Saturday, April 9, 2011

The Ryan Plan and the Future

The Ryan Plan ..... hmmmmm.

The Ryan Plan is a starting point.
The Ryan Plan is the end of effective government.
The Ryan Plan is visionary and courageous.
The Ryan Plan is draconian and shortsighted.
"The Ryan Plan isn't perfect, but it's forcing Americans to confront reality ..."
"The Ryan Plan is simultaneously ridiculous and heartless."

I don't know what to think of the 2012 budget proposal from Wisconsin congressman Paul Ryan, but it makes me uneasy. And I don't like to feel uneasy about plans the government is making. At the same time, I've been feeling uneasy about the growing debt and deficit since about 2003 (unlike many who suddenly found God on government spending in 2009). In response to the budget, which Ryan is somewhat smugly calling a "Pathway to Prosperity," and which is a more concise version of the "Roadmap to the Future" he published two years ago, liberals and conservatives are weighing in. David Brooks and Paul Krugman of the New York Times have offered some contrasting commentary on the Ryan Plan, and Matt Miller of the Washington Post has criticized the plan with specific numbers breakdowns from the Congressional Budget Office.

The Ryan Plan intends to cut $4 trillion over the next decade from the budget and make sweeping changes to the way the government funds health insurance for the poor, disabled, and elderly through Medicaid and Medicare. Basically, the plan would retain Medicare for all people 55 and older, and would shift to a $15,000 voucher to buy health insurance in retirement after that. It would turn federal funding of Medicaid into "block grants" to states which they would fund according to their own plans and abilities. It would balance the budget by ... wait for it .... 2040. And it would accomplish all of this by making no cuts to military spending. It would accomplish this by not raising taxes. And it would accomplish this by lowering the unemployment rate to about 3%. That number, it should be pointed out, is a projection from the Heritage Institute - a rather ideological group who is basing the projection, not on numbers from the GAO or CBO, but on theories about supply side economics.

Overall, I concede Brooks' point that the Ryan Plan is a bold starting point. But I hope that's all it is. Because it truly is a ridiculous plan. No one on the recent debt commission has rationally argued that we can fix our long term deficit problems without raising some taxes. Ultimately, a revision of the tax code can lower some taxes, raise others, and close loopholes. And social insurance in the form of Medicare and Social Security could and should be fixed through simple means testing and more credible indexing. Beyond that, any proposal that doesn't seek to cut military spending or agricultural and corporate subsidies is either incredibly naive, myopically ideological, or just disingenuous.

We'll see.

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