ECONOMICS:THE BIG bad event of last week was, of course, the US Supreme Court hearing on health reform. In the course of that hearing it became clear that several of the justices, and possibly a majority, are political creatures pure and simple, willing to embrace any argument, no matter how absurd, that serves the interests of Team Republican.

But we should not allow events in the court to completely overshadow another, almost equally disturbing spectacle. For, on Thursday, Republicans in the House of Representatives passed what was surely the most fraudulent budget in US history.

And when I say fraudulent, I mean just that. The trouble with the budget devised by Republican Paul Ryan, chairman of the House Budget Committee, isn’t just its almost inconceivably cruel priorities, the way it slashes taxes for corporations and the rich while drastically cutting food and medical aid to the needy. Even aside from all that, the Ryan budget purports to reduce the deficit. But the alleged deficit reduction depends on the unsupported claim that trillions in revenue can be found by closing tax loopholes.

And we’re talking about a lot of loophole-closing. As Howard Gleckman of the nonpartisan Tax Policy Centre points out, to make his numbers work Ryan would, by 2022, have to close enough loopholes to yield an extra $700 billion in revenue every year. That’s a lot of money, even in an economy as big as the US. So which specific loopholes has Ryan, who issued a 98-page manifesto on behalf of his budget, said he would close? None. Not one. He has, however, categorically ruled out any move to close the major loophole that benefits the rich, namely the ultra-low tax rates on income from capital. (That’s the loophole that lets Mitt Romney pay only 14 per cent in taxes, a lower tax rate than that faced by many middle-class families.)

So what are we to make of this proposal? Gleckman calls it a “mystery meat budget” but he’s being unfair to mystery meat. The truth is that the filler modern food manufacturers add to their products may be disgusting but it has nutritional value. Ryan’s empty promises don’t. You should think of those promises, instead, as a kind of throwback to the 19th century, when unregulated corporations bulked out their bread with plaster of Paris and flavoured their beer with sulphuric acid.

Come to think of it, that’s precisely the policy era Ryan and his colleagues are trying to bring back. So the Ryan budget is a fraud; Ryan talks loudly about the evils of debt and deficits, but his plan would actually make the deficit bigger as it inflicted huge pain in the name of deficit reduction. But is his budget the most fraudulent in US history? Yes, it is.

To be sure, we’ve had irresponsible and/or deceptive budgets in the past. Ronald Reagan’s budgets relied on voodoo, on the claim that cutting taxes on the rich would somehow lead to an explosion of economic growth. George W Bush’s budget officials liked to pretend tax cuts were only temporary, then demanded that they be made permanent. But has any major political figure ever premised his entire fiscal platform not just on totally implausible spending projections but on claims that he has a secret plan to raise trillions of dollars in revenue? What’s going on here? The answer, presumably, is that this is what happens when extremists gain complete control of a party’s discourse: all the rules get thrown out the window. Indeed, the hard right’s grip on the GOP is so strong the party is sticking with Ryan even though it’s paying a price for his assault on Medicare.

Now, the House Republican budget isn’t about to become law as long as president Barack Obama is sitting in the White House. But it has been endorsed by Romney. And even if Obama is re-elected, the fraudulence of this budget has important implications.

Keep in mind that the Obama administration spent much of 2011 trying to negotiate a so-called “grand bargain” with Republicans, a bipartisan plan for deficit reduction over the long term. Those negotiations ended up breaking down, and a minor journalistic industry has emerged as reporters try to figure out how the breakdown occurred and who was responsible.

But what we learn from the latest Republican budget is that the whole pursuit of a grand bargain was a waste of time and political capital. For a lasting budget deal can only work if both parties can be counted on to be responsible and honest – and House Republicans have just demonstrated, as clearly as anyone could wish, that they are neither. – (New York Times service)