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Paul Krugman v. Paul Ryan

It's on.

10:55 AM, Aug 8, 2010 • By JOHN MCCORMACK
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On Friday, liberal New York Times columnist Paul Krugman wrote a column attacking Republican congressman Paul Ryan of Wisconsin and Ryan's fiscal "Roadmap." In what could have easily passed for a bit of clever self-parody, Krugman angrily denounced Ryan a "charlatan" and a "dope," whose plan is a "fraud" and "drenched in flimflam sauce."

Ryan has a smart and grown-up response to Krugman in the Milwaukee Journal-Sentinel. Ryan writes:

The assertion by Krugman and others that the revenue assumptions in the "Roadmap" are overly optimistic and that my staff directed the Congressional Budget Office not to analyze the tax elements of the "Roadmap" is a deliberate attempt to misinform and mislead.

I asked the CBO to analyze the long-term revenue impact of the "Roadmap," but officials declined to do so because revenue estimates are the jurisdiction of the Joint Tax Committee. The Joint Tax Committee does not produce revenue estimates beyond the 10-year window, and so I worked with Treasury Department tax officials in setting the tax reform rates to keep revenues consistent with their historical average.

What critics such as Krugman fail to understand is that our looming debt crisis is driven by the explosive growth of government spending - not from a lack of tax revenue.

On this point, the Tax Policy Center--the left-leaning Brookings/Urban Institute project whose analysis Krugman uses to bludgeon Ryan--defends Ryan's integrity. And Megan McArdle has a good post exposing Krugman's apparent ignorance of the fact that "the JCT, not the CBO, typically handles the official scoring of tax legislation."

Krugman also attacks Ryan's plan to reform Medicare:

The only way the Ryan plan could save money would be by making those vouchers too small to pay for adequate coverage. Wealthy older Americans would be able to supplement their vouchers, and get the care they need; everyone else would be out in the cold.

In practice, that probably wouldn’t happen: older Americans would be outraged — and they vote. But this means that the supposed budget savings from the Ryan plan are a sham.

Ryan responds:

Krugman also recycles the disingenuous claim that the "Roadmap" - the only proposal certified to make our entitlement programs solvent - would "end Medicare as we know it."

Ironically, doing nothing, as Democrats would prefer, is certain to end entitlement programs as we know them, and in the process, beneficiaries would face painful cuts to these programs. Conversely, the "Roadmap" would pre-empt these cuts in a way that prevents unnecessary disruptions for current beneficiaries.

It reforms Medicare and Social Security so those in and near retirement (55 and older) will see no change in their benefits while preserving these programs for future generations of Americans. We do not have a choice on whether Medicare and Social Security will change from their current structure - the true debate is if and how these programs will be made solvent.

Here's how Ryan described the debate between statists and free-marketeers in an interview last February:

"So you either put the government more firmly in control the system and make it a government monopoly program--kill Medicare Advantage, kill HSAs,” and "deeply and systematically ration health care," or you can "break up the government monopoly, and bring in the power of the free markets."

"I would simply argue that the history of free market systems shows you more goods and services at lower prices, than closed centrally planned systems, which show you scarcity, rationing, and less innovation," says Ryan.

So, as a 40 year-old, Ryan says, "I am looking at a choice of two futures: Do I have a future of more control of my health care in a market system that’s competing for my business, for my needs, where I can customize my care, and I get support from the government on purchasing that health care, and a safety net so that poor and sick people get total support? Or do I go to a system where the government literally determines what kind of care I get, when I get it, if I get it?"

"Those are the choices we’ve got right now before us, and that’s the dirty little secret behind Obamacare."

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