Free Markets, Free People


Ryan budget proposal: you can pay me now or you can really pay me a heck of a lot later (updated)

Problem:  As a nation we’re in dangerous debt territory.  If we don’t do something quickly and dramatically, we’re headed for some very rough and painful times.

But while it seems the American public senses this on the whole, polls seem to indicate that all the “free” stuff handed out by government is popular with a large percentage of the population.  Or said another way, they understand that we have a debt problem, they understand the implications of that problem and they don’t mind spending cuts – just so the spending cuts don’t effect programs they like.

The problem is further compounded by an irresponsible administration which gives the debt problem lip service but submits budgets that exponentially increase the problem:

The president’s recent budget proposal would accelerate America’s descent into a debt crisis. It doubles debt held by the public by the end of his first term and triples it by 2021. It imposes $1.5 trillion in new taxes, with spending that never falls below 23% of the economy. His budget permanently enlarges the size of government. It offers no reforms to save government health and retirement programs, and no leadership.

Both of these facts make it hard for those who would actually like to address the problem of debt before it overwhelms us.  That’s because they’ll really get no support politically from the administration, no call to arms and leadership, and the American people are proving to be fickle about the whole process sending very mixed signals.

Solution?

Well the obvious solution is to find some means of cutting spending to at least the level of revenue and to begin working to pay the debt down in an earnest and timely manner.  What isn’t a solution is business as usual but on steroids as proposed by the President.  So today, Rep. Paul Ryan (R-WI) introduced the GOP plan to address the problem.  Or at least part of the problem.  That of out-of-control spending and addressing the debt.  How it will play with the American people remains to be seen, but it is both an earnest and timely proposal.  It also makes some pretty dramatic cuts which is where you can expect to see the pushback.

For starters, it cuts $6.2 trillion in spending from the president’s budget over the next 10 years, reduces the debt as a percentage of the economy, and puts the nation on a path to actually pay off our national debt. Our proposal brings federal spending to below 20% of gross domestic product (GDP), consistent with the postwar average, and reduces deficits by $4.4 trillion.

But there’s pain in them thar words.  And it means things are going to have to be quite different in some areas than they are now.  Government is going to have to be rolled back.  That is unless we’re partial to a complete collapse of our economy and our currency, hyper inflation and all the good times those developments would bring.

So to specifics in Ryan’s proposal.  Addressing welfare in general, he says:

This budget will build upon the historic welfare reforms of the late 1990s by converting the federal share of Medicaid spending into a block grant that lets states create a range of options and gives Medicaid patients access to better care. It proposes similar reforms to the food-stamp program, ending the flawed incentive structure that rewards states for adding to the rolls. Finally, this budget recognizes that the best welfare program is one that ends with a job—it consolidates dozens of duplicative job-training programs into more accessible, accountable career scholarships that will better serve people looking for work.

As we strengthen and improve welfare programs for those who need them, we eliminate welfare for those who don’t. Our budget targets corporate welfare, starting by ending the conservatorship of Fannie Mae and Freddie Mac that is costing taxpayers hundreds of billions of dollars. It gets rid of the permanent Wall Street bailout authority that Congress created last year. And it rolls back expensive handouts for uncompetitive sources of energy, calling instead for a free and open marketplace for energy development, innovation and exploration.

I am quite pleased to see the second paragraph.  It is indeed time to eliminate “corporate welfare” and subsidies for favored industries.  It also takes on what we would call traditional welfare.  And make no mistake about it Medicaid and food stamps are welfare.    As for the “perverse incentives” Ryan points too, here’s what they’ve yielded recently:

Snap 1

I’m sure some of that comes with the economic downturn, but it also indicates the effect of the incentives to sign people up for the welfare program.

We can’t afford the level of welfare we’re paying out now – and that included corporate welfare and subsidies.  We are a compassionate people, but I end up shaking my head when I hear government officials claiming that people at “4 times the poverty level” need help?  Really?  So what’s the purpose of the poverty level as a measure and why are we now convinced we have to “help” people well above that level?

Then there are the twin third rails of politics, but areas where dramatic reforms are absolutely necessary to get us on the right fiscal track as a country.  And those are Medicare and Social Security.  The Ryan plan:

Health and retirement security: This budget’s reforms will protect health and retirement security. This starts with saving Medicare. The open-ended, blank-check nature of the Medicare subsidy threatens the solvency of this critical program and creates inexcusable levels of waste. This budget takes action where others have ducked. But because government should not force people to reorganize their lives, its reforms will not affect those in or near retirement in any way.

