The starting point for the A-Z discussion is Jay Newton-Small’s transcription (Yay!) of her interview of Paul Ryan regarding the (mind you) official GOP 2012 Budget proposal. The interview is a treasure trove, in itself , and in the meta-analysis of what journalists in Beltway do. Stuart and I will be referring to a number of resources as we discuss the document.
My discussion with Brad DeLong a couple of weeks ago is one such resource (transcript (pdf)).
Paul Krugman has a wealth of material on the proposal:
The arguments Ryan uses to support his budget, and to reject Keynesian economics as discredited “outliers” in the economics profession are demolished by Brad Delong and by Krugman, calling into question even the intellectual honesty of the New Classicist/Real Business Cycle theorists.
Matt Yglesias notes the plan is expressly designed to reduce income transfers from rich to poor.
And Robert Kuttner asks the question that’s been plaguing me: Is Obama in?
Stuart’s answer? Pretty much on board, actually. Do click through to read the report he refers to. Ryan’s plan for Medicare is the New Democrat plan.
Here’s DeLong at Virtually Speaking on the economics underlying Ryan’s plan:
The issues that actually had been settled at least among the working consensus of mainstream economist since 1829 now appear to be completely up for grabs. And the most puzzling thing is I at least can’t figure out what the coherent argument on the other side is. That it’s very clear that some like say, Nobel prize winner, Robert Lucas at the University of Chicago believe that special interventions into the banking sector or government fiscal expansion can’t help reduce unemployment in a situation like we have today. That the only thing that can work is normal monetary policy. And it’s also very clear that Lucas believes that the economists in power who say otherwise whether they’re Christry Romer or Larry Summers or whoever, are kind of corrupt people.
Someone like Lucas not only believes not only that the fiscal multiplier is zero, that he doesn’t believe that anyone else he regards as reasonably smart, and he does regard Christy [Romer] and Larry [Summers] as smart could possibly believe that the fiscal multiplier is anything other than zero.
But as you say in that post, there’s evidence that says they’re simply wrong.
There’s a bunch of evidence suggesting that it’s wrong, and there’s also no theoretical argument for why it should be zero.
And there’s also
There is a theoretical argument that the tax cut multiplier should be zero, which hinges on the identity of consumers and taxpayers and requires things like not immigration, no childless people, the distribution of benefits from the distribution of taxes levied in the future be the same of tax cuts given in the present, etc. etc.
But they literally say
There’s no argument on the spending side.
They literally say that the government employing people to build bridges will not raise the employment level.
Yeah. That’s what Eugene Fama said explicitly, on his weblog at the start of 2009.
That’s what Lucas said. He said that there is nothing to apply the multiplier to. Indeed, that’s what Friedrich Hayek said when he gave a seminar back in 1932 in Cambridge, England at the end of which according to Robert Skidelsky Richard Kahn raised his hand and said “Are you telling me that if I went out and bought a new overcoat it would have no effect on unemployment?” and Hayek supposedly said “Yes.”