Giddy optimism. Those crack smoking think tankers at the Heritage Foundation earned their Republican welfare dollars on this one.
If Rep. Paul Ryan’s newly unveiled 2012 budget is signed into law, this is what Ryan’s economic forecasters say will happen: The unemployment rate will plunge by 2.5 percentage points. The still-sinking housing market will roar back in a brand new boom. The federal government will collect $100 billion more in income tax revenues than it otherwise would have.
And that’s just in the first year. By 2015, the forecasters say, unemployment will fall to 4 percent. By 2021, it will be a nearly unprecedented 2.8 percent.
According to their thinking Ryan's vision of eternal prosperity will blossom as soon as uncertainty is removed from the market. On the Sunday talk shows Paul Krugman succinctly swished away that silliness. The job market and equipment investment is still moribund because manufacturers are still sitting on excess capacity. That won't suddenly disappear with Ryan's fairy dust.
Ryan and his genius economic team must have been watching a special Glenn Beck highlight reel Sunday so they missed the 60 Minutes feature on mortgage document robo-signers and the many thousands of fraudulent mortgage documents that are going to gum up the courts and force foreclosures to grind to a halt. Talk about uncertainty. No-one can be sure they are buying the legal title to a house, never mind the fact that housing prices have dropped for six months in a row.
Unless they get the pesky Dodd/Frank finance reform bill out of the way and start another round of crappy sub-prime loans and play 'hot potato' selling securitized mortgage bundles until the last sucker is left holding the the pile of shit, the housing market is going nowhere.
The forecasters say Ryan’s plan would result in the creation of nearly 1 million more jobs next year, above and beyond the jobs that would be created by normal growth. And that surge would continue, they say, adding 1.3 million jobs above business as usual for each of the next 10 years.
In the near term, many of those jobs appear to be the direct result of a new housing boom: The analysts project an additional $89 billion in residential investment in 2012 under the Ryan plan, and a total of more than $1 trillion in additional housing investment for the next decade. This would be despite the housing market's continuing litany of post-bubble woes: falling prices, a backlog of foreclosures, and a glut of unsold homes.
Those Heritage Foundation people must have been living in an undisclosed location completely shut off from reality. One edit they could be in Washington DC and still be completely shut off from reality in their Fox News cocoon. Don't they know there are over 14 million empty homes in the U.S., many of them caught in foreclosure limbo hell.
But Heritage modelers have made similar predictions before—and they didn't pan out. In 2001, they incorrectly projected that tax cuts pushed by President George W. Bush would create millions of new jobs; in fact, the 2000s were the most anemic decade for U.S. job creation since the Great Depression. Heritage experts say they couldn’t have predicted the 2001 recession or the Bush administration’s government spending increases.
Insanity is doing the same thing over and over again expecting a different result. These people are insane.
Oh, and by the way, the last time unemployment was at 2.8% was in 1953. That's not going to happen.
Part II coming up: Ryan's budget increases taxes for 90% of Americans. Guess who the other 10% are. No prizes for guessing right.
Part III: Medicare gets torn asunder but don't worry about it...as long as you're in the lucky 10% that can look forward to more tax breaks.