Tuesday, April 10, 2012

Counterpoint: Krugman is Defending Centrism

While I disagree with the interpretation of Paul Krugman’s latest column in my colleague Paul’s post, I encourage everyone to read it and take its arguments about the Ryan budget, centrism, and rhetoric seriously. My take on the point of Krugman’s column is that far from “trashing anyone who might stand up for centrism, ” it in fact does exactly the opposite: it defends centrism by critiquing centrists who allow the tenets of a principled centrism to be ignored. If centrism as a doctrine is to mean anything, its proponents have a responsibility to examine the policy proposals of those who want to claim the centrist mantle.

And in Krugman’s view (and mine) the numbers that emerge from the details of the Ryan budget should preclude its embrace by centrists, who in theory should look for proposals that balance the budget by taking some ideas from the right (cutting spending) and some ideas from the left (increasing revenue). However, the Ryan reduces revenue by $4.6 trillion, doesn’t specify any of the loopholes that would need to be closed to pay for that decrease in order to avoid exploding the deficit, and sets a target for government spending on everything other than Medicare, Medicaid, CHIP, and Social Security at a ludicrously low 3.75% of GDP. (As Jonathon Bernstein notes, “Since Ryan has separately objected to cuts in the military below 4% of GDP, it means that Ryan would theoretically not be able to meet his own target, even if he shut down student loans, FEMA, NASA and the National Weather Service, the FBI and federal prisons, all immigration enforcement, the FDA and other food safety programs, air traffic control, and more. Including programs for veterans.”)

The Ryan budget, then, certainly represents many things over which there could be legitimate disagreement: among them, the proper size of government, the level of support that the government should provide to our nation’s poor, and the economic effectiveness of continuing and extending tax cuts for the wealthiest among us. But, as it only relies on tax cuts and even then would fail to close the deficit, it is clearly not a centrist document in any meaningful sense of the word.

The larger point, I think, is that allowing such a proposal to be labeled “reasonably centrist” without examining its contents closely does real damage to centrism. There is, as Paul notes, a real constituency amongst American voters for centrist, bipartisan solutions to our problems. And it seems to me that presenting the Ryan budget to those voters as centrist does more damage to the future possibility of truly centrist solutions than Krugman’s attempt to honestly (if harshly) assess whether the proposal is being given a pass without being examined. 


  1. Blake cites that the Ryan budget reduces revenue by $4.6 trillion without explicitly accounting for the corresponding spending decreases necessary to prevent deficit expansion. Other estimates show his proposal to be revenue neutral. The (jarring) difference between these two claims is easily understood.

    Yes, it's true that Ryan's plan as it exists does not include a line item list of all the tax shelters which need to be eliminated. After all, the tax code contains more than 5.6 MILLION words. Rather, Ryan's proposal makes generalized statements about how reducing tax loopholes to increase revenue will offset marginal rate decreases (including that of a nominal corporate tax rate which is currently higher than any other developed nation in the world). He then leaves the specifics up for debate.

    The more important point is that Ryan's plan doesn't need to address this in detail yet. Ryan's budget will never become law as its written and he doesn't intend it to. After all, it's the President who submits the budget to congress for approval, not the Congressman from Wisconsin. Ryan's plan is a template for how to address the two biggest issues crippling our national finances - entitlements and the tax code.

    Furthermore - and back to the discrepancy between the estimates - the CBO (the nonpartisan authority on budget issues) has not yet released its report on the net effects of Ryan's plan. Instead, we have some claiming it's "revenue neutral" and others claiming it's "draconian tax cuts for the rich, stripping Gramma of her medicine." Come on guys, we all know the truth is somewhere in between. But instead of getting reasonable debate - which Ryan's proposal should generate - we get more acerbic caricature. We get words like "trash," "Trojan Horse," "Cult," "racist," "sexist." As if Paul Ryan sat down to write a racist, sexist and cultish budget.

    What we do know from the CBO is that Obama's budget - which again, couldn't even muster up one vote from a single Democrat - will increase the debt by $1.2 trillion this year and almost another trillion next year. That's not sustainable. And that's what we ought to be discussing.

