subject: The Republican Budget Proposals Are Dotted With Flaws [print this page] The budget debate has come down from the high levels of intellectual thinking to crass sabre rattling that does not make sense at times.
The Democrats want to stick to the ideas of the past century but has no clear cut plan as to from where the money will come from to support it. They are wary of asking the voters to pay for it through increased taxes. It will not suffice to tax the wealthy alone because there are not enough wealthy Americans to fund the trillions and trillion required to foot the bill of government operated welfare programmes an amount that will explode in forthcoming years.
Since Paul Ryan of the Republicans (chairperson of the House Budget Committee) had the courage to take the first step in bringing about something new, everyone will have to listen to him especially since his party controls the House.
But his plan is dotted with flaws. In its present form the moderate voters will not accept it and there is little chance of it being passed. It does not deal with the structural troubles that have been the bane of the economy stagnation in wages, widening inequality and falling growth rates. It does not have the answer to increasing costs in health care; neither is there the scope for creative policy implementation in the future; there are no funds that will enable Americans of tomorrow to take up cudgels against unpredictable challenges.
Ryan has to be thanked for making a start and hopefully the debate will evolve along more progressive lines as it proceeds.
Ryans call for basic reform in the tax code is along the right lines. Tax revenues should be 20% of the GDP however and not his proposal of 18%. This will enable preservation of funds for some of the spending that Ryan wants to amputate. For instance Ryan wants to cut back the Pell grants to the levels of 2008. But the challenges coming from China and India demands that America should spend more on the Pell grants, on research in science, primary education and other types of investments in human resources other than the proposals of Ryan.
Secondly the seniors should share their burden proportionately. David Leonhardt has pointed out that two people who are 56 years old with earnings that are average will pay towards Medicare $140,000 but gain benefits of $430,000. This is unfair imposition on Americans of tomorrow.
