Tuesday, August 14, 2012

Romney-Ryan Economic Plans Would Increase Unemployment, Deepen Recession

Much has been written in recent days about Paul Ryan’s plans to privatize Medicare, dismantle Social Security, massively cut taxes for the wealthy and drastically redistribute income from the bottom to the top.

Yet perhaps the most disturbing feature of Ryan’s budget is that, in the midst of a prolonged recession, it would cost the US economy millions of jobs. Ryan’s 2011 budget plan proposes what the Center for Budget and Policy Priorities calls “the most severe and wrenching budget cuts in US history—two-thirds of which would come from programs for people of low or moderate incomes” (Medicaid, Pell grants, food stamps and low-income housing). According to the Economic Policy Institute, “the shock to aggregate demand from near-term spending cuts would result in roughly 1.3 million jobs lost in 2013 and 2.8 million jobs lost in 2014, or 4.1 million jobs through 2014.

Heather Boushey of the Center for American Progress calls Ryan’s budget “austerity on steroids,” while Mike Konczal of the Roosevelt Institute dubs it “bizarro stimulus.” Explains Konczal: “These are arguments that doing things traditionally thought of as the opposite of economic stimulus will be the real stimulus and help bring unemployment down.” (Ryan’s also a fierce critic of actions taken by the Federal Reserve to reduce unemployment.)

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