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The
‘Path
to Prosperity Budget’ is Quite Moderate
by Robert
Maynard
March 27,2012
As most are
aware of by now, Paul Ryan has introduced a budget proposal entitled
“The Path
to Prosperity Budget“. This proposal has been demonized by the left and
deemed
to be “unfair” by the Obama Administration. The argument is that the
proposal
is too radical and goes too far in cutting the budget. I would like to
make the
opposite case.
There is a
good argument to be made that, given the fact our total national debt
is now at
$15,578,846,265,361.84, the proposal does not go far enough. At a time
when we
have a federal debt approaching $16 trillion, with a total gross
domestic
product of just over $15 trillion, a radical solution is in order. We
now are
at the point where our total national federal debt surpasses our total
annual
income. That does not even factor in unfunded liabilities.
When
compared to the magnitude of the challenge we face, the Ryan budget is
actually
quite moderate. It only appears (to some) to be radical because almost
everyone
else in Washington D.C. is “whistling past the graveyard.” This case is
made
quite well in a Cato Institute piece by Chris Edwards entitled “Paul
Ryan’s
Spending Plan.” Here some of the supposedly radical plan’s highlights:
Total
federal outlays would fall from $3,624 billion this year to $3,530
billion next
year. Those figures are $24 billion less than under President Obama’s
budget
this year and $187 billion next year.
Of the $187
billion savings compared to Obama next year, $38 billion would come
from
discretionary programs, $146 billion from so-called entitlements, and
$3
billion from interest costs.
Ryan’s
proposed spending in 2022 of $4,888 billion would be a modest 13
percent less
than Obama’s proposed spending that year. That’s a useful statistic to
remember
when you read the inevitable stories about how Ryan would slash, burn,
and
pillage the government safety net.
Indeed,
Ryan’s proposed increase in federal spending from $3,624 billion this
year to
$4,888 by 2022 represents fairly robust annual average growth of three
percent.
As a share of
GDP, the Ryan budget would trim outlays from 23.4 percent this year to
19.8
percent by 2022. That reduction would simply get spending back to
around the
normal historical level. And note that spending would still be higher
than the
18.2 percent achieved in the last two years under President Clinton.
Compare
that with Edwards’ own plan put forward a year ago. Here is the essence
of his
proposal:
Policymakers
should implement an emergency plan of cuts to defense, domestic, and
entitlement programs. This essay proposes spending cuts of more than $1
trillion annually by 2021, which would balance the budget without
resorting to
damaging tax increases. Federal spending would be reduced to 18.0
percent of
gross domestic product by 2021 under the plan, which compares to
President
Obama’s projected spending that year of 24.2 percent of GDP.
Keep in
mind that even this more radical proposal brings the budget into
balance only
by 2021. That means another nine years of adding to an already enormous
debt.
That is nine years before we can even think about beginning to actually
start
paying off the debt. Yet this is a proposal that is even more “radical”
than
the much maligned Ryan proposal. Folks, we are going to be in serious
trouble
if we do not wake up.
In 2009
Time Business section ran an article entitled “Will the U.S. Sell
Assets As the
British Government Did?“ Perhaps a combination of adopting Mr.
Edwards’s budget
proposal and the suggestions in this article might start to get us out
of the
hole we have dug. At the very least, we should pass the Ryan budget.
Alas, given
what passes for political leadership in Washington D.C., I am not
holding my
breath.
Source:
FamilySecurityMatters.org
Related
articles:
Ryan to
Obama: I’ll See Your Budget and Raise You $5.3T in Cuts
First
Reactions to Ryan’s Path to Prosperity Budget
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