Friday, 19 December 2014 / TRUTH-OUT.ORG

From American Conservatives, Voodoo Economics

Thursday, 02 June 2011 08:45 By Paul Krugman, Truthout | Op-Ed
From American Conservatives Voodoo Economics

About 80 percent of Dr. Rachel Chatters’s patients in Louisiana are on Medicaid. (Photo: Michael Stravato for the New York Times)

So Representative Paul D. Ryan, the House Budget Committee chairman, recently gave a big speech defending his budget plan — and demonstrated, in case you were wondering, that there’s no “there” there (and there never was).

Remember how everyone declared that Mr. Ryan was a serious person, truly willing to face up to the United States’ deficit problem? Well, now he’s out there denouncing the way “the budget debate has degenerated into a game of green-eyeshade arithmetic” — in other words, enough with all these numbers.

And his answer to the deficit now is that we have to grow our way out.

There’s a name for that: voodoo economics.

And in fact almost his whole speech, delivered earlier this month to the Economic Club of Chicago, was standard supply-side boilerplate: Low taxes are the secret to growth, nobody ever solved a deficit problem by raising taxes (President Clinton, anyone?). Mr. Ryan even denounced austerity.

The only original things he had to say, if you can call them that, involved health-care costs and monetary policy.

On health-care costs, he declared that “Our plan is to give seniors the power to deny business to inefficient providers.”

Remember, what the Ryan plan actually does for Medicare is hand out vouchers whose value will fall well short of the cost of coverage. So how much power do those Americans who can’t afford decent health insurance have right now in their dealings with providers? If you think people who don’t get coverage through their employers have the upper hand, you believe that the Ryan plan is empowering.

Click here to sign up for Truthout’s FREE daily email updates.

And then there’s the claim that hard money is the key to growth. According to Mr. Ryan, “we have to refocus the Federal Reserve on price stability … because businesses and families need sound money.”

Milton Friedman turned over in his grave.

Basically, again, what we’re getting here is standard right-wing voodoo. Mr. Ryan turns out to be an empty suit, parroting the usual line. What’s remarkable is that for a year or so this empty suit was hailed — by self-proclaimed centrists as well as the right — as a brilliant, brave champion of fiscal responsibility.

Think of the Children

One of the favorite lines of austerians is to claim that they’re concerned, above all, with the future of our children. Mr. Ryan says it all the time. So a couple of interesting points: First, as Timothy Egan, a contributor to The New York Times’ Opinionator series, put it, the key political calculation behind the Ryan plan was the belief that seniors would be greedily concerned only with their own benefits: “The plan’s architect, Representative Paul Ryan of Wisconsin, drew a line in the actuarial sand: Anyone born before 1957 would not be affected. They could enjoy the single-payer, socialized medical care program that has allowed millions of people to live extended lives of dignity and decent health care,” Mr. Egan wrote on May 16. “And their kids and grandkids? Sorry, they would have to take their little voucher and pay some private insurer nearly twice as much as a senior pays for basic government coverage today. In essence, Republicans would break up the population between an I’ve Got Mine segment and The Left Behinds.”

And Mr. Egan doesn’t even mention the fact that while Medicare cuts would be postponed, Medicaid — government aid for poor Americans — would face savage cuts right away. And while much of Medicaid’s spending is on nursing care, many of its beneficiaries are children. In fact, as Timothy F. Geithner, the secretary of the Treasury, pointed out recently, at this point 40 percent of children born in America are on Medicaid. So the actual content of the Ryan plan is pro-geezer, anti-child. Because nothing serves the nation’s future more than making sure future citizens lack adequate health care and nutrition.

Truthout has licensed this content. It may not be reproduced by any other source and is not covered by our Creative Commons license.

Paul Krugman joined The New York Times in 1999 as a columnist on the Op-Ed page and continues as a professor of economics and international affairs at Princeton University. He was awarded the Nobel in economic science in 2008.

Mr Krugman is the author or editor of 20 books and more than 200 papers in professional journals and edited volumes, including "The Return of Depression Economics" (2008) and "The Conscience of a Liberal" (2007). Copyright 2011 The New York Times.


