In addition to Michele Bachmann who says "All we should do is issue subpeonas", and John Beohner who want's to completely hamstring the Federal Government's ability to do it's job if Republicans regain the House - Senator John (Reverse Robin Hood) Barraso who wants to repeal the Middle Class Tax Cuts to finance the Cuts for the Rich - it seems the Budget Wunderkind Paul Ryan does have a plan - and he's laid it all over for us right here as brought to you by the guys who've gotten everything they've ever done so spot on - (what with their predicting of the location of the WMD's and all) - The American Enterprise Institute.
Reading through this is a lot like a trip through Grim's Fairy Tales, with all the original gory endings in tact - it's just one Myth followed by another, followed by another...
The first myth is that the primary problem we face as a nation have nothing to do with policies enacted - by Republicans.
I have great respect for President Obama, who surely believes his Progressivist agenda is best for the American people. But America’s well-being rests on America’s timeless truths, and can’t be secured by abandoning our principles. This “new foundation” rests on ideas like the following:
•Bureaucratic control over private enterprises’ investment decisions;
•Enormous government spending;
•Forcing worker training into sectors favored by government rather than empowering individual workers to choose their training and pursue their own destiny;
•Imposing upon the economy government’s radical energy and environmental overreach;
•Seizing control and management of the health care sector.
These ideas, in my judgment, reflect not the foundations of America, but of a European-style social welfare state.
This view, as usual, ignores the long, long history of Republican President's since Reagan who have consistently increased government spending (Every budget that the 80's Democratic Congress delivered spent LESS than every budget that Reagan asked for) and ratcheted up the power of Government intrusion in the private lives of individuals (Patriot Act, Warrantless Wiretaps) - it also ignores that there was NO Public Option in the Final Health Care Bill (So exactly where is the "Government Takeover"?) and that moving toward green energy and better environmental caretaking isn't just a Whim it's a abslutely neccesity for the survival of our economy, and in many ways - our way of life as fossil fuels continue to dimish and pollute our air and waterways.
China is investing $Bilions in clean and green energy, in a Market based world, we either keep up or we fall behind.
But then that's pretty much boiler-plate stuff, the really weird stuff comes soon after. Herein Ryan explains the second Myth, that all our recent financial problems aren't the result of naked bare-knuckled greed - it's all because "Government Backed Entities" Fannie Mae and Freddie Mac.
For one thing, whatever greed drove investors to trade in Mortgage-Backed Securities and similar financial instruments – for greed always plays its part – those “securitization” investments were evolved, packaged, and sold by so-called “Government-Sponsored Enterprises,” principally Fannie Mae and Freddie Mac. The GSEs were heavily regulated by HUD and other agencies, and they were under close Congressional oversight. Congress itself compelled Fannie and Freddie to provide a secondary mortgage market for uncreditworthy buyers. This meant they would eventually have to cover subprime mortgages under quotas targeted by HUD...and they would have to find a way to resell these risky mortgages to investors.
There's one big huge flaw in this revisionist theory - since Fannie and Freedie were heavily regulated by HUD they couldn't issue subprime mortgages.
My only quibble with the gusher of stories this morning on the government’s takeover on Fannie Mae and Freddie Mac is my usual one—ahistoricism.
Reading all this, one gets the impression that those politically protected mortgage buyers and fee machines caused the global credit crisis.
The fact is: Wall Street sank Freddie and Fannie, not the other way around.
This Credit Suisse report (from March 2007 and eerily prescient) reminds us that the government sponsored entities’ share of the overall new mortgage market had fallen to 42 percent by the end of 2006 before shooting up to 76 percent at the end of 2007 (on their way toward 90 percent now) as the market collapsed.
And that’s the overall market. As Paul Krugman points out, a "subprime borrower is basically someone whose credit wasn’t good enough to qualify for a Fannie- or Freddie-backed mortgage". The subprime market&the really toxic stuff—was always dominated by Wall Street and Wall Street-backed lenders.
In fact - GSE like Fannie and Freddie were not only blocked by HUD regulations from giving Mortgages to people who couldn't afford them, were prohibited from doing so by law - Cue Paul Krugman.
Furthermore, while Fannie and Freddie are problematic institutions, they aren’t responsible for the mess we’re in.
But here’s the thing: Fannie and Freddie had nothing to do with the explosion of high-risk lending a few years ago, an explosion that dwarfed the S.& L. fiasco. In fact, Fannie and Freddie, after growing rapidly in the 1990s, largely faded from the scene during the height of the housing bubble.
Partly that’s because regulators, responding to accounting scandals at the companies, placed temporary restraints on both Fannie and Freddie that curtailed their lending just as housing prices were really taking off. Also, they didn’t do any subprime lending, because they can’t: the definition of a subprime loan is precisely a loan that doesn’t meet the requirement, imposed by law, that Fannie and Freddie buy only mortgages issued to borrowers who made substantial down payments and carefully documented their income.