Starting in 2022, new Medicare beneficiaries will be enrolled in the same kind of health-care program that members of Congress enjoy. Future Medicare recipients will be able to choose a plan that works best for them from a list of guaranteed coverage options. This is not a voucher program but rather a premium-support model. A Medicare premium-support payment would be paid, by Medicare, to the plan chosen by the beneficiary, subsidizing its cost.

In addition, Medicare will provide increased assistance for lower- income beneficiaries and those with greater health risks. Reform that empowers individuals—with more help for the poor and the sick—will guarantee that Medicare can fulfill the promise of health security for America’s seniors.

I’ve already seen some on the left characterizing this as "privatizing" Medicare. And, of course, as we all know, that’s dangerous as government always does it better – look at the budgets for example. Look at the debt.

In fact, what Ryan is talking about is giving seniors a choice vs. automatically enrolling them in a government insurance program that averages about $60 billion a year in waste, fraud and abuse.  There will be a subsidy – probably means tested.  Is the the ideal libertarian answer?  No.  But as I’ve said before, freedom is choice and any legislation that expands that is at least a step in the right direction. 

We must also reform Social Security to prevent severe cuts to future benefits. This budget forces policy makers to work together to enact common-sense reforms. The goal of this proposal is to save Social Security for current retirees and strengthen it for future generations by building upon ideas offered by the president’s bipartisan fiscal commission.

Perhaps raise the caps (I gave a certain percentage to my 401k regardless of how much I earned, so doing the same with Social Security doesn’t really bother me.  And it will provide increased revenue for the fund.  Again, ideal?  No, but then I don’t consider either Medicare or Social Security to be “welfare” since most participants have paid into those systems for their entire working life.   But there are changes which will have to be made.  I don’t favor means testing if the cap is raised.  But I do think that a hard look at the retirement age is necessary.  My ideal outcome, obviously, would be getting government out of the retirement income business, but that’s not going to happen.  So Social Security has to be made self-supporting and not a drain on the budget – as does Medicare.

Budget enforcement: This budget recognizes that it is not enough to change how much government spends. We must also change how government spends. It proposes budget-process reforms—including real, enforceable caps on spending—to make sure government spends and taxes only as much as it needs to fulfill its constitutionally prescribed roles.

If we don’t get some restrictions on government spending, nothing is going to change.  Nothing.  We’ve watched Congress talk the talk for decades, ala Nancy PAYGO Pelosi.  But they ignore their own legislation and policy at will.   As Ryan says, there have to be “real, enforceable caps on spending”.  I interpret that as “you cannot and will not spend more than you take in”.  We’ll see how the Congress interprets that.

Tax reform: This budget would focus on growth by reforming the nation’s outdated tax code, consolidating brackets, lowering tax rates, and assuming top individual and corporate rates of 25%. It maintains a revenue-neutral approach by clearing out a burdensome tangle of deductions and loopholes that distort economic activity and leave some corporations paying no income taxes at all.

Here is something that is going to be as hard to do as entitlement reform.  Why?  Because the tax system provides Congress with another way to wield its power.  But the way it has wielded this power has done precisely what Rep. Ryan points too here – it has “distort[ed] economic activity.”  Make the system simple, remove the loopholes, broaden the base (get some more “skin” in the game from those who now don’t pay taxes) and my guess is you’ll not only see an increase in revenue, but a far greater increase in economic activity.

Bottom line:  We are in a “you can pay me now or you can pay me later” moment.  And if we wait, we’re going to be paying a price we’re just not willing to pay, all because we chose to avoid the pain now.   I’m sure the opponents of this proposal are going to call it “extreme” and something that will “hurt the children”.  Trust me, if you want to see extreme, put it off until this house of cards collapses.  And if you want to avoid “hurting the children”, man up and face the pain now to avoid it later when it really will “hurt the children”.

