"Paul Ryan's budget: 4 ways it proves he's not a fiscal mastermind" at The Week

[applegrove]

Paul Ryan's budget: 4 ways it proves he's not a fiscal mastermind

at the Week

http://theweek.com/article/index/232225/paul-ryans-budget-4-ways-it-proves-hes-not-a-fiscal-mastermind

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1. Ryan's numbers don't add up
Ryan's budget calls for major tax cuts for corporations and the wealthy that would cost $4.3 trillion over the next 10 years, according to the nonpartisan Tax Policy Center. But Ryan hasn't fully explained how he would make up for that lost revenue. His proposed cuts to entitlement programs would free up only $1.7 trillion: $700 billion from Medicare savings in President Obama's health care overhaul, and billions more from slashing food stamps and health insurance for the poor and disabled. Ryan claims he would also eliminate certain tax benefits and deductions, many of which are very popular with middle- and lower-income families, but hasn't specified which ones. He says he will further cut spending, but hasn't detailed how.

2. His budget would balloon the national debt
Without explaining where the money would come from, Ryan somewhat implausibly claims government revenue would climb to 19 percent of GDP by 2028, up from 15 percent in 2010. And even if we were to take Ryan at his word, his plan would still not balance the budget "until the 2030s, while adding $14 trillion in debt," says Matt Miller at The Washington Post. His plan would add $6 trillion in debt "over the next decade alone," requiring yet another hike to the national debt ceiling — even though Republicans have strenuously opposed such moves under Obama.

3. He's performing some Medicare magic
Ryan has proposed transforming Medicare into a voucher program, giving elderly citizens a choice to either purchase traditional Medicare coverage or private insurance. Ryan claims that the move would bring federal health spending down to 4.75 percent of GDP in 2050, down from 5.5 percent in 2010. "If you believe that is likely," says Martin Wolf at The Financial Times, "I have a bridge to sell you." The problem is that Medicare enrollment is set to swell dramatically as more Baby Boomers retire. In addition, there is no evidence seniors will opt for private insurance — after all, the rising cost of private insurance has been a problem for decades.

4. He hopes to shrink the government to an unrealistic degree
Ryan projects that his budget will eventually reduce federal spending to 14.25 percent of GDP by 2050, down from 22.5 percent in 2010. However, to reach that number, all spending besides health care, national security, and interest rate payments would have to be reduced to 3.5 percent of GDP; this 3.5 percent would have to cover expenditures for education, scientific research and development, national parks, farm aid, veterans' benefits, small-business loans, infrastructure, and much more. The U.S. has spent at least 8 percent of GDP on these categories every year since World War II, says the Congressional Budget Office. Critics say such a goal is wildly unrealistic.

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