Details -- important stuff like, say, figures and projections -- would come out the next week, we were told. And yesterday, on April Fools Day, they did.
It turns out that many of those figures and projections are best described as "made up." The author of this document, Wisconsin's own Rep. Paul Ryan, took a shot at explaining why the economy's going down the tubes. The problem was that his explanation, laid out in the pages of the Wall Street Journal, didn't make any sense at all.
Instead of doubling the debt in five years, and tripling it in 10, the Republican budget curbs the explosion in spending called for by the president and his party. Our plan halts the borrow-and-spend philosophy that brought about today's economic problems, and puts a stop to heaping ever-growing debt on future generations -- and it does so by controlling spending, not by raising taxes. The greatest difference lies in the size of government our budgets achieve over time.
A housing bubble? Credit default swaps? Toxic assets and a lack of common sense regulation of the financial sector? Pfffft! Liberal claptrap. What caused the economic downturn was the fact that the federal government is spending too much money.
This is not the best way to impress people with your grasp of basic economic principles.
Of course, the thing to do here is to spend less money. That this is the exact opposite of what Obama proposes is just a big coincidence. Barack Obama just happens to be 100% wrong. It's unfortunate, but there ya go. That few economists -- or anyone who's been paying attention for the past six months -- think that government spending is causing this recession is beside the point. They too are 100% wrong.
And Ryan provides a nifty chart to prove it.
The spending proposed by the president goes right up off the charts -- you kind of have to assume it goes on forever. Give the Republicans some credit for not projecting their numbers as the mirror opposite of Obama's -- when you're making stuff up, that'd be your impulse.
The GOP includes a similar graph in their budget report [PDF]. You'll notice that it extends to 2080 and cites the CBO (Congressional Budget Office) as the source for these figures. Turns out there are quite a few problems with this. According to journalist Marc Ambinder, the CBO "has never done a projection of the Obama budget through 2080, so that sourcing can't be right."
Not surprisingly, the farther you project into the future, the more likely you are to be wrong. This is kind of like offering a weather forecast for April 1, 2080 -- it's probably not going to be extremely accurate. Which explains why the CBO doesn't project out that far.
At least, not in concrete terms. Ambinder found that Ryan got these figures from a CBO letter sent to him called The Long-Term Economic Effects of Some Alternative Budget Policies, "which contained budget estimates based on the CBO's December 2007 Long-Term Budget Outlook."
But there are three problems with using this as a source. The first is that the CBO's 70 year projections are, as one CBO official told me a moment ago, "advisory is nature": "We have a lot of uncertainty in our ten-year projections, so there's obviously much more in our 70-year projections."
Second, both the 2007 Budget outlook and the 2008 letter to Ryan are based on the Bush budget, not the Obama budget. (For the ineluctable, historical reason that they were written in 2007 and 2008.)
Third, both budget documents were written by Obama's budget director, Peter Orszag, when he was head of the CBO. (I'm going to guess he knows about the long-term budget risks that he identified last year.)
Ryan is using Bush budgets to project Obama's spending. There's a fourth problem here that Ambinder doesn't mention; this budget is Bushian in nature (although the Republican's report doesn't mention him once). According to that report, the alternative GOP budget "permanently extends the 2001/2003 tax relief provisions and the alternative minimum tax 'patch.'"
The problem here is that during Bush's first term, job growth was flat. Bush did gain jobs during that term, but it wasn't any better than the population growth. Bush's economic policies decreased the rate of unemployment by 0.3% from 2001-2005 -- according to the Wall Street Journal Bush's "job creation record compares poorly to that of almost every previous presidential term for which comparable data is available."
So let's reinstitute a cornerstone of Bush's first term economic policies, because that worked out so well. Unemployment is high now, but -- if the GOP have their way -- it'll be 0.3% better by 2012. Yay! It's not like there's any rush or anything.
Other fun ideas include privatizing Medicare and a reduction in capital gains taxes. According to Ben Furnas with the Center for American Progress, "This temporary reduction in the capital gains tax rate is particularly pernicious as it would likely have exactly the opposite effect Ryan claims it would have. Ryan says it would 'create an incentive for risk-taking and investment.' Actually, it would do just the opposite: encourage wealthy people to cash out of their holdings, discouraging new long-term investing (right at a time when we need it most) but providing a sweet windfall for the wealthy investor class." Furnas describes the proposed budget as "$1.5 million tax windfall For CEOs."
All in all, the House Republican's budget alternative is just a collection of old bad ideas, dressed up in fictional numbers and flavored with BS. In fact, "alternative" isn't even a decent word for it, unless you define it as "Hey, let's go back to doing what we've been doing for the past eight years." It's mostly a "stay the course" budget -- offered at a time when the course has sailed us straight off the edge of the world.
Get updates via Twitter