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From American Conservatives, Voodoo Economics

Thursday, 02 June 2011 08:45 By Paul Krugman, Truthout | Op-Ed
From American Conservatives Voodoo Economics

About 80 percent of Dr. Rachel Chatters’s patients in Louisiana are on Medicaid. (Photo: Michael Stravato for the New York Times)

So Representative Paul D. Ryan, the House Budget Committee chairman, recently gave a big speech defending his budget plan — and demonstrated, in case you were wondering, that there’s no “there” there (and there never was).

Remember how everyone declared that Mr. Ryan was a serious person, truly willing to face up to the United States’ deficit problem? Well, now he’s out there denouncing the way “the budget debate has degenerated into a game of green-eyeshade arithmetic” — in other words, enough with all these numbers.

And his answer to the deficit now is that we have to grow our way out.

There’s a name for that: voodoo economics.

And in fact almost his whole speech, delivered earlier this month to the Economic Club of Chicago, was standard supply-side boilerplate: Low taxes are the secret to growth, nobody ever solved a deficit problem by raising taxes (President Clinton, anyone?). Mr. Ryan even denounced austerity.

The only original things he had to say, if you can call them that, involved health-care costs and monetary policy.

On health-care costs, he declared that “Our plan is to give seniors the power to deny business to inefficient providers.”

Remember, what the Ryan plan actually does for Medicare is hand out vouchers whose value will fall well short of the cost of coverage. So how much power do those Americans who can’t afford decent health insurance have right now in their dealings with providers? If you think people who don’t get coverage through their employers have the upper hand, you believe that the Ryan plan is empowering.

Click here to sign up for Truthout’s FREE daily email updates.

And then there’s the claim that hard money is the key to growth. According to Mr. Ryan, “we have to refocus the Federal Reserve on price stability … because businesses and families need sound money.”

Milton Friedman turned over in his grave.

Basically, again, what we’re getting here is standard right-wing voodoo. Mr. Ryan turns out to be an empty suit, parroting the usual line. What’s remarkable is that for a year or so this empty suit was hailed — by self-proclaimed centrists as well as the right — as a brilliant, brave champion of fiscal responsibility.

Think of the Children

One of the favorite lines of austerians is to claim that they’re concerned, above all, with the future of our children. Mr. Ryan says it all the time. So a couple of interesting points: First, as Timothy Egan, a contributor to The New York Times’ Opinionator series, put it, the key political calculation behind the Ryan plan was the belief that seniors would be greedily concerned only with their own benefits: “The plan’s architect, Representative Paul Ryan of Wisconsin, drew a line in the actuarial sand: Anyone born before 1957 would not be affected. They could enjoy the single-payer, socialized medical care program that has allowed millions of people to live extended lives of dignity and decent health care,” Mr. Egan wrote on May 16. “And their kids and grandkids? Sorry, they would have to take their little voucher and pay some private insurer nearly twice as much as a senior pays for basic government coverage today. In essence, Republicans would break up the population between an I’ve Got Mine segment and The Left Behinds.”

And Mr. Egan doesn’t even mention the fact that while Medicare cuts would be postponed, Medicaid — government aid for poor Americans — would face savage cuts right away. And while much of Medicaid’s spending is on nursing care, many of its beneficiaries are children. In fact, as Timothy F. Geithner, the secretary of the Treasury, pointed out recently, at this point 40 percent of children born in America are on Medicaid. So the actual content of the Ryan plan is pro-geezer, anti-child. Because nothing serves the nation’s future more than making sure future citizens lack adequate health care and nutrition.

Truthout has licensed this content. It may not be reproduced by any other source and is not covered by our Creative Commons license.

Paul Krugman joined The New York Times in 1999 as a columnist on the Op-Ed page and continues as a professor of economics and international affairs at Princeton University. He was awarded the Nobel in economic science in 2008.

Mr Krugman is the author or editor of 20 books and more than 200 papers in professional journals and edited volumes, including "The Return of Depression Economics" (2008) and "The Conscience of a Liberal" (2007). Copyright 2011 The New York Times.


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