  2. Well, it's not revenue neutral. It's just not, and those people saying it is are wrong. Yes, the tax code is complicated and has a lot of words, but its not infinite. The only possible way you could raise the 4.6 Ryan is talking about is by eliminating essentially all of the loopholes...which Ryan is reluctant to say he will do. It isn't enough to say he's leaving the specifics up for debate because the entire debate is the specifics. Ryan believes what he believes: it just so happens that people like myself (and Paul) believe what he's saying is dead-wrong, and will substantively harm the situation of an already economically divided america.

    I'm with Krugman and Blake here pretty much all the way. The Ryan budget is not revenue neutral, and even if it were its a reflection of his ideology. That's fine, he believes that, but lets not kid ourselves into thinking it fixes the budget. It alters how taxation works in the belief that lower taxes lead to prosperity (I think the empirical experience of US growth in the 2000s refutes that damn well), but its a method of cutting government services for lower taxes to proportions that even Reagan wouldn't have dreamed of. That's not liberal bias, that's what it is.

    In essence, I would go on this rant. The truth is not always in the center, 350 million americans can be wrong, and in this day and age the democrats are orders of magnitude more correct than the republicans. Cutting government spending has been shown throughout Europe, where austerity has been much harsher, to negatively affect growth especially when a central bank is unwilling to tolerate inflation. I believe cutting spending in a recession is self-defeating, I believe the US debt level is only scary at cursory glance, and I believe that the Republicans are much less inclined to support their arguments with data than Democrats. When people say they want a party willing to cut spending and raise revenue long-term, even with a big lean towards spending cuts, they're talking about Democrats even if they don't know it. I'm a Democrat, and I don't want a centrist solution that keeps drifting further and further to the right in spite of all evidence. Democrats are willing to compromise, but the idea that the starting point should be massive tax decreases for the rich on the one side, thereby making the "center" still substantial tax decreases on the rich on top of cutting government services, is not a compromise. Simpson-Bowles is a compromise. This, a compromise with Ryan's budget as a starting point, is a sell-out.

  3. Mr. Holt -- I appreciate the robustly prosecuted point-counterpoint which characterizes your recent exchanges with Mr. Jordan regarding Representative Ryan’s proffered economic blueprints; the entire intellectual community profits when opposed positions are parsed, dissected, and elucidated with skill (“As iron sharpeneth iron, so a man sharpeneth the countenance of his friend” – Proverbs 27:17, KJV). Sadly however, the civility which characterizes your local discussions within the Duke community no longer appears to be a recognized dialect on the banks of the Potomac, having become – like Latin – a moribund language.

    I would argue that the economic problems confronting the U.S. – daunting as they may be – are potentially less divisive than the inflammatory rhetoric which has come to typify our national discourse. The use of the term “Trojan Horse” by Mr. Obama – with its presumptive implications of calculated deception -- neither edifies nor elevates the national discourse, and risks demeaning the office of the Presidency, as well as the occupant. Sadly as well, Mr. Krugman – a man of substantial intellectual capacity and possessed of considerable professional acumen – has devolved into a disappointing caricature of himself. As evidence of this unfortunate devolution, I offer Mr. Krugman’s own self-satisfied self-portrait (NYT, September 23, 2010, 3:34 PM): “The best line I’ve ever heard about Ayn Rand’s influence: ‘There are two novels that can change a bookish fourteen-year old’s life: The Lord of the Rings and Atlas Shrugged. One is a childish fantasy that often engenders a lifelong obsession with its unbelievable heroes, leading to an emotionally stunted, socially crippled adulthood, unable to deal with the real world. The other, of course, involves orcs.’ ” Mr. Krugman’s smug rhetorical delight in equating conservative economic voices with the terms “childish, obsession, unbelievable, stunted, and crippled” is a disappointing retreat into schoolyard name-calling, entirely unbefitting of the pedestal voice which Mr. Krugman once deserved to command. Res ipsa loquitur.

    Glenn D. Jordan
    BSE, Biomedical Engineering, Duke University, Class of ’73
    MD, University of Virginia, Class of ’82