November 10, 2010

"OK, let’s say goodbye to the deficit commission," says Paul Krugman.

"If you’re sincerely worried about the US fiscal future — and there’s good reason to be — you don’t propose a plan that involves large cuts in income taxes. Even if those cuts are offset by supposed elimination of tax breaks elsewhere, balancing the budget is hard enough without giving out a lot of goodies — goodies that fairly obviously, even without having the details, would go largely to the very affluent."

49 comments:

NotYourTypicalNewYorker said...

This propaganda commission will point to a thousand reasons why taxes absolutely, positively must go higher.

Cutting spending? They will propose the most draconian cuts imaginable all in a ploy to have the people clamber for a tax increase.

This pathetic gambit has been played out over and over again in my lifetime many times to a rousing success.

This time we will see exactly how dry the well really is....

Big Mike said...

Can I suggest a 100% tax surcharge on anyone who writes for the New York Times or Washington Post or reads the news on TV and who suggests that we as a nation are undertaxed?

Bob Ellison said...

Krugman has Nobel clout, but most people have not studied economics at all and are unaware that macroeconomics is about as scientifically rigorous as palm-reading. Where are interest rates headed? What was your prediction on the housing bubble c. 1999? What will China's economy look like in ten years? If you won't answer these questions, get off the stage.

SteveR said...

Krugman is never happy.

TRO said...

"Krugman has Nobel clout"

Granted the Peace Prize is nothing but subjective, but after Barry and Al won it I don't put much stock in anyone not in the HARD sciences who wins a Nobel. And economics is anything but a hard science . . . at least as far as the left views it . . .

BJM said...

I read that as Krugman has noble snout.

Sixty Grit said...
This comment has been removed by the author.
holdfast said...

If you’re sincerely worried about the US fiscal future — and there’s good reason to be — you don’t propose a plan that involves 5% cut to the Department of Education. You cut the Department of Education.

You threaten to fire every second government worker unless everyone earning less than $100k/yr takes a 10% pay cut, and everyone earning over takes a 20% pay cut.

John Lynch said...

What happened to the Great Unraveling?

Krugman used to be very upset by deficits. I wonder what happened?

Ken said...

It's such crap to say that not taking more from people is somehow "giving out a lot of goodies". People earn their money. Not taking in the form of taxes is NOT giving them anything.

Geoff Matthews said...

Tax breaks go to the wealthy already. Simplifying the tax code involves the removal of tax breaks.

I am sympathetic to Krugman's point here. I'd like to see the deficit reduced before taxes are cut.

AllenS said...

Krugman, Journolist member. Don't listen to him, he's just making shit up.

Expat(ish) said...

I love how he knows the answer without reading the details.

Hey, worked for the global warming guys.

_XC

mccullough said...

Krugman is not a serious thinker. He doesn't give any analysis of effect the elimination of deductions and exemptions would have on the deficits. 28% of individual filers itemize deductions ont their tax returns. Getting rid of these deductions might more than offset any lowering of tax rates. Maybe it won't. I haven't seen the projections. And neither has Krugman. He's just a knee-jerk commenter.

As far as Social Security goes, he gives no analysis there either. He's not the Oracle at Delphi.

Bob Ellison said...

@Geoff Matthews, I agree in principle: we should reduce the deficit, and the wealthy should be part of that. But the Bush tax cuts were skewed largely toward the poor and lower-middle class. The cap-gains and dividend cuts helped the truly rich (way above $250k/year) a lot, and the people who really got screwed were folks whom most Americans would consider kinda rich: those with W2 incomes >80k or so, without big investment portfolios.

Anyway, the overall effect was to skew the tax burden more toward the wealthy. That's what happened, and if we reset on 1/1/2011, the poor and the middle class are gonna take it in the kneecaps.

edutcher said...

The sad part is that morons like Krugman actually believe the class warfare nonsense even while they kill themselves to have accountants who will protect them from the taxes on the affluent, because they are the super-affluent.

rhhardin said...

Rich guys is where the capital is.

Krugman wants to convert capital into government spending.

The actual deal is that if you let rich guys keep more money, they don't spend more money, but rather invest more money, both the money you let them keep and additional money they're willing to invest in productive things because of the prospect of keeping the returns.

