Paul Ryan's math doesn't add up

Opinion: While throwing money at the nation's problems won't help, taking from the poor and giving to the rich would surely hurt even more.

By Jonathan Berr Aug 14, 2012 8:34AM
Paul Ryan, Mitt Romney's new vice presidential running mate, has insisted repeatedly that Americans need to have an adult conversation about the federal budget. Too bad the Wisconsin Republican hasn't taken his own advice.

Ryan's budget plan would, in the words of Robert Greenstein, the CEO of the Center for Budget and Policy Priorities, "produce the largest redistribution of income from the bottom to the top in modern U.S. history and likely increase poverty and inequality more than any other budget in recent times."

Through taxes, Ryan proposes to take from the very poor and give to the extremely wealthy on the theory that the benefits created from that would filter back to most people. The plan's short-sightedness is as remarkable as its Ryan's lack of specificity, according to Paul Krugman.

Ryan's spending plan would slash $1.4 trillion from nondefense discretionary programs, reducing aid to state and local governments to historic lows just as demands for services such as education and health care are rising. The Center for Budget and Policy Priorities estimates that states and local governments could lose nearly in $28 billion in 2014. Property taxes, which fund things like schools and trash pickup, would need to skyrocket to make up the difference. The increased burden could throttle the anemic 1.5% growth the economy has managed to generate.

Americans won't get more with less. Many are already getting less bang for their tax dollars as services in many communities have been cut to the bone since the start of the Great Recession. Data from the Bureau of Labor Statistics show that nearly 500,000 state and local government jobs have been lost since 2010.

Though I oppose Ryan's approach, I don't agree with the notion that spending money willy-nilly will make all of America's problems either. The sorry state of our nation's schools is proof of that fallacy, as is the health care crisis. People can't ignore the demographic challenges created by the growing numbers of retiring baby boomers. Ryan has called for replacing Medicare with a voucher program, an idea that the Center for Budget and Policy Priorities and other critics have claimed will ruin the popular government program. Interestingly, The Washington Post recently pointed out that the Social Security disability trust fund is due to run out of money in 2016, far sooner than the Social Security retirement program or Medicare. It's an issue that has been largely ignored.

"That will trigger a 21 percent cut in benefits to 11 million Americans -- people with disabilities, plus their spouses and children -- many of whom rely on the program to stay out of poverty," the paper says.

President Barack Obama isn't going to win re-election by arguing that his economic vision is more palatable than the Mitt Romney-Ryan alternative. Most Americans, who are muddling through their daily lives, want hope for a better tomorrow. Unfortunately, people are increasingly cynical about the ability of either party to deliver on such a promise.

Follow Jonathan Berr on Twitter @jdberr.

130Comments
Aug 15, 2012 11:05AM
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Tell me this, if trickle down economics works, why does corporate America have record profits, and trillions in cash tucked away, and employment is still lagging.  I'm an independent, and certainly see some merit in Paul Ryan at least having a plan.  However, small business owners are penalized or not supported as they should be.  Investment bankers and traders have very little to fear in the way of jail time, and day after day you hear of a new scam by one of them ripping off the avg joe who is supposed to invest in the stock market.  Corporate corruption would end if cameras from federal prisons were posted on Wall Street showing what would happen to white collar criminals that actually served real prison time being someones girlfriend!!  I've read 2.5 billion will be spent on the presidential election.  Ask yourself why, its a closed system with the rich making laws for the rich and protecting themselves.  By the way i'm a self-employed dairy farmer, not a fraud or put-on, i'm real in case you are wondering.
Aug 15, 2012 1:28AM
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Tell me again: Why do the job creators need more tax breaks?

Here's an idea, let's get more specific. SMALL BUSINESSES could use a bit of tax relief. But WEALTHY INDIVIDUALS who are not small businesses have already had a nice long break of Bush tax cuts.

If you're not creating JOBS and you don't have a business, it's time to pay up like the middle class folks do.

Aug 15, 2012 1:07AM
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It's unpatriotic to hide and hoard your money in offshore tax havens.

I thought the wealthy were the job creators? Isn't that the reason many Republicans claim the wealthy needed more tax breaks???.... But that money over in Switzerland and the Caribbean isn't creating any US jobs.

Aug 15, 2012 1:20AM
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Amazing!!! - some Conservatives say that people need to "grow-up" and "this is how it is, deal with it"

Do you really think that AFTER OUR GOVERNMENT AND POLICIES HAVE BEEN DILUTED BY BIG MONEY THROUGH LOBBYISTS, that "we the people" should just lay down and take MORE of this CRAP?!

You're in for a big surprise if you think people will just accept this or take any more of it!

Aug 17, 2012 2:40PM
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Good article.  Ryan was asked recently in a tv interview when his plan would balance the budget--he had no answer at all because his plan will not balance the budget ever.  I am an economist and Paul Ryan is not, and his plan does not pass the BS test for economics.

