Disecting Pawlenty's plan

Tim Pawlenty has come out with his budget plan. I wanted to take the time and walk you through it, hopefully explaining where he goes wrong.

"Between 1983 and 1987 --- the Reagan recovery grew at 4.9%. Between 1996 and 1999 ---- under President Bill Clinton and a Republican Congress. The economy grew at more than 4.7%. In each case millions of new jobs were created --- incomes rose --- and unemployment fell to historic lows. The same can happen again. "

This statement does not take into account the fact that both Regan and Clinton raised taxes. There can be no real growth without revenue.

"American businesses today pay the second highest tax rates in the world. That's a recipe for failure --- not adding jobs and economic growth. We should cut the business tax rate by more than half. I propose reducing the current rate from 35% to 15%. "

All of the countries that are part of the EU had to agree to strict tax cuts for businesses. This led to economic failure. It would be wise to make sure that companies actually paid their taxes before giving them yet another tax break.

"A balanced federal budget shouldn't be a political sound bite. It should be the law of the land."

this is downright ridiculous. The federal government cannot balance it's budget every year. Add on your new policies, and it becomes even harder. How can we balance a budget if we are cutting revenue from all revenue sources?

"For example --- I've proposed capping and block-granting Medicaid to the states"

By sending each state money for Medicaid you ensure that disabled adults have no access to care. By capping the amount you send, you ensure that families and individuals who fall on hard times cannot get access to health care.

"There's some obvious targets. We can start by applying what I call "The Google Test." If you can find a good or service on the Internet. Then the federal government probably doesn't need to be doing it. "

This has to be the most ridiculous statement I have ever read.
Here are his examples of things we should not do any more.
"The post office --- the government printing office --- Amtrak --- Fannie and Freddie were all built for a different time in our country. When the private sector did not adequately provide those services. That's no longer the case."

Let me take these one at a time.
1. The post office. Though it is true that companies like Fed ex and others allow you to send packages, they do not have access to mail boxes. If we gave these private companies access to mail boxes, people in rural areas would lose mail service. It is simply not worth it to a private company to send trucks out to rural areas. The cost they would have to pass on to the customer would be so much that people in rural areas would not be able to afford it.
2. The government printing office. If we sent all government printing to a private firm, that would be the only account they could have. Thus creating the same thing we have now.
3. Amtrak. Without light rail Amtrak is the only passenger train. Greyhound buses are not wheelchair accessible so millions of passengers would not be allowed to travel.
4. Fannie, and Freddie. Pawlenty is simply wrong when he says that a person can get an affordable guaranteed loan from a private lender.

The private sector cannot and does not provide these services.

Paul Ryan budget.

First let's start with a quote about the budget

I want to join those in commending Representative Paul Ryan, but for a slightly different reason. Representative Ryan has provided a valuable service to the country by tossing out a piece of warmed-over dreck that calls for a massive upward redistribution from the nation's workers to the rich. This is clear to anyone who reads it.

The reason why this is so useful is that there is nothing in the Ryan plan that has not been circulated in policy circles for decades. Almost everything in the plan has been tried and failed. The plan ignores obvious economic realities, such as the bubble-induced recession that has left 25 million people unemployed or underemployed. It doesn't lay a glove on the rich and powerful, while threatening to undermine the limited economic security enjoyed by tens of millions of middle class families.

Yet many pundits will applaud the plan as brave, innovative and creative. In making these pronouncements these pundits will immediately reveal themselves as worthless hacks who either lack the ability or desire to do their own thinking. Their endorsement of the Ryan plan will be like a scarlet letter permanently marking them as someone who has no place in a serious policy discussion. For this reason we owe Mr. Ryan a real debt of gratitude. [Center for Economic and Policy Research, 4/5/11]

Now a link to the budget.

http://paulryan.house.gov/UploadedFiles/PathToProsperityFY2012.pdf
Now let's read it and then I will come back and talk about it.