More fun with Paul Ryan:

I have been sitting on this for a while because it did not get much press at the time. Krugman’s rebuke of Ryan, has been written about extensively. Ryan (R- Wall St), for some reason cant seem to get enough press(presidential ambitions maybe?). He also is not very good at getting criticized as we find out today. He was mildly criticized by David Brooks regarding an op-ed he wrote in the Wall Street Journal. (How he gets unlimited print space I guess is another post). Well Mr. ego cant even handle mild criticism so he fires back at David Brooks today.

What was lost in the shuffle was Dean Bakers scathing article regarding Ryan and his roadmap. Dean Baker, is an economist(full disclosure, probably the one I respect the most), author and co-director of Center for Economic and Policy Research in Washington, DC. He has been writing about the housing bubble and predicting the recession for years. He recently turned his eye towards Ryan’s roadmap and broke down

his op-ed reply to Krugman in the Washington Post. After expressing awe that Ryan would be allowed newspaper space for such twisted reality, he addresses it lie by lie. Here are some highlights:

*”This apparent improvement was the basis for Democratic celebration — even though the program remains tens of trillions of dollars in the hole.”

This one is beyond debate. The new projections show a Medicare shortfall equal to 0.3 percent of GDP over its 75 year projection period. This is equal to $2.7 trillion. And, even in Washington, $2.7 trillion is not “tens of trillions.”

*Ryan begins the fourth paragraph: “Put simply, Medicare is on course to collapse.” No, the trustees report released last week implies that it has a relatively minor shortfall. The trustees could be wrong, but if their projections prove accurate, then Medicare is actually in fine shape.

*Of course Ryan’s plan would end Medicare as we know it. It replaces a Medicare system that pays directly for health care with a voucher system. The voucher is explicitly designed not to keep pace with health care costs.

* “If we act now, we can avoid disruptions for current seniors while advancing patient-centered reforms so Medicare will be strengthened for future beneficiaries. The alternative is the European-style death spiral of the welfare state: kick the can down the road as our debt explodes.”

Again, the latest projections from the Medicare actuaries imply that there is no great urgency to “act now.” The “European-style death spiral” might be useful political ad hominem, but it has no meaning. Some European countries, like Greece and Italy, do face severe budget problems, however some of the countries with the most expansive welfare states, like Denmark and Sweden, have much lower debt burdens than the United States.

*Of course to the seniors who would be unable to afford decent health care if Mr. Ryan’s plan became law, his sincerity won’t make any difference.

I am not sure why he let Mr. Bakers criticism slide, was it because Ryan knew he was lying and did not want to “bring a rubber band to a gun fight” in trying to take on Baker, or because Baker is a non partisan economist and he cant be dismissed out of hand as being liberal. Either way does not speak well for the Wall St. Golden Boy with the nice hair.


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9 thoughts on “More fun with Paul Ryan:

  1. Krugman is a far far far left extremist whose ideology would leave America as a socialist waste land. While the left embraces him as the only man that can be trusted the majority of Americans see him for what he is a destructive progressive whose goal is the destruction of the free market system that makes America the world leader it has been, until the Obama Administration that is.

  2. Brook’s criticism of Ryan is based on his argument that medicare is in “fine shape” financially. I’m not buying it. His numbers assume a > than 4% gdp growth. Which will provide a deficit of only 2.7 Trillion. However, I think that gdp assumption is ambitious. I note that we have only exceeded that mark just once in the last 7 years.

    I’m sure there are valid criticism’s of Ryan’s “Road Map” but those criticisms have not been expressed by Brooks.

    1. Krugman’s argument is not much better. I personally find it interesting that the left leaning Tax Policy Center, which Krugman used for his analysis to attack ryan, took Ryan’s side in the dispute:

      Krugman’s insight for which he won a noble prize was brilliant. He showed that communities can become industry industries without any inherit speciality for the area. (ie. Detroit became the center for automobiles, North Carolina for textiles). In other words, if you build it, it will come.