Government misdirects money, in the sense that every penny the government spends lowers the standard of living of the nation.

The rich guys manage to raise the standard of living of the nation with the money they spend.

Politics is more interesting to Krugman than economics; or maybe he never actually understood economics after all.

David said...

Try to imagine New York Times columnists running a country.

Any country.

Maguro said...

Try to imagine New York Times columnists running a country.

Any country
.

I'm imagining Zimbabwe. Is that it?

John Lynch said...

Belgium?

Meade said...

"Try to imagine New York Times columnists running a country."

Maureen Dowd showed the good sense of delegating her column to her brother Kevin today. If she keeps it up, she might not be bad at running the country.

MadisonMan said...

How is not taking money from citizens "giving out goodies"?

That was my reaction as well. I suppose what he really meant was changing the status quo. You would think a writer for the New York Times! could write clearly.

c3 said...

Hmmm, and Gingrich railed against it on Van Susterin tonite. Either these guys have hit the right balance of pain or they're utterly incompetent.

And I am so tired of the idea that because "so + so" has done this he's therefore fully credible when he gives a partisan opinion, as in:
-Krugman Nobel winning Economist and liberal-pundit
- John Dean, Nixon White House official and sometime liberal commentator
-Ron Reagan, Jr, son of Reagan....

And yes there are many examples on the Right.

rcocean said...

I'm shocked to agree with Krugmen. We had a top tax rate of 80-90 percent from 1933-1981 and our economy grew like gang busters. Even in the Reagan years the top rate was 50%. So now we need to CUT the top rate. 39% is too high, and we need to cut SS.

Crazy, unless you're rich.

The Republicans had better stop fooling with SS, unless they want 4 more years of Obama.

rcocean said...

Anyone who uses the phrase "Class Warfare" and makes less than $200,000/year is a moron.

chuck b. said...

Maureen Dowd's brother wrote, "I once had a Jesuit English teacher who asked for an example of irony. A classmate raised his hand and wondered if Othello mistakenly killing Desdemona qualified."

Ahem, no spoiler alert?!

Bruce Hayden said...

Krugman lost all credibility when he took $50,000 to flog for Enron. He showed that he was a prostitute at heart.

But, he is also arguably the architect (or at least a co-architect) of the Keynesian wet dream known as the "stimulus" bill, where hundreds of billions of dollars were handed out in various ill advised schemes, much to political constituents of the Democrats in Washington, D.C., for the express purpose of stimulating the economy, and with the promise that it would keep unemployment under 8%. Well, we know how that worked out. But, never fear, Krugman thinks that the only problem was that not enough money was squandered. If only, much more money had been flushed down the toilet, it would have worked.

The basic problem is that over the last couple of years, the federal government's portion of GDP has risen from maybe 21% to about 25%. And that means that our problem is not that we aren't spending enough, or taxing enough, but rather, that we are spending much too much.

Jenner said...

I just barely glanced at the proposals for tax rates, but from what I can tell mine would go up under this plan (with the flat rate and the elimination of all deductions). I'm probably missing something since the Dems hate it so much.

garage mahal said...

Krugman lost all credibility when he took $50,000 to flog for Enron. He showed that he was a prostitute at heart.

He was paid $37,500 to serve on an advisory panel, before he even worked at the Times. He disclosed his affiliation multiple times, in fact, was the only person on the panel that voluntarily disclosed.

Freeman Hunt said...

I came here to type what rhhardin already did.

Gabriel Hanna said...

@Sixty Grit:

How is not taking money from citizens "giving out goodies"?

Because your labor, and the fruits thereof, belong of right to the People's State, that's why.

jr565 said...

Lets give a tax hike to people who don't pay taxes. Not a big tax hike, say 5% of their salary. We keep hearing about how more money is going into the hands of less and less people who are getting richer, while the poor are getting poorer. That would suggest that expecting to get a lot of money from fewer people will not give you the needed revenue to fund your programs even if you jacked up their taxes. So look at the bigger piece of the pie, the ones using the services.
Would democrats ever be down for those tax hikes? How about all the people demanding that the rich pay more taxes?

