening the tax base and lowering tax rates, we can increase government revenue and distort incentives less. That should command widespread applause across the ideological spectrum. Unfortunately, the reaction has been less enthusiastic.

    See more here. Now granted, he could have just reduced tax expenditures without also reducing the top marginal tax rate but that would have harmed the economy and certainly the recovery. In other words, Paul Ryan’s plan seems to be to reduce the deficit and cause the least harm to the economy and recovery as possible.

  • LaurenceB
    4/11/2011 at 5:54 pm

    So, if I understand this correctly -

    Everybody will share the burden of tax increases (through the elimination of tax expenditures) in order to balance the budget. Meanwhile, the rich will get tax cuts (through a much lower tax rate and the extension of the Bush Tax Cuts) in order to keep the recovery moving ahead.

    OK.

    May I make a humble suggestion?

    Why don’t we increase taxes on the wealthy to balance the budget, and then decrease taxes on all of the rest of us to keep the recovery moving ahead? Wouldn’t that work just as well?

    I’m sorry if that’s a dumb question, I’m kind of new to how this magical world of rich people’s tax breaks works.

  • Fernando
    4/12/2011 at 1:21 pm

    LaurenceB it will not work.

    One of the main reasons is called “Strategic Alliances”.

    The companies will just move offshore, and I might add with your own groups’ blessings, but here is the fun part.

    Saudi Arabia is already making overtures towards Russia and Iran.
    Your group is already on a thin wire in Latin America.

  • LaurenceB
    4/13/2011 at 8:10 am

    Still waiting.

  • HispanicPundit
    4/13/2011 at 9:11 am

    That would certainly work to. How about a better suggestion?

    Why dont we significantly reduce government programs funding significantly? EPA. Education. Agriculture. HUD. etc. That too would balance the budget – and better yet, those jobs cant simply move overseas.

  • Fernando
    4/14/2011 at 3:41 pm

    Okay LaurenceB stay and wait for as long as you want, but the facts remain.

    Oh! and Hispanicpundit this administration is out-sourcing jobs as well. The majority of this Government program is out-sourced and aimed at our group.

    http://www.usac.org/about/universal-service/

    It also goes to the argument of taxes for the rich, but I am NOT posting it anywhere else.

    For the simple reason that it CAN be used against our own group.

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