      However, Krugman’s strong suit is not the interworking of policy. Heck, he has missed basic assumptions:

      1. Krugman’s insight for which he won a noble prize was brilliant. He showed that communities can become industry industries without any inherit speciality for the area….However, Krugman’s strong suit is not the interworking of policy. Heck, he has missed basic assumptions:

        That’s putting it mildly. The bottom line is, he writes opinion pieces for the New York Times. Like them, don’t like them, whatever. But don’t pretend that they are peer-reviews economic papers in his field of study. In an independent, peer reviewed study, he was found to have his opinion change most dramatically depending on who is in the White House.

        Which is good to know – I remember being very confused for awhile because I used to read his stuff & think he made a lot of sense. And then as he started turning over, I remember not quite being able to understand where he was getting things – being at a loss to connect the dots between positions with a consistent underlying framework of principles. There’ve always been some people who thing deficits are bad, and others that think they’re OK. I get that & enjoy a debate with people who don’t mind spending a lot more than we take in. But when you swing from one side to the other depending on who’s in the Oval Office, I just can’t respect that.

  3. I agree Krugman is very partisan, which is fine, he is not the only one. I even agree with him most times, but when he speaks economics, his credentials are impeccable. He has a phd from MIT in economics. Does he bring his liberal leanings into his economics, sure but so does Paul ryan and ryan doesn’t have anywhere near the credentials.

    And Super ID, those articles are a little misleading(par for the ryan course) but I am not going to rehash the whole krugman/ryan battle. This post was about Dean Baker firing on ryan and his plan. Baker is not a partisan economist and he blows holes in ryans plan, and almost comes out and calls him a liar(but not quite). The interesting thing to this, is that ryan can’t handle any criticism but left this one alone. Its not like him, unless he is smart enough to pick his battles and knew he had no chance of winning this one.

  4. “Baker is not a partisan economist” That’s a bit dishonest as the man works for a liberal think tank:

    The man works for a liberal think tank:, he co-author’s articles with Krugman: “Asset Returns and Economic Growth,” (with Brad DeLong and Paul Krugman).

    But regarding the merits of his arguments, Baker argues that Ryan is wrong because medicare spending projections are not tens of trillions of deficit. As Baker notes Ryan’s numbers are based on the Medicare Chief Actuary, Richard Foster’s, numbers. By way of reference, Foster created a big stir when he publicly disavowed the trustee’s report and published his own:’-report-publishes-an-“alternative-report”/

    In response, Baker comments only that “The current chief actuary, Richard S. Foster, was not appointed by Obama.” Does it matter who appointed Foster? The question is whether his report;s numbers are correct or whether the trustee’s report’s numbers are correct. Baker takes the side of the trustees without even questioning the trustees’ assumptions. I believe that Baker is wrong on this one.

    For example, the trustees’ number assume that medicare physician fees will go down 30% over the next three years. That’s implausible. It would cause physician’s to lose money treating patients. As Foster concludes, physicians would then leave medicare in droves.

    1. The Physician reimbursement reductions are part of the medicare law. However, the fee reductions have always been over-ridden by congress. Of course, the trustees realize that and comment in footnote 11 (the good stuff is always buried in footnotes) that:

      “Due to the current strong likelihood of Congressional action to override the physician fee reductions required under current law, and to do so after Part B financing has been established for a given year, it is appropriate to maintain a higher level of reserve assets to prevent fund depletion under this contingency.”

      In other words, the trustee’s numbers are based on the assumption that physician reimbursement rates will be reduced, when they observe that the reimbursement rates are unlikely to be cut. If the reimbursement rates are not cut, the trustee’s numbers are complete bunk. Of course, Foster had the same criticism, and thus disavowed the trustee’s projections.

    2. He is not partisan in terms of always and only bashing the republicans. he is also never called upon by the administration, probably because he never has kind words to say about Geithner/summers, etc… He has been predicting the recession for some time and it fell on deaf ears as those in charge only cared about appeasing wall st. He pretty much only writes about economics, unlike krugman who has numerous op-eds not associated with economics.

      As for does it matter who appoints someone, unfortunately I think it does in todays political climate. Look at all the trouble they are having getting elizabeth warren through.

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