Krugman: The goal of the Beltway deficit hawks is “to tear up our current social contract” | A New Worlds in Birth

Krugman starts by asking the key question: If the deficit is so big and scary, why aren't the deficit hawks raisingtaxes, instead of lowering them as the Ryan plan would do?

Then he takes a professorial side trip. He notes here, as he has done elsewhere, that the U.S. is one of thelowest-tax nations in the first world. And then he presents the only Beltway plan that seriously addresses the deficit — the Congressional Progressive Caucus plan:

[T]he only major budget proposal out there offering a plausible path to balancing the budget is the one that includes significant tax increases: the "People's Budget" from the Congressional Progressive Caucus, which — unlike the Ryan plan, which was just right-wing orthodoxy with an added dose of magical thinking — is genuinely courageous because it calls for shared sacrifice.

True, it increases revenue partly by imposing substantially higher taxes on the wealthy, which is popular everywhere except inside the Beltway. But it also calls for a rise in the Social Security cap, significantly raising taxes on around 6 percent of workers. … All of this, combined with spending cuts mostly focused on defense, is projected to yield a balanced budget by 2021. And the proposal achieves this without dismantling the legacy of the New Deal, which gave us Social Security, and the Great Society, which gave us Medicare and Medicaid.

Great to see the Progressive Plan getting some mainstream attention for a change. You'd think it was the ugly stepchild in a Grimm Brothers fable. Then Krugman gets to his main point. The reason you're not hearing about that plan is simple — deficit reduction isn't really the Beltway goal (my emphasis):

The [reason the Progressive Plan isn't getting real attention] is the insincerity of many if not most self-proclaimed deficit hawks. To the extent that they care about the deficit at all, it takes second place to their desire to do precisely what the People's Budget avoids doing, namely, tear up our current social contract, turning the clock back 80 years under the guise of necessity.

I suspect he's known this for some time, just as we all have, and some sense of collegiality has prevented him from saying so out loud. No more. These tea leaves (Krugman's bluntness) suggests that the rhetoric resisting the "hawks" has entered a new, more truthful phase. Good.

By the way, that faux-hawkery (shades of Amy Winehouse) is a bi-partisan thing.

Oh, and that graph I promised? Krugman links to this article by David Leonhardt, which details the path that taxes have taken over the last fifty years, with a focus on the top .01%, the very high earners. You need at least $8.6 million per year to get into that group. Here's the graph:

Compare the drop in the tax rates of the top two groups (the top 1% and .01%) against the drop in the rates of all other groups. Note that is is all taxes, not just income taxes. Even under Clinton, folks, that top rate just kept falling after the initial bump up.

This is the story of our generation in a bitter nutshell. Needless to say, we won't get that money back by asking nicely.