Spending is not the problem

Updated
source: budget.house.gov/uploadedfiles/spending_is_the_problem.pptx
source: budget.house.gov/uploadedfiles/spending_is_the_problem.pptx

The chart Rep. Paul Ryan, R-Wis., used on Meet The Press on Sunday got under my skin. It’s been widely debunked in the past 24 hours, but it’s still surprising how brazenly Ryan held up his totally improbable chart on national television. I’m not an expert (in fact my math skills are highly suspect), so I just want to talk about the basic logic behind Rep. Ryan’s plan.

If you believe Ryan’s chart, you believe projected tax revenue in this country won’t change at all for the next 28 years. Where will you be in 28 years from now? Will you make more money? Less? Even the conservative-leaning Heritage Foundation shows a massive change in projected revenue (also as a percentage of GDP) just in the next 7 years.

And what exactly are the “President’s Tax Increases”? Ryan doesn’t specify and neither does his chart. It looks like he’s assuming the “President’s Tax Increases” will remain the same for the next 28 years as well. The claim/calculation defies credulity when you consider how the Clinton-Era tax rates were higher than the Bush-Era tax rates and current tax rates are now higher for some people and lower for others. That’s a lot of change in the past 20 years. But Paul Ryan is showing us a chart with absolutely no changes in tax rates for the next 28 years.

Whether or not you believe his line on skyrocketing spending, the chart just doesn’t add up. And Ryan held this thing up during his first national interview since his failed run for vice president.

When pressed by Meet the Press host David Gregory on whether Republicans would be willing to agree for more revenue, even if it came from tax reform, Ryan adamantly said no. “Look, we’ve already done the revenue bit. And if you keep raising revenues you’re not going to get decent tax reform,” he said.

Reality check: As Pulitzer Prize winner and friend of the Ed Show David Cay Johnston points out, raising revenues and reforming the tax code, presumably to get rid of loopholes that benefit the wealthy, are not mutually exclusive. You can raise revenues and pass tax reforms.

Ryan goes on: “So if Mitt Romney and I won the election [the sequester cuts] would not have happened. You know why? Because we would have gone and worked with Democrats and Republicans in Congress to actually put the budget on a path to balance and we’d have saved defense.”

Right. Then, when you were done balancing the budget without cutting defense spending you would have leaped tall buildings in a single bound.

Here’s number 3: “Well, we can debate the efficacy of Keynesian economics or not. And I don’t obviously believe– I think the debt is pretty clear it doesn’t work,” he added.

Ryan saying that Keynesian economics doesn’t work is kind of like saying you reject Darwinism. You need to back that up if you’re planning to write legislation about it. You need to say more than, “it doesn’t work” and move on. There are probably some economists who agree with Paul Ryan about Keynesian economics. They might be able to actually explain their rejection of a complicated economic theory. But they aren’t in charge of writing a budget for the United States government. Rep. Paul Ryan rejecting Keynesian theory out of hand is like the top person at NASA saying the Theory of Relativity doesn’t work. Ryan is a member of Congress who is in charge of creating a budget that could affect the lives of millions of Americans from now until 2041.  He owes us a more thorough discussion.

Finally, I saved the best for last: ”

We’re not preaching austerity. We’re preaching growth and opportunity.”


Ryan is working on a budget that pays off the debt by 2023. In order to do that, he’ll have to trim roughly 22% of all federal spending. He’s already said he won’t touch defense spending. Everyone from the Congressional Budget Office to the Center for Budget and Policy Priorities to the calculator on your desktop says Ryan’s going to have to cut Social Security, Medicare and Medicaid to make the numbers work. He isn’t just preaching austerity (and look how well that worked in Europe), he’s going to cut the safety net. His more “generous” budget required deep cuts to federal workers’ pay and benefits, farm subsidies and Obamacare. And he’s going to do it while holding up a chart that makes no logical sense. Pulitzer Prize-winning journalist David Cay Johnston has repeatedly (and more eloquently) crunched these numbers.

“Paul Ryan actually believes what he said, which is patent nonsense  to anyone not under the spell if a dead novelist who regarded altruism as not a virtue, but a defect,” Johnston said.

Spending is not the problem

Updated