Tuesday, April 19, 2011

Faith Restored

So Paul Ryan's budget plan is designed to reduce expenditure largely by:

A) privatizing Medicare - turning it into a voucher system where the elderly can take their vouchers and go buy private insurance.

B) turning Medicaid into block grants to states (they're supposed to spend that block grant on healthcare for the poor, but conceivably they could spend it on anything they wanted).

It's also designed to reduce revenues by:

C) cutting taxes on the wealthy.

Yes, you read that right. Supposedly the solution to our national debt crisis is to completely gut the healthcare protections for the poor and elderly while giving additional tax cuts to the wealthy (down to 25% from the current top marginal rate of 35%).

Ryan claims that cutting taxes on the wealthy will increase revenue, which is a canard I've addressed previously. If you want to create jobs, you should focus on reducing the costs to businesses to hire new workers, not reduce the tax burden of people who make most of their money through investments. (I address jobs, because this is always the argument from the right - lower taxes spurs economic growth).

Ryan's tax plan isn't overly troubling to me, because he claims that the tax rates will be reduced across the board by closing common loopholes to make the tax plan changes revenue neutral. I think a complete tax code reform is long past due. As GOP presidential maybe-hopeful Mitch Daniels has been purported to have said, "It's time to have a tax code that looks like it was designed on purpose." This was originally attributed to Bill Simon, but anyway. It's a great idea. A simplified tax code could, indeed, have lower tax rates and increase revenue by having far fewer loopholes. The trouble is that to actually get to revenue neutral on Ryan's plan you'd have to do some things we don't have any hope of doing to the tax code - like eliminating the mortgage interest deduction and taxing capital gains as income. Doubt either of those things will happen anytime soon.

Ryan's healthcare plan is terrifying to me. First of all, how on earth can anyone expect senior citizens (those who use the health care system more than any other age group) to get reasonable rates for health insurance on the open market? That's unpossible!

And how many states do we really trust to use their block grants to provide health care to their poor when we can't currently trust states to provide health care for their poor when there are strings attached to the funding? It's just not going to happen. No way, no how.

So why is this blog post entitled, "Faith Restored"? Mainly because a recent McClatchy-Marist poll found that the American people know better and aren't going to fall for Ryan's abysmal budget plan as the solution to our problems.

64% of Americans approve of an increase on taxes for people making over $250,000/year.

80% of Americans oppose cutting Medicare and Medicaid  to reduce the deficit.

31% of Americans think the country is heading in the right direction (down from 41% since January).

Paul Ryan's debt reduction plan is a joke. But the bigger joke is how much positive press he got over it. Fortunately, the American people appear immune to the nonsense and still support realistic solutions to our problems.

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