Paul Ryan and His Critics

From the Wall Street Journal:

One point of a document as subversive as Paul Ryan’s 2012 budget is to provoke debate, and has it ever. But amid the thoughtful musings about starving orphans and grandma in a snowbank, could his critics at least get their facts right?

Let’s unpack the distortions.

• Deficits and debt. Perhaps the most bizarre complaint is that Mr. Ryan’s blueprint would worsen the U.S. fiscal imbalance compared to current law. So the House Budget Chairman has proposed supposedly hideous cuts to popular entitlements at great political risk for . . . the fun of it?

Federal deficits have increased 259% over the last three years and the Ryan budget starts to repair the damage. It would bring next year’s deficit below $1 trillion, down from estimates of roughly $1.6 trillion for 2011. The false claim that Mr. Ryan would increase deficits and debt seems to be based on a Congressional Budget Office baseline that assumes $4 trillion in new taxes will land after 2012 with the expiration of all the Bush-era tax rates, that the Alternative Minimum Tax will apply to the middle class, and that Medicare physician payments will fall 20% next year.

No one thinks that baseline is at all realistic, least of all President Obama, so the right comparison is with Mr. Obama’s 2012 budget. Mr. Ryan proposes smaller deficits for the next 10 years, falling to 1.6% of GDP in 2021 versus 4.9% for the White House. According to CBO, debt held by the public falls to 67.5% of the economy a decade from now from about 69% today, while it rises to 87.4% in Mr. Obama’s version.

Read the rest here.

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