Wednesday, June 8, 2011

Tim Pawlenty's economic plan -- and mine!

In case you haven't heard, Minnesota Superstar Tim Pawlenty gave a speech the other day where he rolled out his economic agenda. Some key points:
  • Pawlenty hopes to grow the economy by 5 percent for ten years. (He added, "This is not some pie-in-the-sky number," and that "it's been done before," citing Reagan's presidency, where the economy grew by 4.9% for less than four years.)
  • The top tax rate would be cut by 28%.
  • The corporate tax rate would be cut from 25% to 15%.
  • A bevy of other taxes should be done away with entirely, including the estate tax and the capital gains tax.
  • Government spending should be capped at 18% of GDP.
  • All of this, he claims, will boost the economy and ultimately increase tax revenues, resulting in deficit reduction.
It probably doesn't need to be said, but the silliness of this plan can hardly be overstated. Just the spending cap alone -- dramatically lower than anything proposed by the current House Republicans -- would necessitate the virtual abolition of either Medicare and Medicaid, or alternatively, practically the entire federal government. Even then, the tax cuts would add an additional $8 trillion to the debt, unless they really did boost the economy enough to increase tax revenues by $8 trillion. (And as Ezra Klein points out, his growth projections would require the country to achieve an unemployment rate of... -1%.) Let's say -- just on a hunch, you know -- that Pawlenty could pass the tax cuts, but either balked or was beaten back when he tried to end Government As We Know It. And let's say the predicted revenue gains fail to manifest themselves (you know, because they rely on mathematically impossible growth statistics). Ten years after Pawlenty's election, the 2023 United States national debt would have more than doubled, to approximately $30 trillion.

Is there anyone out there who believes that these numbers are plausible? It's like he pulled them out of a hat. Doesn't it bother anyone that the Second Most Boring Serious Republican Candidate just gave a major economic speech where he basically just made everything up? I honestly find it deeply disturbing. I, for one, would like to see a measured defense of Pawlenty's plan from somebody who is borderline numerate. Not because I think there's any chance of convincing me, but because it would set my mind at ease to know that a large part of the political dialogue isn't being argued in bad faith. (Unsurprisingly, a quick search has failed to turn up evidence of any such defense.) And yet, were he to win the nomination, an ungodly number of low-tax, small-government maniacs would happily hop behind this agenda, whether the dots connect or not. "Damn the torpedoes, at least he's cutting the top marginal tax rates!"

I guess part of the problem here is that these sort of Right-Wing Pipe Dream Plans (RWPDPs? They're prevalent enough to need an acronym) are presented as the right pole in a bipolar debate. Meanwhile, the Democratic plan (maybe the president's budget? Or possibly one of the marginally-more-progressive think tank proposals) is presented as the left pole. So everyone naturally assumes the two things are equivalently reasonable.

The solution, then, is to propose a left-wing alternative of the Pawlenty plan. Given that doing such a thing requires zero budgetary or economic expertise, I think I'm up to the task. So without further ado, here's the Official 4:17 AM Economic Growth Plan for a Brighter and More Prosperous America of the Future Where It Is Morning:
  • Social Security will begin paying benefits at 45, down from 65.
  • The corporate tax rate will be quadrupled.
  • The estate tax will be applied three times: first at the drafting of the will, secondly upon death, and thirdly at the exact moment that the dearly departed's body is lowered into the earth.
  • All income past the first $1,000,000 will be taxed at 100%, except for that of bankers, oil executives, military contractors, and small business owners. Theirs will be taxed past the first $150,000.
  • A floor will be placed on federal spending, requiring a minimum of 44.452% of GDP be spent by the government every year. Any unspent money under the floor will be distributed at homeless shelters.
  • Medicare and Medicaid will be expanded to include the purchase of hybrid cars, Apple products, and organic granola as legitimate medical expenses. The cost of these items will be kept down because the government has the clout to negotiate better bargains with carmakers, granola producers, and Apple.
  • The direct investment in the economy envisioned by this plan will grow the economy by 5% a year.
  • Increased tax revenues will eliminate the deficit by year 2025.

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