Naked Capitalism Link of the Day

Today's link: Ryan's Budget Plan is Ridiculous, But it Could Shift the Debate, by David Dayen:

So this is a pretty pathetic budget. And it also happens to be a complete fiction. The numbers are not to be trusted at all. Ryan assumes $1.4 trillion in savings from health care repeal when the Congressional Budget Office scores repeal as increasing the deficit. He uses “dynamic scoring” to perpetuate a fiction that tax cuts will increase tax revenue. He sets unrealistic spending caps without determining how to get there or how future Congresses not bound by his budget will abide by them. Worst, he assumes a world-historical low unemployment rate based on a Heritage Foundation study that claimed the Bush tax cuts would lead to the same kind of prosperity (hint: they didn’t). Indeed, by 2021, Ryan assumes a 2.8% unemployment rate, which is how he achieves the revenue needed to make the numbers work. Included with this projection is an implausible housing boom. Jim Tankersley and Katy O’Donnell, middle-of-the-road journalists, say in their headline that the plan “pushes optimism to the outer limits.”

Where would that spectacular growth come from? Based on an analysis provided to Ryan by the Heritage Foundation, a conservative think tank, it would come from the liberating effects of lower taxes and less government debt.
But the forecasted growth is so high that it falls on the outer edge of what most economists say is plausible—or even desirable—for the next decade [...]
“They don’t have a strong track record of their projections matching reality when it comes to these kinds of scenarios,” said Heather Boushey, senior economist at the Center for American Progress. In particular, Boushey called the math behind projections of massively increased housing investment “fuzzy” given the realities of the market.
“I just don’t see how you spark a boom in housing,” she added. “Would that be good for the U.S. economy? Would that be at all likely? I think the answer to both questions is no.”

As long as everyone’s throwing around the word “serious,” this is the least serious budget proposal in recent history. It’s made up of unicorns and rainbows.

There is also a link to Bronte Capital about a another Chinese corporation which appears to be a fiction to separate westerners from their investment capital.  I would wager that the China bubble will burst in the next couple of years.  Then we'll really have a mess on our hands.