So you see (in Ryan's Fantasy Republican-World) it wasn't the preditory lending practices and dark pool derivatives of corporate entities like Lehman or Goldman or AIG or anyone on Wall Street that caused the Great Recession. The Market didn't FAIL, just because - the MARKET FAILED - it's was because the Big Bad Evil Gubner-ment made them fail, by enticing them with goodies and cookies of rich creamy poor people with no money? Got it?
Yeah, that's a good fairy tale. But wait it's gets even better - enter the Villians of the Story, the Big, Bad, Dirty, Evil - Progressivists!
The Progressivist tale is wrong because it misstates the very nature of free enterprise. It presumes that free enterprise is materialistic and selfish. The free market is a game of chance. Success or failure depends on the luck of the draw, and the edge goes to the ruthless. The system of free enterprise is unfair. The moral is this: government must step in to redistribute the wealth and equalize the results for all.
We have met Skeletor, and he is us.
Let's be clear - this is the bogeyman construction in full bloom. This is the Myth of the Capitalism Hater, and yet again igores the True Progressive position and view which clearly does support Capitalism, but not without limits and reasonable rules of the Road. No Market can funtion as a Free For All without ground rules designed to protect all the participants from the FEW - repeat: The FEW - who might attempt to gain unfair financial advantage like say - Enron, or Global Crossing, or Adelphia, or AIG, or Goldman.
Caveat Sucktor - Let the Sucker Beware.
No, the progressive view is admit the reality that some individuals within a company and some companies as matter of policy are Irresponsible, and that the larger that company may because the more damage it's irresponsible behavior may create. It doesn't presume that all companies are inherently evil, only that it's neccesary to makesure all the traffic signs and safe speed limits are applied - especially to the largest trucks on the economic road - because when they crash, they can take out hundreds and thousands of smaller cars on the marketing highway with them.
But to people like Ryan, the shining Hero on the Hill - is an Unrepentant Unlimited Uber-Capitalist.
But the prosperity of America finds its real source, not in government, but in democratic capitalism... people investing, working, and saving in private enterprise. Homes could not be built without private builders, creditors, and workers under the free enterprise system. It’s the source of all wealth, the satisfaction of all material needs, our means of transportation, instant global communications, access to information, it’s the only spring of progress and innovation in health care, education, and on and on.
Yeah, right and the Goverment providing education and housing loans to GI's returning from WWII, providing the funding to build the Interstate Highway System, and providing the financing and R&D to create a way for computers to share information across distances in order to avoid catastrophic data loss in the advent of Nuclear War had nothing to d with creation of the Internet - other than EVERYTHING.
Sometimes, many times, government can act to plant a seed and nuture an immature element of our culture and economy until it because mature enough to survive on it's own in the market. Some things may never become financial secure enough to function on their own (and some things can become financial successful even though they are completely socially and culturally worthless - case in point Beiber!), nonetheless they may be elements of our society without which our nation could not continue to function, survive or thrive. Elements like our ROADS! But in right-wing Republican Land, that which is not profitable, is not fit to live.
Once he finally finished with Aesop's Fables Ryan finally got to the point, and while some was quite predictable (tax the poor, but not the rich) a few of these point I found rather surprisingly Progressivist!
First there's the return of the Regressivist Flat Tax.
Here are the major components:
•First of all: We cannot rest satisfied with permanently high unemployment. America must begin to create new businesses and jobs. We can begin with a pro-growth tax reform. The Roadmap proposes a simple two-tier low-rate personal income tax system: 10% on the first $100,000 of income for couples ($50,000 for singles) and 25% above that. It abolishes the Alternative Minimum Tax, and nearly all loopholes and credits, except for generous personal and family deductions. Taxpayers can either file under the current tax code or this simplified code. Our uncompetitive corporate income tax code will be replaced by a simple 8.5% business consumption tax and investments will be expensed immediately. The Roadmap creates incentives to foster job opportunities and economic growth, while sustaining the revenues to meet our priorities.
Got that, two tax rates - 10% and 25% - that's it. No Loopholes, NO Credits. This would be a massive shift of the tax burden DOWN to the middle class by eliminate homebuyer credits, interest rate credits, earned income credits which help keep many middle and low income families out of near poverty.
•Next, it is not possible to grow unless we act to reduce the mountain of debt from unfunded health care and retirement entitlements. The Roadmap was put forth during the last Administration, and reintroduced this past year – before the President signed into law his massive health care overhaul. Going forward, the Roadmap is predicated on its repeal – and offers a consumer-driven replacement.
Consumer-driven? I read that as Industry Controlled, owned and operated. No More Health Care FOR YOU. But then again...
•The Roadmap offers universal access to affordable, quality health care by reforming the cost-pushing and discriminatory distortions in our tax code. Along with transparency on price and quality and upfront support for those with pre-existing and chronic conditions, the Roadmap reform tackles the scourge of health inflation with a true patient-centered alternative.
