Conservative Economists Criticize ‘Off The Deep End’ Republican Budget

Now that Republicans and Democrats have supposedly figured out how to fund the government through September, Congress’ attention will turn to other issues, including the GOP’s 10 year vision for the country: Paul Ryan’s budget proposal, which includes Medicare privatization, severe cuts to Medicaid, and further tax breaks for the wealthy.

While the government teetered on the brink of a shutdown last week over short term funding, economists across the ideological spectrum weighed in on the GOP’s long-term plan with negative reviews. The biggest shock came from high-profile economists with GOP leanings, who also criticized it on the merits.

“It doesn’t address in any serious or courageous way the issue of the near and medium-term deficit,” David Stockman told me in a Thursday phone interview. “I think the biggest problem is revenues. It is simply unrealistic to say that raising revenue isn’t part of the solution. It’s a measure of how far off the deep end Republicans have gone with this religious catechism about taxes.”Stockman, who directed Ronald Reagan’s Office of Management and Budget, approves of Ryan’s entitlement proposals, but breaks faith over taxes and the GOP’s unwillingness to slash defense spending. And he laughs off the notion that the plan will do anything about unemployment, let alone dramatically reduce it, which Ryan and his plan claim it will. “This isn’t 1980. It’s not morning again in America. it’s late afternoon, or possibly even sunset.”

On this score, Doug Holtz-Eakin — a former McCain and George W. Bush economic adviser — told Huffington Post Ryan’s plan is “implausibly optimistic.”

The libertarian economist Tyler Cowen wrote up a point-by-point critique of the plan. His principle objections are that the plan doesn’t do anything to control health care costs, and cutting Medicaid is neither good policy, nor urgent. Indeed, he notes, “Medicaid should be one of the last parts of the health care budget to cut.” Emphasis in the original.

However, Cowen also argues that, by proposing $6 trillion in spending cuts, the main impact of the GOP plan will be to shift the center of the fiscal debate in Washington dramatically to the right. This is already happening.

The question will probably come down to whether lawmakers and the Obama administration have the stomach for a public fight over how to cut popular entitlement programs with unemployment high, and old voters on guard against any major benefits changes.

“It’s kind of a pitiful commentary on our state of fiscal malgovernance when you consider the two leaders that we have that are trying to face down this issue,” Stockman said. “One of them is so ready to compromise that he folds faster than a lawnchair (that’s Obama). And the other is ready to sob at the drop of a hat.”

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