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Paul Ryan's Scylla, President Obama's Charybdis
We are doomed.
Rep. Paul Ryan (R-WI) is being widely feted by conservatives and widely derided by progressives for his latest budget proposal. The New York Times has rolled out the latest iteration of the same old "Robert Bork's America" litany it tediously lobs at every Republican budget -- Mr. Ryan's plan will kill poor people, destroy the environment, make preschool unaffordable (horrors!) &c. &c. Meanwhile, Mr. Dan Henninger at the Wall Street Journal is waxing rhapsodic again about Rep. Ryan's presidential potential.
All this for a plan that will not even balance the budget until after my parents are dead (I'm 22), and which, given Congress's stellar track record with multi-decade projects, probably will not balance the budget in my lifetime, either. That's right: Rep. Ryan's grandma-killing budget is so conservative, it grows the national debt by (under the kindest assumptions!) $3 trillion over the next ten years (an average of $300 billion per year), and does not even contemplate surplus until the 2040s! Here are Mr. Ryan's own projections, from his proposal document:
The only amazing thing about the Ryan budget is that, by comparison to its monstrous alternatives, the so-called "Path to Prosperity" actually is a sharp turn in the direction of fiscal conservatism. The President, unsatisfied with the damage he's already done to our budgetary well-being, has proposed a budget so hilariously irresponsible it is difficult to believe he wishes to be re-elected.
Table S-15 of the President's budget proposal for Fiscal 2013-2022 reveals that he plans to trounce Mr. Ryan by adding $8 trillion to the deficit in the next ten years ($800 billion/yr) instead of Ryan's piddling $3 trillion ($300 bil/yr) -- and that vast hole in the budget is what's left after Mr. Obama raises taxes and imposes the many middle-class fines and fees related to the PPACA (aka Obamacare)! You may ask: when does the President plan to balance the budget, return to surplus, and begin paying down the debt? Is it sooner than Mr. Ryan's 2040 goal? The answer: Never! The President has literally no plan to ever stop spending more and more money out of Washington, regardless of our ability to pay for it, despite heavy tax increases, forever and ever! Here is chart 5-1 from that same budget plan -- remember, the budget plan produced by the White House with the most optimistic numbers the White House could muster:
For reference: Greece's debt stood at 125% of GDP when its economy collapsed. They now have 21% unemployment and rising, with no end in sight. The entire Greek economy, including all private sector spending, saving, imports, exports, and government action, is $300 billion -- less than half of what we spent just on the government stimulus in 2008.
So far, I've only discussed the two plans on their own terms, both of which are insane even on those terms. The picture becomes slightly worse when we factor in the less partisan analysis of the two plans by the Congressional Budget Office. Their analysis of the Ryan plan is here; their analysis of the Obama plan, here. The ten-year cost of the Ryan plan rises to $3.6 trillion ($360 billion/yr), and CBO estimates that, if Congress stuck to it perfectly for several decades, the budget would balance in the mid-2040s. The ten-year cost of the Obama plan sinks a titch, to $7.3 trillion ($730 billion/yr), and, on the CBO analysis, comes into balance even more slowly than the Administration's official plan -- which is to say, since the Obama plan doesn't balance until the end of time, the CBO analysis says the Obama plan balances sometime between the Second Coming and the Last Judgement. (Wouldn't it be entertaining if Peter Orszag suddenly ran out onto the plains of Megiddo during the final battle waving the U.S. Treasury's latest budget estimates? "It's a surplus! It's a surplus! Welcome back, 1990's prosperity!)
In short, we are doomed. Obviously, the Ryan plan is infinitely preferable to the Obama plan, because at least it still harbors the basic ambition of balancing the budget. And, yes, as the Wall Street Journal points out, it is fiscally more important to get the size of the annual deficit down to a percentage of GDP lower than annual GDP growth (or south of 3%), and the Ryan budget does manage to do that before ten years are up. I'll certainly support it as a step in the right direction.
Still, I'm reminded of the old moral conundrum from Catholic message boards: if a couple is having premarital sex, ought they contracept? After all, if you're going to commit a mortal sin, the argument goes, you may as well do it with as few secondary consequences as possible. If we're going to send ourselves to fiscal hell, we may as well do it with free health care.
I'm also reminded of the budget plan from Rep. Ron Paul (R-TX), which balances the budget in just three years. Now that's a brand of crazy I can get behind. Sadly, our feckless bipartisan leadership, led by a willfully and culpably blind American public, would rather fight the fire of debt with the fire of more debt -- instead of with plain old water.