Price Transparency and quality - you mean the thing that the Exchanges you just said you're going to Repeal will do? Then came the Whopper... Medicare for (almost) All.
•Everyone over 54 remains in the current Medicare program. For those under 55, the Roadmap plan provides future seniors with the resources they need to choose from a list of diverse Medicare-certified plans, just like the health coverage enjoyed by Members of Congress and Federal employees. The payment grows each year, with more support for those with lower-incomes and higher health costs. To meet Medicaid’s obligations, the Roadmap reform provides low income Americans with financial resources to buy their own health care coverage like everyone else.
Shiver me timbers, he just suggested lowering the Medicare minimum access age to 55. Also sounds like it supplied subsidies to help people buy plans - WHAT? With MY TAX MONEY? Nooooo!!
In point of fact, most of Ryan's plan actually mirrors the plan signed into law by President Obama, including State Based Exchanges and tax subsidies for those with lower income (although eliminating some of the subsidies for those farther above the poverty line). Better not let on, but he seems to be pretty far Down with the Socialism.
Then comes the Personalization of Social Security.
•Everyone over 54 will stay in the existing Social Security program with no change, but benefits are guaranteed. My plan offers those now under 55 a choice: continue to take part in traditional Social Security, or participate in a retirement system like the one I have as a Congressman. You can invest over a third of your payroll taxes in a guaranteed low risk account which you own, managed by the Social Security Administration, not a stock broker or private investment firm.
So this is a bit of a return to the Bush Social Security Proposal, invest part of your Social Security funds in Wall Street, only without the Stock Broker elements. Yeah, that's a great idea -- how's everyones 401k doing after 2008-2009? Wanna see 1/3rd of your Social Security go exactly the same way? Join up with this plan, it's a hum dinger.
And just for even more fun this plan has been Scored by CBO.
CBO: On Social Security
Traditional retirement benefits would be reduced below those scheduled under current law for many workers who are age 55 or younger in 2011.
The Roadmap would also eliminate the income and payroll tax exclusions for
employment-based health insurance. As a result, more earnings would become taxable for Social Security purposes, thus boosting future benefit payments, and payroll tax revenues credited to the Social Security trust funds would increase.
So basically Ryan's plan would cut benefits, invest them in the risky stock market and raise taxes at the same time - Nice.
The age of eligibility for Medicare would increase incrementally from 65 (for people born before 1956), as it is under current law, to 69 years and 6 months for people born in 2022 and later. Starting in 2021, new enrollees would no longer receive coverage through the current program but, instead, would be given a voucher with which to purchase private health insurance.
And instead of lowering the access age to Medicare as he claims, their plan would RAISE the minimum age to 69 - and them replace it for younger people with Health Stamps for people to try and buy care they won't be able to afford in the open market. Peachy.
It would also have the lovely gem, Medical Savings Accounts...
The government would provide funding for medical savings accounts (MSAs) for low-income Medicare beneficiaries. Currently, Medicaid pays out-of-pocket expenses that are not, for many low-income beneficiaries, covered by Medicare. The legislation would replace that Medicaid coverage with federal funding of MSAs for those individuals. According to specifications provided by your staff, the federal government initially would contribute $6,600 per year to the MSAs of
Private Health Care This year averages more than $7,000 - so thanks for next to nothing, since this won't cut it.
So what's this do to the budget?
The Roadmap, in the form that CBO analyzed, would result in less federal spending for Medicare and Medicaid as well as lower tax revenues than projected under CBO’s alternative fiscal scenario (see Table 1). On balance, those changes would reduce federal budget deficits and the federal debt.
Yay, he's managed to reduce the defecit on the backs of the sick and elderly. I'm sure his mother is so proud, unless she's on Medicare that is.
So what about actually reducing the cost of Medical Care for all the rest of the population? What about the Bush Era Tax Cuts that have been busting our budget for 9 years and turned what was a surplus into a deficit?
As it turns out CBO actually didn't analyze the impact of the proposal on the overall cost of Health Care as it is very difficult to predict, which means the plan lacks specific proposals in this area designed (as were proposals such as the Public Option) to actually bring the cost down.
I think this plan is a pig-in-a-poke that we've seem several times before. Social Security is fiscally sound until 2030, and by expiring the Bush Tax Cuts then trimming out some of the fat in our Military Budget for bases we no need to maintain overseas we could easily bring the deficit under control as we did in the 90's. Contrary to Ryan's claims that we "Don't want to be like Europe" this is a thinly disguised Austerity Plan that I think we would do well do pound the bloody heck out of the Republicans with this November.
They drew up a "Roadmap" so it were ablidged to run them down with it. Just remember if Republicans take control of the House, besides - shudder - John (Man From Orange World) Beohner becoming Speaker, THIS GUY gets to chair the Budget Committee.