UPDATE: Chris Edwards at CATO gives his take on the Ryan budget.  I’m pretty much agreed with everything Edwards says:

  • Ryan doesn’t provide specific Social Security cuts, instead proposing a budget mechanism to force Congress to take action on the program. It is disappointing that his plan doesn’t include common sense reforms such raising the retirement age.
  • Ryan finds modest Medicare savings in the short term, but the big savings occur beyond 10 years when his “premium support” reform is fully implemented. I would rather see Ryan’s Medicare reforms kick in sooner, which after all are designed to improve quality and efficiency in the health care system.
  • Ryan adopts Obama’s proposed defense (security) savings, but larger cuts are called for. After all, defense spending has doubled over the last decade, even excluding the costs of wars in Iraq and Afghanistan.
  • Ryan includes modest cuts to nonsecurity discretionary spending. Larger cuts are needed, including termination of entire agencies. See DownsizingGovernment.org.
  • Ryan makes substantial cuts to other entitlements, such as farm subsidies. Bravo!
  • Ryan would turn Medicaid and food stamps into block grants. That is an excellent direction for reform, and it would allow Congress to steadily reduce spending and ultimately devolve these programs to the states.
  • Ryan would repeal the costly 2010 health care law. Bravo!

Here’s a chart Edwards includes in his post:

201104_blog_edwards52

 

I’m a huge supporter of military spending in order to maintain our national security and technological edge, but I find it hard to believe that there aren’t many places where savings could be accrued in “Security”.  And I’d also note under the broad “Security” umbrella fall many other programs that could be cut – like the entire TSA.  But, in any event, it is an area that should also be looked at with an eye for cutting spending.  It would get us to our goal of paying down the debt even sooner and it can be done without jeopardizing our security (cut costs not capability).

UPDATE II:  Geoff over at Ace of Spades gives a little context to the Ryan proposal:

PublicDebtRyanvsCommissionSmall

 

Now, where I come from, the “extremes” are on either side of a situation, right?

~McQ

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58 Responses to Ryan budget proposal: you can pay me now or you can really pay me a heck of a lot later (updated)

  • Or said another way, they understand that we have a debt problem, they understand the implications of that problem and they don’t mind spending cuts – just so the spending cuts don’t effect programs they like.

    No doubt there are those who think this way. But I think there’s another group that goes through the following reasoning:

    1. We’ve got too much spending and debt, and we need to cut it.

    2. If I don’t stand up for my own goodies, they’ll be the ones cut. So I’ll bear the brunt of the cuts while those other parasites don’t.

    3. So I’m for cutting in general, but I need to defend my own programs lest they be the only ones cut.

    I don’t know how big this group might be. I’d love to see some research to find out.

    If it’s of any size, that suggests a strategem for the GOP: Lump lots of cuts together. Don’t piecemeal it; go large.

    That also has the advantage of diffusing the message of those against the cuts. If only one program is being cut, the soft-headed types in the media will focus in on the supposed pain and suffering caused by loss of that program. But it there are a bunch getting cut, it’s hard to know which one, and even if they find a good one to focus on, it’s no worse than the blather about cutting a single program. So the opposition gets no stronger, while advocates for cutting would hopefully be more motivated to back something doing a host of major cuts.

    • Yep. Its sounds mighty callous when its just cuts to NPR. When there are cuts to a host of things, including say F-35 jet engines, what can the progressives say?

  • The Republicans should make a very public commitment to the Ryan Plan. In short, this is a hill we will die on. And they need to do it with the Senators. I think this is a huge opportunity for the tea party organizations and allied groups. Make strong public commitments to support Congressmen and Senators who support the Ryan plan and work hard against Congressmen and (especially) Senators who don’t support the plan. Offense not defense.
    One thing I think people underestimate is the likely impact of not growing the national debt. Sure it’s a huge number but growing the economy, Reaganism not green eye shade old style Taftism, is the solution. The economy will grow over time and if we stop borrowing money hand over fist, the debt as a percentage of national wealth will decline.

    • Oh, I think they don’t have to make a full-on charge yet. Just point to the plan whenever the media claims they aren’t serious and remind people that we have a plan when Obama says they don’t.

  • The progressives are upset that the introduction of this plan was called “courageous” but “politically stupid”.
    Unfortunately, the alternative seems to be that we should have wished that the passengers on United 93 hadn’t been so heroic.