 

The problem is that a federal budget plan is also an economic plan for the country and that cutting government expenditures reduces GDP and reduces tax revenue.  Any of the major business or university macroeconomic models indicate Ryan plan puts the U.S. into a recession and maybe a depression.  First the federal government needs to boost domestic spending, and then in 4-5 years taxes can be raised on everybody, but particularly the richest people who largely do not spend what they receive.

 

The reality is that the federal government spending partly offsets the downside of our current systems that puts trillions of dollars into only the pockets of a few people and large corporations who do not spend or invest those funds.

Aug 16, 2012 9:38AM
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I wish the people in the media were smarter.
Aug 15, 2012 4:03PM
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I expect a lot of thumbs down, since no one likes to hear really bad news.

 

Neither the cons nor the libs tells it straight.The 40 years after WWII saw the US become dominant since it was the only industrial power not reduced to cinders.

 

Then came the 1970s, and the only way to maintain standard of living was to nearly double the workforce by getting women to work. Europe and Japan were back in shape.

 

Enter the 1980s and Reagan brought prosperity in the form of borrowing from the future on a much larger scale. Then in the 1990s, we continued borrowing from the future, but added in globalism and outsourcing with China and India, which has helped accelerate the decline in the American middle class. Factor in the commercial credit and housing borrowing, and the fake "New Economy" which has proven to be a failure.


In the early 2000's, it became obvious to me that the US was circling the drain. Too easy to export an American job. The glib response of "just retrain for a new career" is ridiculous considering how expensive education is in the US. The Bush-era Republicans went on a Democrat-level spending spree. Now you got Obama trying to outdo Bush.


The tab will come due for the US, just like for Europe, and after that, Europe and North America will once again be the backwaters of the world, just like they were in ancient and medieval times, when China and India both ruled the roost.

 

It is sad to say, but our few generations of Post-WWII prosperity was an anomaly, and things are going back to the old "normal".

Aug 15, 2012 11:38AM
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I think what the author meant was many people use the SS disability program to stay out of work, not out of proverty.
Aug 14, 2012 12:03PM
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Livin in CR? How about livin in delusionland. LETS SEE ROMNEY'S TAX RETURNS. DON'T TRY TO CHANGE THE SUBJECT. PUT UP OR SHUT UP!
Aug 15, 2012 1:39PM
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It doesn't make any difference if Obama or Romney is elected in November!  The National Debt is now  $16 Trillion and rising (that's TRILLION with a "T") and this year's  budget deficit is over $1.2 Trillion.  With this "do nothing"  Congress constantly wrangling with President Obama, who is  spending money "like a drunken sailor on leave", how will the U.S. ever attain physical responsibility?  Regretfully, I have a gut feeling that we may have reached "the point of no return". 
Aug 14, 2012 11:16PM
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YOU LIE GREY!!!!!!!!!
Are you ever going to say anything rational? Sober up buddy.

Aug 14, 2012 2:30PM
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If Ryans medicare plan becomes law, Mitt, instead of driving down the road with his dog, on top of the car, for sport, will tie a elderly person on the top of his car, for sport.
Aug 16, 2012 9:29AM
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Trickle down did not work in the past nor will it work in the future.  Ron Paul should be the Republican nominee and not Mitt.
Aug 15, 2012 11:07AM
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I intensely dislike the arm chair quarterback with no suggestions of his own. The Ryan plan is opposed to Federalism which places too much control with too few people. The reason the US operates as balance between States and Federal government is that centralizing society creates the real risk of authoritarianism. The States have been irresponsible with money (much like the Federal government) and lazy in terms of expecting the Federal government to hand out assistance. This entire process needs to be changed. We have too many government employees and too few private sector jobs (which are the only real sources of new revenue streams) Hand outs to the roughly half of Americans has been a dismal failure (see our balooning debt burden) and generally these people do not start new enterprises because they have limited resources. Coupled to the overwhelming government regulaton of business this leads to a very small pool of business generators. Reducing regulatory paperwork hurdles, creating an environment that fosters business creation (which is more than simply playing with taxes) and reducing the government job engine are good starting points to build a sustainable US for the future.

Aug 17, 2012 8:01AM
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very nice post.... 
Evidence of socialism? 
 
Evidence of destruction of capitalism? 
 
I suspect you have no evidence of either. Care to prove me wrong? 

Regards
___________ 
http://tinyurl.com/abacusfranchise
Aug 15, 2012 2:36PM
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In my first posting just awhile ago, I incorrectly used the word "physical" instead of "fiscal" when referring to "fiscal responsibility" (government revenue).
My thanks to TerryTate, who caught the mistake and notified me via "Replies" at the bottom of posting.  Thanks again, TerryTate.

Don Moore
Aug 17, 2012 12:51PM
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you might want to check out the source ( center for budget and policy priorities )  of this article.
Aug 15, 2012 11:32AM
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"will make all of America's problems either"

 

I don't understand what that means.

 

 

Aug 17, 2012 11:19AM
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To mkmkmk, It seems that many rich people also pay low or no income tax.
Aug 15, 2012 6:27PM
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Why no blow by blow analysis of Leroy's budget plan? Oh, that's right, he don't have one.
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