Saturday, April 9, 2011

How many more of these victories before we lose the war?

Obama "won" another round in his political struggle with the Republicans by giving them draconian budget cuts in return for not shutting down the government and collapsing the economy if not western civilization itself.

But Republicans make no secret that they will be back demanding still more cuts for the new budget year that begins October first. The Ryan budget as its known is such a ridiculous document that even a tea-bagger should be able to see through it. Among the jewels it contains are forecasts like an increase in revenue based on a 2.3% unemployment rate. Five percent is considered full employment, even during WWII it didn't get that low when anybody with a pulse could get a job or was drafted.

Ryan also forecasts that the older the baby boomers get, the lower the cost of Medicare will be. His mechanism for this is to eliminate Medicare insurance and replace it with vouchers to buy private insurance. This will really save money as the people who can't pay out matching premiums out of pocket or are really sick and un-insurable will have their vouchers go unused while they die.

The Republican budget also expects that Defense spending, mandatory spending (things like interest on Reagan's debt) and non-defense discretionary spending will drop from the current 12% of GDP to 3.5% of GDP. (Defense contractors and red states with military bases take note)

There are also trillions in unspecified cuts in order to justify slashing the top rate of income tax rate for the rich and corporations to a maximum of 25%. No pretense is made of cutting taxes for the run of the mill Republican taxpayer.

Still they predict broadening the tax base will make up the difference. Let's see, a large segment of the population  will be to old to work and without medical care. The middle class will continue to have its wages driven down as Republicans have no intention of giving up free trade. This means that the middle class will either pay less taxes or be taxed at higher rate driving down consumption and quality of life. (still that's supposed to create jobs to the point of a labor shortage, even though they don't have any money to spend, hmmm)

And the people who have the money won't be taxed as much and yet tax revenue will increase. Free unicorns for everybody.