Maybe I should outsource my reviews of McCain’s fiscal proposals to Mark Kleiman:
Bloomberg does a job on McCain’s Voodoo Economics 3.0. Again, it’s couched in “objectivese” … But they’ve got the numbers, and they catch McCain’s economic guru, Douglas Holtz-Eakin, with his analytical pants down, making him look like both a fool and a liar … The voters got fooled by this stuff when Reagan was pushing it, and again when Bush the Second was pushing it. Let’s hope that the third time is the charm. And let’s not forget that attacking McCain’s ideas is only half the battle. The key is to attack his character: it’s not just that the plan is bad, it’s that no competent and straight-talking person would even think of offering it.
So here’s the highlights from Bloomberg:
Two Washington research groups said McCain’s plan would cost more. The Center on Budget and Policy Priorities estimated his tax cuts would cost $5 trillion over a two-term presidency. The Tax Policy Center, run jointly by the Brookings Institution and Urban Institute, said they would cost $5.7 trillion McCain senior economic adviser Douglas Holtz-Eakin dismissed such estimates as “fantasy-land budgeting.” McCain’s proposals, Holtz-Eakin said, would balance tax and spending cuts to meet his balanced-budget goals … To help pay for the tax cuts, Holtz-Eakin said, McCain would save $30 billion a year by eliminating so-called rifle shot provisions. Those include items such as tax breaks for small insurance companies. But a Treasury Department report Holtz-Eakin cited as the source of his estimate states that $27 billion could be raised by eliminating narrowly used tax preferences spread over a decade, not a single year.
So the fiscal restraint proposals amount to less than $3 billion a year? For fiscal year ended October 31, 2007, the General Fund deficit was almost $500 billion. It is expected to be $700 billion this year. McCain wants to cut taxes and maintain high defense spending. How can anyone think tax offsets that amount to $3 billion a year and a few reductions in earmarks will balance the budget? Douglas Holtz-Eakin used to be better than this.
Update: McCain’s cocktail-napkin economics is further critiqued here.