  • Just a few thoughts on the term “corporate welfare”. In my view, distinctions need to be made when discussing it.
    Say that a company makes a pre-tax profit in a free and open market by selling products that consumers genuinely value. (Petroleum might be an example.) If the taxing arm of the government allows the petroleum producer to keep a larger share of their own profits, I don’t consider that “welfare”. After all, the extra money that the corporation keeps is money that they’ve rightfully earned in a free system by providing valuable goods to consumers in exchange for their money. (If the government takes less of what I’ve rightfully earned, they aren’t “giving” me anything!)
    Say that another company produces a product which would not be economically viable in a free and open market, but is made viable by a government-mandated transfer of wealth from citizens to the company. (Corn ethanol might be an example.) This is a case that can properly be called “corporate welfare” because the viability of the product relies on the force of government. In a free and open market, this product might not exist, or if it did exist, it would be produced at a much smaller volume than currently.
    In summary, when a company gets to keep more of the earnings that it has rightfully made by selling valuable products in a free and open market, that is not corporate welfare.
    But when a company’s profit (or even its existence) depends on the force of government because its product line wouldn’t be economically viable without the force of government, then that can legitimately be called “corporate welfare”.
    —Tom Nally, New Orleans

    • I’m with you in general, but it’s not always easy to see what would be viable in the open market absent government interference.

      Subsidies are clearly bad. I can’t think of a case where the tendency to game the system didn’t predominate over the supposed benefits.

      Tax credits are harder to judge. Is a tax credit for oil shale extraction a de facto subsidy or not?

      How about tax credits for research into space-based industries? We don’t really know if the result will be free-market viable for a while.

      I’d prefer a flax rate of tax on profits, as low as possible, and let the market sort it all out. No tax credits, subsidies, whatever. I think the simplicity of that approach yields a better system than trying to draw lines on who gets tax breaks.

      • The crap the Collective tells people about “subsidies” respecting oil companies usually involves depletion allowances, which are analogous to depreciation and other types of tax off-sets common in business.
        There should be no tax on business.  Period.

      • If after making a flat tax system, you still wanted to fund certain things, you could do so by just cutting checks instead of offering tax credits.
        Call them “Public Subsidies” to make it very clear – tax credits sounds too nice. That way its also clear its spending not “less revenue” or whatever.
        Keep it away from the tax system and make it very transparent.

    • I came across a story about some scientists who worked in the rarefied field of permanent magnets.
      As part of the “green initiatives,” they applied for some research grants but lost out to GE, who had no program when they filed.  Since the group of scientists in this field were so small and often talked among themselves, one of the losers asked one of the GE scientist how they got it.  He replied that initially, their application was rejected, but thanks to the ability of the chairman of the review committee, they were awarded the grant anyway.
      This is corporate welfare.

      • Then they went and hired the other scientists that had been their competitors…LOL.

    • “In summary, when a company gets to keep more of the earnings that it has rightfully made by selling valuable products in a free and open market, that is not corporate welfare.”
      Suppose that the government is spending the optimal amount on things that everyone agrees are necessary (e.g. defense), and that tax rates are the minimum level consistent with that level of spending, incorporating dynamic incentive effects due to lower tax rates.  (That tax rate must be greater than zero if the government spends anything).  Awarding a tax credit to the oil company, but not to other companies, in that situation will mean is not merely allowing them to keep more of their rightfully earned profits, but it would require more revenue to be raised from other companies that have rightfully earned their profits.
      Whether you call that corporate welfare, wealth redistribution, or whatever, it is a distortion of the market and a wealth transfer.

    • Let’s start from basics:
      Generally, there is no such thing as a “corporate tax”.  The corporation (or other business form) merely acts as an unpaid collector for a tax that falls on consumers.
      The idea that a tax credit or deduction is a “subsidy” is a Collectivist lie.  It assumes that the money we or our businesses make is theirs fundamentally.
      A subsidy, such as a grant, IS a positive transfer of tax money to a private entity.  The recent…and scandalous…funding for the execrable Machete from Texas is an example.
      Other forms of subsidy are price supports like we see for many ag products.  They keep the price to producers artificially high, which induces over-production (surplus).
      At the free market level, the way to address all these tangled distortions is to simply do away with all business taxes AND to make any transfer of government funds to private producers ILLEGAL (except where government purchases stuff).

  • Tell you what, I give Ryan a LOT of credit here.  I’ve said it plenty – like or hate it, at least this guy is out with a pretty substantial plan.  WHich is going to be dissected and demonized and distorted and used as a bludgeon against Ryan in whatever way the Dems (and RINOS) find possible.

