Greg Mankiw thinks he’s really clever:

I have a plan to reduce the budget deficit.  The essence of the plan is the federal government writing me a check for $1 billion.  The plan will be financed by $3 billion of tax increases.  According to my back-of-the envelope calculations, giving me that $1 billion will reduce the budget deficit by $2 billion.

Now, you may be tempted to say that giving me that $1 billion will not really reduce the budget deficit.  Rather, you might say, it is the tax increases, which have nothing to do with my handout, that are reducing the budget deficit.  But if you are tempted by that kind of sloppy thinking, you have not been following the debate over healthcare reform.

I’m not going to attack this particular point about PPACA, because others have done it already.

I do think, however, it needs to be pointed out that this is indicative of the alternate universe in which most of the mainstream GOP resides.  In this alternate universe, tax increases are not a means to reduce the deficit.  They point this out as if it’s some sort of joke that you don’t get.  From Michele Bachmann’s “tax cuts shouldn’t be considered a deficit,” to CUTGO, to the new slash-and-burn budget plan straight out of Paul Ryan’s wet dream, it is clear that, in the mind of the modern GOP, the only path to a balanced budget is with spending cuts.

This is horribly unrealistic.

Any serious plan to take control of our budget situation must include an increase in our average tax rates.  And that’s no joke.

Hot off the presses, from “The Republican Road to Recovery”

Democrats assume that the free-market system has failed and that a more robust federal government must now rescue the nation. The American people reject that notion and know, as Republicans do, that government has failed and that this financial crisis is the result of decades of misguided government policies that interfered with the free-market. In addition to a loose monetary policy by the Federal Reserve that fueled a housing boom, government-sponsored enterprises (GSEs), Fannie Mae and Freddie Mac, and federal mandates that weakened lending standards contributed to a perfect storm of government-induced failure.

Unbelievable.

The GOP is now a fringe party, full of fringe ideas, and occupied by fringe zealots.  It’s pure Austrian School garbage.

It should now be the goal of the Democratic party to pass the budget without a single Republican vote.  It certainly would make me feel better.  I don’t want anything in the budget that looks good to this group of out-of-touch, anti-information, market fundamentalists.

[Update]

Nate provides a much lighter post.  Hilarious.