That turns once-perceptive journalists into peddlers of conventional wisdom:
On Wednesday, David Walker, CEO of Comeback America Initiative, proposed another alternative that would challenge the political orthodoxy of both parties. To most Democrats’ chagrin, Walker’s group wants to block-grant Medicaid, repeal and scale back parts of the Affordable Care Act, and raise taxes on Americans who are above the poverty live but pay no federal income taxes, as it outlined in a 2011 fiscal reform plan.“There are a lot of people well above the poverty rate who aren’t paying income tax,” says Walker, the former Comptroller General who previously ran Pete Peterson’s foundation. He acknowledges that the tax change won’t be a big money saver. “That’s not going to generate a lot of money, but we’ve got to have more people have a stake in government finance,” he explains, adding that the framework would hold middle-class taxpayers harmless.
Likewise, Walker says, Republicans wouldn’t be happy with the group’s proposal to scale back defense spending to President Obama’s recommended levels, or with the higher effective tax rates on the wealthy. And many in both parties might be taken aback by Walker’s proposal to impose a consumption tax akin to a VAT and phase out the employer deduction for health care, which would radically shift the country away from a employer-based health care model. (Walker says it would be replaced by a system that would offer “basic coverage for all citizens,” though he didn’t go into the details.)
Let's run down the ledger here, shall we?
Democrats need to sacrifice:
1. Universal health care.
2. Employer-based (i.e., affordable) health care.
3. Federal funding for poor people's health care.
4. Poor people having their taxes raised.
5. Poor people having their taxes raised again via VAT.
All of which (except for Item #1) will be used by Team Republican as a political cudgel against Democrats.
On the other side, Republicans need to sacrifice:
1. Tinkering with the tax code or cutting military spending (but not both).
Either of which will be used by Team Republican as a political cudgel against Democrats.
Note to Ezra: This is not "challenging the orthodoxy of both parties." This is called "shredding the social safety net while giving Republicans 98 percent of what they want." It's also horrible fiscal policy to be promoting in a sluggish economy---and not just because it punishes poor people for the crime of being poor but because, well, it's horribly contractionary fiscal policy. What's so bad about that, you ask? Ask these people how well they like their contractionary fiscal policy.
Paging Dr. Krugman. Someone needs an Econ intervention, stat.
---Vitelius
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