    But his plan is still 100% more than the BS anyone else has laid out.  We know the Dems plan – to raise taxes.  Period.  Nothing will be cut by them, not even cowboy poetry.  And the old guard GOP acts like brave Sir Robin the second the word “entitlement” is thrown around.

    It seems like everything is on the table for this proposal.  Lets just take the medicine and get it over with

    • Also, they need to be very clear that “Its a plan. Its not written in stone. If you have a good idea, either a Republican or Democrat, we are open to discussion.”
      This is what you do when some journo pulls up “cancer research for baby giraffes” or whatever.

  • “I’m sure some of that comes with the economic downturn, but it also indicates the effect of the incentives to sign people up for the welfare program.”
    It makes a big difference what amount the some, in “some of that”, is.  I think there are different interpretations of 5% vs 95%.
    I would make two observations.
    1. If people want to game the system now, presumably they would have wanted to gain the system prior to the start of the chart.  That is hard to reconcile with what looks like a pretty substantial positive second derivative starting in Jan 2007.  Obviously more historical data would partially disambiguate, at the risk of ignoring other factors that have been changing over the past few years (e.g. aging population, jobs outsourced to other countries etc).
    2. If we look at food stamps as primarily an insurance program against adversity that is funded by taxes by everybody in good times, then it is *not* welfare, any more than my payments to a life insurance company when I’m alive are welfare, or their payments to my beneficiary when I die are welfare.

     

    • It has nothing to do with “gaming the system”. It has much to do with incentives provided to increase the rolls of food stamp recipients. I thought that was clear in the post.

      Secondly, it is welfare – unless you can point to where someone who has paid in for what they’re taking out. 50% of the citizenry of this country don’t pay taxes – and a large proportion of those would be found within the population receiving food stamps. You can attempt to apply any euphemism for it you like, but when it comes down to brass tacks, it’s welfare.

      • 50% of the citizenry of this country don’t pay taxes

        That many people pay no sales taxes? They pay no state income taxes? They pay no Social Security taxes? Who are they cause it sounds like a great deal. :)

        • SS is not suppose to be used to fund food stamps. And now that SS has a negative cashflow it no longer be considered that way regardless.
          And that was the only source of federal funding you listed.

        • See EITC and get back with me.

          • And how does that jibe with the statement “50% of the citizenry don’t pay taxes”. At face value that means they pay NO taxes at all – Social Security, local, state, sales, etc. We all know that statement is not correct.
            50% don’t pay Federal Income Taxes is most likely the correct way to describe the situation.
            Well, unless you’re GE. :)

          • If you receive a cash payment (EITC) that actually negates what you may have paid in those taxes, what would you call it?

          • I did.
            From the IRS:
            For tax year 2010, the maximum EIC for a person or couple without qualifying children is $457, with one qualifying child is $3,050, with two qualifying children is $5,036, and with three or more qualifying children is $5,666.
            Gee that’s hardly a fortune that would enable people to live on. Wow. We must stomp this out; please ignore GE not paying taxes though.
            And I still see jack about anyone who works NOT paying sales, SS, Medicare, state, local, etc, taxes.  

          • Social Security isn’t a tax per se (nor is Medicare). Both are payments for a future guaranteed benefit.

            So, if you make $30,000 a year with a “qualifying child”, you’d have to pay 11% in state and local taxes to “pay taxes”. Considering most sales taxes are 5% or so and we don’t spend all of our income on things that are taxed at that rate (11%) or any rate (rent?), yeah, I’d say those getting EIC aren’t paying any net taxes.

      • I get your point about incentives, but the point is that a bad economy is precisely the sort of situation that a social insurance program like food stamps is supposed to cover.  So even in an Ayn Rand paradise, people might choose to pool their risk by setting up a sort of private food stamps program, and in the downturn, people would sign up to receive the benefits that they had presumably paid into before.  As long as the average contribution exceeds the average payout, it is not welfare.
        As to pointing to someone who has been on food stamps for a short period, but has otherwise worked productively for most of their life and hence would be a net contributor, I know a couple of people in that category, and I believe even Joe the Plumber meets that requirement.

        • It is one thing to provide a safety net for those who need it. It is another to keep moving the qualifications for the program lower and lower (2x poverty rate? 3x poverty rate?) and then actively trying to recruit those in the new range whether they really need the help or not, and getting rewarded for doing so, wouldn’t you agree?

