Brad DeLong takes a look at President Obama’s proposed budget cuts and those proposed by Republicans ( who have a majority in the House). he does not like either plan. The benefit of the Obama cuts are they add up, even if draconian in some respects. The cuts by conservatives will end up costing money. Only Republican math, combined with a singular lack appreciation for the complexity of our economy, could cuts end up costing money, Washington’s deficit-hawk pretenders
Suppose the Republican plan actually does cut spending by $800 billion. The House Republicans then want to take that $800 billion, and spend $200 billion of it trying to repeal health care reform. They then want to take what’s left, and use it to pay for extending the Bush marginal tax rate reductions on high-earning Americans. But it will not stretch quite that far. Extending those Bush tax cuts is projected to cost $750 billion, and there is only $600 billion left in this hypothetical scenario. There’s a $150 billion shortfall.
The Obama proposal looks to reduce debt 10 years from now, by $400 million. This theoretical House Republican proposal looks to increase the debt 10 years from now, by $150 billion.
And over the past 30 years, Democratic budget proposals have by and large delivered what they promised. Republican proposals, by contrast, have all turned out to produce much bigger deficits than were pledged at the start.
If you are a real deficit hawk, there is simply no contest as to which political party you should support right now.
But there are a lots of people in Washington who are paid in either dollars or favor points to pretend to be deficit hawks when they are no such thing.
The Affordable Care Act or ObamaCare if you like, is a huge wind fall for health care corporations and the pharmaceutical industry – Healthcare industry stocks explode as bill progresses. I have not heard much from either. The health corporations and insurance companies can expect 30 million or more new customers in the next four years. A large percentage of those people will no doubt be also getting medication of some sort. So here are conservatives, who still get a little more of donations of health care related business than Democrats, are ready to spend $200 billion tax dollars to repeal an economic boom for health care incorporated. It is difficult to convince conservatives and right-wing libertarians of it, but economics does have a moral component. So it is little wonder that the Right side of the political spectrum could care less about the continuation of growing income inequality. So morality aside one would think the Right would give the matter of the U.S. turning into Pottersville some consideration in the way of long-term benefits to business and the wealthy. Health care cost are the leading cause of personal bankruptcy. Those who may not succumb to bankruptcy have to deal with insurance costs that are one of the fasting rising components of the economy. In either case, lack of reform, leaves business with fewer customers and less income from consumers. Currently corporate profits are as high as they were before the recession. Even GM made a profit the last quarter. Are Cons and Wall St so sure they can continue to reap so large profits with a small middle-class, a super wealthy 1% of the population and the vast majority of Americans struggling to provide a basic standard of living. Republicans seem willing to bet around $800 billion dollars that Pottersville is the new American dream.