Maguro said...

He was paid $37,500 to serve on an advisory panel, before he even worked at the Times. He disclosed his affiliation multiple times, in fact, was the only person on the panel that voluntarily disclosed.

Disclosed to who? Not his readers. His hysterical NYT op-ed columns comparing Enron to 9/11 and blaming the whole thing on Bush neglected to mention that he himself was a former Enron consultant.

Read this and tell me where he discloses his own role in the Enron fiasco.

The Crack Emcee said...

I thought one was to never write the name Paul Krugman without preceding it with the words "Enron Advisor". Did that change?

The man's an ass.

The Crack Emcee said...

I dare you to read this and tell me this "man" is worthy of listening to.

Which raises a question:

Ann, did you put him here just to wind us up, or do you seriously think he's got credibility?

Bill said...

rcocean: "We had a top tax rate of 80-90 percent from 1933-1981 and our economy grew like gang busters."

I give up. Was this a joke?

Lance said...

@Geoff Mathews
I am sympathetic to Krugman's point here. I'd like to see the deficit reduced before taxes are cut.

I think you're misreading Krugman. He opposes tax cuts not because he wants to reduce the deficit, but because he wants to spend more than Pres. Obama already has.

The Grand Inquisitor said...

They planned to increase taxes...

so anyone who asks for taxation levels to remain where they are is accused of wanting "huge cuts".

Pathetic sophistry.

Spending has skyrocketed, and the business environment is terrible. And yet the solution is to increase taxes (or according to dems, let the tax cuts expire, which obviously would increase the taxation level in a way Krugman calls "huge").

Cutting spending? Preposterous! Why... you must not like police! etc etc

They are just staking out a negotiating position. Everyone knows taxes can't be increased and spending must be cut.

DaveW said...

"The Republicans had better stop fooling with SS, unless they want 4 more years of Obama."

Sorry, demagoguing medicare and social security isn't going to work for you guys anymore, not after democrats deliberately and unilaterally slashed medicare by $500 billion. The party that wants to take money away from old folks so they have more money to give to their cronies and union supporters is the democratic party.

And believe me, old folks noticed.

Sixty Grit said...
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Big Mike said...

There are two patterns here that are starting to not work for the Dumbocrats anymore.

(1) Throwing money at the problem. For instance throwing $800B at unemployment. When that doesn't work, the claim is inevitably that we just didn't throw enough money at it and now we have to throw more.

(2) Add marginally useful programs when times are good (e.g., the middle six years of the Bush administration) and then threaten to cut programs that everyone needs when times get tough. At the local level this includes midnight basketball leagues when times are good, followed by cuts (or threatened cuts) to police and fire and libraries when times are tough. At the national level this includes the Dumbocrats proposing to cut back on Social Security now that the crunch time is here. (BTW, does anyone besides me remember that Nancy Pelosi was saying back in 2004 that there was no need to address Social Security's problems because the Trust Fund was in great shape until 2017? I guess 2017 came seven years sooner than expected.)

Scott M said...

Everyone I talk to, regardless of political stripe, from blue collar to PHD, says basically the same thing up front...Why not START with a 5% across-the-board cut in spending? Every department, every agency, every everything. Personally, as I've said before, I've never been part of an organization, military or civilian, that couldn't find 5% fat to cut.

garage mahal said...

Disclosed to who? Not his readers

Sure it was. He disclosed it in a Fortune article he wrote on Enron, and disclosed it the first time he wrote on Enron at the Times.

Marshal said...

Shorter Krugman: Everyone who supports anything I don't is an idiot, unserious, and in thrall to the rich (not me - the other rich).

Original Mike said...

My money is mine, not his.

Not if he can get the state to take it away from you, it isn't.

Marshal said...

"balancing the budget is hard enough without giving out a lot of goodies "

So he's against ObamaCare now?

Joe said...

I was relatively impressed with the deficit commission.

One reason to get rid of deduction and tax credits is that it will reduce fraud and corruption.

rcocean said...

Bill @ 1:45AM I give up. Was this a joke?

Why? Do you think historical USA GDP statistics are a joke?

Methadras said...

Krugman is about as credible to economics as, well... As Obama is to economics.