          • Yes, absolutely, which is why I made the point about what percentage of the increase in food stamp participation was due to the pure insurance aspect (which would be a mechanical function of the economic downturn) versus, say, moving the qualifications, which changes the incentives, and which is a function of on-the-fly politics.

             

          • All you have to do is figure out when they began. The “on-the-fly” politics, that is. Hint: 111th Congress. Result: See the chart.

    • “If we look at food stamps as primarily an insurance program …”

      You can look at it as anything you want, but it is still welfare, not insurance. Insurance already has a definition, and food stamps don’t fit it. Invent your own word.

    • Smart people who have jobs that keep them busy don’t think about gaming the system. Make them unemployed for 12 months, and I bet some decide that its not a bad idea, especially as they probably truly had to use the programs for some period. Once you start realizing how many are out there, the numbers don’t look so bad.

  • Everyone wants to reduce the deficit, but noone wants to cut spending. It reminds me of that old joke, everybody wants to get to heaven but nobody wants to die.

    • Long ago…decades…I knew that one thing I would leave my children and grandchildren would be to abstain from taking the benefits I have a right to under our current “entitlement” regime.  It is a small enough thing.

  • I find it troubling that every year they roll out budget proposals that have their ‘success’ dates out 10 to 15 years.

    Every year.

    Think about that.

    We do have to start somewhere, do it now, do it fast, and the devil take the hindmost.  Now or later.

    • The problem is the entitlements that people have “planned their lives around.”

      • As opposed to taking more cash to hand out to others from my pay check, which, trust me, I’ve planned my life around.

        Everybody has plans for their money, whether it comes from Hollerith card shaped checks with the US Treasury seal on them, or whether it comes as tips from scooping vanilla at Mom & Pops Ice-cream and condom emporium.

        I’m not in a very forgiving mood about the whole thing right now.  You may have noted my attitude with my devil take the hindmost comment.

  • By the time it gets “compromised” away it will look more like the Obama proposal, but well, you have to start somewhere I suppose.

  • Ryan would turn Medicaid and food stamps into block grants. That is an excellent direction for reform, and it would allow Congress to steadily reduce spending and ultimately devolve these programs to the states.

    Where they bloody well belong.  For one thing, there is nothing in the Constitution that allows Uncle Sugar to get into the charity racket.  For another, the various states have different needs / desires when it comes to this sort of charity, so a “one size fits all” strategy seems wasteful.  Finally, why should No. Carolina pay for the deadbeats in California?

    Ryan adopts Obama’s proposed defense (security) savings, but larger cuts are called for. After all, defense spending has doubled over the last decade, even excluding the costs of wars in Iraq and Afghanistan.

    The budget has reached a point where even I am willing to consider some cuts.  I suggest that a complete, top-to-bottom review is in order, starting with the fundamental question of who we think we may have to fight and how we plan to fight them.  So much of our military is based on “we’ve been doing it this way for years”, and that leads to waste and inefficiency.  I’d rather have a smaller but absolutely first-class military than a bloated, every-member-of-Congress-gets-something-for-his-district monstrosity.

    Ryan includes modest cuts to nonsecurity discretionary spending. Larger cuts are needed, including termination of entire agencies. See DownsizingGovernment.org.

    Start with Depts. of Education, Veteran’s Affairs, HUD, HHS, Energy, and Homeland Security.  Fold the alphabet soup of federal law enforcement agencies into one agency (either FBI or US Marshals).  Ditto the various intelligence agencies.  For that matter, eliminate DoD and instead go back to just the service depts, which worked well for nearly 160 years.

    Ryan makes substantial cuts to other entitlements, such as farm subsidies. Bravo!

    “Substantial cuts” my a**: eliminate them entirely.  Uncle Sugar has no business picking economic winners and losers or proping up various industries so that Senator Twiddle or Congressman Foghorn can continue to effectively buy votes with the money.

    How long before Ryan becomes the butt of many jokes on Saturday Night Live and otherwise becomes The Most Hated (and stupid) Man in America?

    I just hope that Boehner, McConnell, and the rest of the GOP leadership stand behind him.  As Steve C. says, this should be the hill they are willing to die on.

    • How long before Ryan becomes the butt of many jokes on Saturday Night Live and otherwise becomes The Most Hated (and stupid) Man in America?

      >>>> You mean Scott WalkerfurhervonHitler will have competition?  There’s some good news then :)

      • Who will be “The Most Hated Man in America” after the crap hits the fan?

