Free Markets, Free People

People’s Budget

Democrats, after a year’s hiatus, finally come up with a budget

Funny what actually producing something – a budget plan to bring government deficits and eventually debt under control — will see the other side produce.  After a year in which the Democratic Congress was unable to produce a budget, suddenly the Progressive Caucus in Congress has an answer to the Ryan budget proposal produced by Rep. Paul Ryan (R-WI).

And, as you might imagine, it is, definitely snort worthy.  However, if you remember what group I said had produced it, it shouldn’t surprise you. Phillip Klein brings you the “good news”:

Next week, the group of progressives plans to introduce its alternative to Ryan’s proposal, called "The People’s Budget." Based on an advanced peek provided by a senior Democratic aide, it promises to return the nation to surpluses by the end of the decade and reduce the debt, only with a much different approach from Ryan’s.

To extend the long-term solvency of Social Security, it would propose dramatically increasing payroll taxes on both the employer and employee side, and funneling the money into even more generous benefits.

Payroll taxes are economically destructive, because they make it more expensive for employers to hire new workers, meaning lower real wages and higher unemployment.

Yet the tax increases wouldn’t end there. The People’s Budget would rescind last year’s tax deal to raise rates on higher income levels, boost taxes on capital gains and dividends, increase the estate tax, institute three "millionaire tax rates," with the highest reaching 47 percent, tax corporate foreign income, impose a "financial crisis responsibility fee," and institute a "financial speculation tax."

Overall, taxes would rise to 22.3 percent of the economy, compared with 18.3 percent under the Ryan proposal.

The plan would also build on Obama’s most notable initiatives. It includes an additional $1.45 trillion in economic stimulus spending. On health care, the plan would add a government-run plan, or "public option," to Obamacare and have the government negotiate drug prices.

Yet while other parts of government would grow, the defense budget would be gutted. The proposal would "reduce baseline defense spending by reducing strategic capabilities, conventional forces, procurement, and R&D programs."

File this under “they just don’t get it”, for starters.  And, if you didn’t get a horse laugh out of the “People’s Budget” (VolksBudget?) then your sense of black humor is a bit lacking.  These fools, and I haven’t a better word for them, would absolutely ruin the country if given an opportunity.  They’re ignorant of economic, ignorant of reality and just flat dangerous.  If nothing else, the GOP ought to make this available far and wide – this is what these freaks will do if they get control of Congress again.  If you think the debt and deficit are bad now, let this crew pass their “People’s Budget” and we’ll all wave goodbye to life as we know it.

However instead of waiving this off, people need to study these two contrasting approaches to government advance by Paul Ryan and the Progressive Caucus.

Oh, and Megan McArdle, doing some back of the napkin figuring, isn’t buying the “22.3%” of the economy nonsense:

A 47% federal tax rate on top incomes, plus increases on estates, capital gains, and dividends, and all you get is . . . 22.3% of GDP?  A bare 1.3% above the collections envisioned by Simpson-Bowles?

And she asks for a little honesty:

No, if you want to get the budget under control without meaningfully cutting into entitlements, you’re going to need to hike taxes substantially on the middle class.  I’m waiting for the first politician to say this out loud.

Well, it won’t be the Progressive Caucus, you can count on that.  Instead, they’re all for making entitlements even more generous.  National defense – we don’t need no stinkin’ tanks.

Meanwhile the left has been savaging Ryan’s proposal (and so far the “People’s Budget” is the best they can throw back).  But serious people, like Charles Blahaus of e21 find it pretty refreshing (read the whole thing).  And he makes a point or two I’ve been making recently:

Yesterday’s release of the draft Ryan budget offers a vision for repairing the federal budget. Thus far, this vision for fiscal repair remains the only serious legislative alternative to fiscal catastrophe. President Obama’s submitted budget, by contrast, contains no significant effort to repair the federal fiscal outlook. The Congressional Budget Office (CBO) has shown that it would leave federal finances on a clearly unsustainable trajectory. Health care reform, long touted by some as being the real key to fiscal reform, turned out to mean expanding federally-subsidized coverage rather than fiscal correction. Last year the Congressional Democratic leadership declined even to pass a budget at all. If there is a responsible left-of-center alternative to the Ryan proposal, we have yet to learn what it is.

Well sir, it won’t be the People’s Budget for the People’s Republic of Fantasy Land, I’m sure of that.

~McQ

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