Economics: The Flimflam Man

[Representative Paul] Ryan has become the Republican Party's poster child for new ideas thanks to his “Roadmap for America's Future,” a plan for a major overhaul of federal spending and taxes.

At Mr. Ryan's request, [the Congressional Budget Office] produced an estimate of the budget effects of his proposed spending cuts — period. It didn't address the revenue losses from his tax cuts.

The nonpartisan Tax Policy Center has, however, stepped into the breach. Its numbers indicate that the Ryan plan would reduce revenue by almost $4 trillion over the next decade. If you add these revenue losses to the numbers The Post cites, you get a much larger deficit in 2020, roughly $1.3 trillion.

And that's about the same as the budget office's estimate of the 2020 deficit under the Obama administration's plans. That is, Mr. Ryan may speak about the deficit in apocalyptic terms, but even if you believe that his proposed spending cuts are feasible — which you shouldn't — the Roadmap wouldn't reduce the deficit. All it would do is cut benefits for the middle class while slashing taxes on the rich.

The Tax Policy Center finds that the Ryan plan would cut taxes on the richest 1 percent of the population in half, giving them 117 percent of the plan's total tax cuts. That's not a misprint. Even as it slashed taxes at the top, the plan would raise taxes for 95 percent of the population.

For more, see The Flimflam Man by Paul Krugman, August 5, 2010, at The New York Times.

In How To Read A CBO Report on August 6, 2010, Krugman quotes the CBO report as saying ...

The proposal would make significant changes to the tax system. However, as specified by [Paul Ryan's] staff, for this analysis total federal tax revenues are assumed to equal those under CBO's alternative fiscal scenario (which is one interpretation of what it would mean to continue current fiscal policy) until they reach 19 percent of gross domestic product (GDP) in 2030, and to remain at that share of GDP thereafter.