    • Sessions certainly fired – hell, not over the bow…he aimed for the mainmast in his statement about the President’s budget.

      I hope we don’t have to test Obama’s draft plan not to pay the military.    Little weasel.

  • The problem with cutting budgets is that they grow back whereas when you eliminate entire departments, there is nothing to grow back.

  • Oh my. You all want to support the GOP when it kills grandma.

  • In a time when TAO and the Dems ran up $7Trillion in four years, what’s the big deal about cutting $4trillion in TEN YEARS?
    Then, too, the projections are based on GNP rising 3.5-4% a year? Wanna buy a bridge?

    • Which projections show GNP rising 3.5-4% a year? Was it Ryan’s? Or the Feds? Or both?

      The plan has some good ideas. Most likely about half of this will pass in some form, probably watered down, and perhaps delay the day of reckoning. I don’t think either party really wants to get serious about tax and entitlement reform.

      • Which projections show GNP rising 3.5-4% a year? Was it Ryan’s? Or the Feds? Or both?

        Both, although Ryan would have to use the original Obama numbers for a proper comparison.

  • I’m confused, why are we cheering about more poor people without health care coverage? Won’t that mean I have to see more of them at the emergency room?

    • The car’s headed towards the cliff edge. It’s not the time to worry about whether there’s a knock in the engine.

      Or do you just not perceive the cliff edge coming? Fall 2008 wasn’t obvious enough for you?

  • Ryan has a plan and will be savaged for it because it is a solid plan.

    Ryan is too young to know this but I went through four years of buying my own toilet paper, etc. because the Headquarters Marine Corps had long practiced the dicta of returning 25% percent of its annual budget. The House and Senate loved it because it gave them money to play with while I carried a 60mm mortar that had parts dating to before the Korean war.

    Think of the bump the armed services would get. That said, I’m not foolish enough to think that DHS/TSA are going to have an ounce of shame. Certainly, Pelosi and Reid would still valiantly protect the under-privileged, seniors and homeless vets.

    The point is, folks know how to cleave entire chunks of their budgets to insure institutional survival.

    The GOP has a plan, the Dems have cowboy poetry. And Obama has a golf appointment.

    Positively laconic.
     

  • The flaw with this plan is that it requires essentially the same people who created the deficit, to adhere to the plan for 15 years just to keep us slightly above the 2010 level?

    Something that drawn out, will be thrown out eventually.  Even the Soviets Bureaucracy realized this and hence the 5 year plan initiatives.  Because anything longer than that dies on the vine.

    I’m not saying that it can be done in 5 years.  But it looks like the debt elimination glide-path looks about 75 years with a slope of about 1%/year.  Supposedly that would pick up the pace.

    But even at 1/3 that time span, the year over year improvements are so small that it would be easy to find excuses to skip this year’s improvement.  Natural disasters, a war in whatchamacallitstan, wallstreet failing at making money on money again and needing a bailout, ad infinitum.

    I question if this would make year 5 without be neutered completely.

  • I agree with jpm100 about one potential flaw in this plan. Another is how the flat tax is enforced. Rich types will game the system and just keep “income” etc offshore and pay no tax at all. A flat tax would work as long as it is assessed on all income regardless of the source or which Cayman Islands mailbox it’s hiding in.

    • That’s always the flaw in any plan. Obviously it has to be executed as passed. And I don’t disagree with jpm’s point. But understanding that doesn’t mean it shouldn’t be attempted.

    • Its not as easy as you think to keep “income” offshore, or people would already be doing that. Foreign banks that want any US presence end up cooperating with the IRS, and use of credit cards from offshore is a huge red flag, too. I guess they could fly out and physically carry cash, but no more than $10,000 or you have to report it.

      • “or people would already be doing that.” in which case the flat tax is no worse than the present situation. In fact with a lower tax, people would bring it in to use it most likely, rather than waiting for a tax amnesty or whatever.

      • I’m positive those with the means and connections could find a way. *shrug* I guess it is easier for the gov’t to deal with even Swiss banks, though.

    • AH, right,  the old “it’ll never work” defense.  Right up there with the 10 years to get any oil from wells drilled now plan.

      Yep, the current plan is sooooo much better.  Hey, pass me that deck chair will you, it looks better over here now that the water is rising across the shuffleboard area…..