More thoughts on Paul Ryan...

Nobel Prize winner and self-proclaimed liberal economist Paul Krugman wrote an article recently that was very critical of Paul Ryan's "Road Map" plan for economic recovery. He titled it "Flimflam Man" and tried to make all of what Ryan proposes seem like so much smoke and mirror effect.

What I found most telling in Mr. Krugman's article was the fact that he derides Ryan for referring to the deficits as "apocalyptic" in scope, and because the Tax Policy Center could show no greater reduction in the deficit than if the status quo remained in place, then deficits must not be a "bad thing" because we have had them for so much of our history.

I'm not an economist, and I am forced to trust Mr Krugman and the Tax Policy Center when it comes to crunching Ryan's estimates on what his tax cuts and spending reductions will mean in future revenue estimates... but I will say this: History has shown us that we DO NOT need a deficit to have a vibrant and growing economy, and when we do have a large deficit, we DO NOT have as vibrant or as rapidly-growing an economy as we otherwise would. I give you, as my proof, the post-1994 economic boom AND the elimination of our Federal deficit under the Pay As You Go Act.

No substantial, broad or general cuts in spending, no hack-and-slash eliminations of jobs or programs from the Fed, and no substantial increase in income taxes... just common sense legislation that requires new spending to be provided for within the legislation itself. If you want to expand the military budget, then the budget proposal must have the means to generate the money within its bill when it is signed into law. Easy. Fourth-grade stuff, really...

Furthermore, Mr. Krugman moves on the assumption that no real increase in revenue will result from tax cuts that directly benefit Americans that do the most hiring in this country... those making more than $250,000 a year. If I went from making my current $45k/year and my 27% tax margin, and moved into the $250k/year at the same 27% margin, I would spend MUCH more money than I do now... not simply proportionately more money. I'd buy a new house, or at least invest it in improvements to the one I have now, and that means putting as many as 20 to 30 people TO WORK for upwards of 6 months. I'd be putting money into the pockets of people that make tools, material and furniture for my new/improved home. I'd buy better cars. I'd buy better electronics or appliances. I'd improve the value of my new/improved home and that of my neighborhood in general.

Under Obama's (and presumably Krugman's) plans, were I to make $250k/year now, and face the prospect of paying more than 38% of that in taxes (possibly as high as 51%)... then I won't spend the money... I'll try and save it. I'll hide it from the Feds in interest-bearing accounts that shelter me from taxes and do ZERO good for the economy's short-term future. The more I spend in Obama's world, the more I am taxed... so the incentive to spend is removed, and so is the stimulus of my money moving the economic engine of America.

Gotta run... more later.