Monday, December 29, 2014

Ah, Dynamic Scoring and the Magic of Trickle Down Economics about to transform the Country....

From Common Dreams, I thought this description of trickle down economics by Robert Reich said it all. I've also included the video admission by Alan Greenspan that deregulation and trickle down was a failure, for those still not convinced. Tax cuts and deregulation are conservative concepts that go hand-in-hand. Our incoming Republican majority will be doubling down on their past failures. They're going to make this work if it kills us:  

Reich: According to reports, one of the first acts of the Republican congress will be to fire Doug Elmendorf, current director of the non-partisan Congressional Budget Office, because he won’t use “dynamic scoring” for his economic projections. Dynamic scoring is the magical-mystery math Republicans have been pushing since they came up with supply-side “trickle-down” economics.

It’s based on the belief that cutting taxes unleashes economic growth and thereby produces additional government revenue. Supposedly the added revenue more than makes up for what’s lost when Congress hands out the tax cuts. Dynamic scoring would make it easier to enact tax cuts for the wealthy and corporations, because the tax cuts wouldn’t look as if they increased the budget deficit.

Incoming House Ways and Means Chairman Paul Ryan (R-Wis.) calls it “reality-based scoring,” but it’s actually magical scoring – which is why Elmendorf, as well as all previous CBO directors have rejected it.

Few economic theories have been as thoroughly tested in the real world as supply-side economics, and so notoriously failed: Ronald Reagan cut the top income tax rate from 70 percent to 28 percent and ended up nearly doubling the national debt. His first budget director, David Stockman, later confessed he dealt with embarrassing questions about future deficits with “magic asterisks” in the budgets submitted to Congress. The Congressional Budget Office didn’t buy them. George W. Bush inherited a budget surplus from Bill Clinton but then slashed taxes, mostly on the rich. The CBO found that the Bush tax cuts reduced revenues by $3 trillion.

Yet Republicans don’t want to admit supply-side economics is hokum. The CBO has continued to be a truth-telling thorn in the Republican’s side.

The budget plan Paul Ryan came up with in 2012 slashed Medicaid, cut taxes on the rich and on corporations, and replaced Medicare with a less well-funded voucher plan. Ryan claimed these measures would reduce the deficit. The Congressional Budget Office disagreed. His 2013 and 2014 budget proposals were similarly filled with magic asterisks. The CBO still wasn’t impressed. Now that Elmendorf is on the way out, presumably to be replaced by someone willing to tell Ryan and other Republicans what they’d like to hear, the way has been cleared for all the magic they can muster. Or have your benefactors finance “think tanks” filled with hired guns who will tell the public what you and your patrons want them to say. 

1 comment:

nonquixote said...

"They're going to make this work TO kill us:"

Fixed that for you. I just read the more recent topic you posted. Here we see no food, no housing, no affordable health care, instead of tank piercing bullets. The mindset is the same.

Thanks for your work here John and hopes for a happier new year than we might rightfully predict.