The How and Why of the Ryan Budget

[RandomVariable]

This is a work in progress. I would appreciate any feedback and/or corrections. Once this part is polished up a little I can start on the next part. All of this may be completely wrong or completely obvious. Given all the experts on the board I am sure I will get a good idea of which.

It is often stated, and correctly so, that the Ryan budget is aimed at the top 1%. So what is it about the Ryan budget that they like so much? The 1%, the ultra-wealthy, are above the captains of industry. The ultra-wealthy are above those whose job it is to create products and provide services. Goods and services which makes a profit and grows the company. They are even above most of the CEO's. These individuals masters of the world. For them the single greatest threat to their existence is the insolvency of the federal government. Is there an actual manifestation of this threat? Yes. The ballooning of entitlement programs. What would be the most effective way to ensure this threat is contained? A balanced budget. And this is what the Ryan budget puts as the highest priority, a priority above all else. The Ryan budget is designed to balance the budget in all possible haste. The Ryan budget attacks the problem using three separate elements of the federal budget: 1) tax reform, 2) entitlement reform, and 3) discretionary spending.

The first element of balancing the budget does not attempt to balance the budget directly. The belief is that by lowering the top tax rate companies will have more money to spend thereby growing their businesses and the economy will take off as it has done every other time the top tax rate has been cut. While this theory is flat wrong there is enough evidence which can be found by those looking for it to convince those already decided that they are correct. There is also the added benefit that the tax cuts will help the budget's audience pocket a little extra money in the process. The second element is the direct cutting of entitlement programs. This will not only attack the problem directly but it is believed that if one loses their government entitlements they will find a job rather than live off the government dole. The third element is the cutting of discretionary spending. While Rep. Ryan claims his budget does not cut discretionary spending he is only telling half of the story. There is the pesky problem that there is an approximately $49B unaccounted for in Ryan's budget. The budget also does not fund the transportation trust fund. What the Ryan budget does is basically throws a lump sum to the discretionary spending group and let them fight like dogs over the amount. The idea behind this is that this method will make the departments choose only the programs which are most valuable and cancel the rest. Also the reduced funds will force the departments to tighten their belts with all their spending because they have to make do with less. Comparing lump sum after the sequester and that which the Ryan budget proposes it is about a 24% cut.

A number of pieces of information I have come across lately has lead me to the belief that this is how, and why, of the Ryan budget. A comment by Rep. Cole was one of the most telling. He stated that while he was concerned with funding the transportation trust fund he was more concerned with Social Security and Medicare going bankrupt. One last element of the Ryan budget; Rep. Van Hollen has repeatedly asked Rep. Ryan how it is the Ryan budget completely repeals the ACA and yet keeps all the savings. As I have said before, the Republicans have absolutely no intention in repealing Obamacare and doing so is merely a campaign slogan. Then again a majority of the country is not going to accept a budget designed by and for the 1% without a little marketing thrown in.

 

[CrusaderFrank]

Unless we're overspending by $500B annually, we're killing the elderly

 

[RandomVariable]

Unless we're overspending by $500B annually, we're killing the elderly

If we manage to balance our budget in ten we will kill our country in 30.

 

[RandomVariable]

Given that my previous statement was submitted into the record by unanimous consent, well close enough . I move to my next submission. These are not complete statements by any means but a simple test of my logic and that arguing this point of view is appropriate in other posts.

The Times they are a Changing
There may be no better indicator that times are changing than the divergence of the two political parties in philosophy. The change is a structural change in the economy of the United States marked by a progressive increase in entitlement spending. How we address this change has two different propositions as reflected by the the budgets presented to Congress in recent weeks.
The Ones with Something to Lose
The one who have something to lose by the Presidents budget are the Republicans and they stand to gain by the Ryan budget. The ones who have something to gain by the Ryan budget are often referred to as the 1%ers. While this label might not be accurate I choose to use it here. The 1%ers have made their fortunes in a world where entitlements were much lower and growing slower than they are now. They point to studies to confirm their belief that this model has worked in the past and will continue to work in the future. These studies are flawed however in that while all the data used and the conclusions are logical coherent by leaving out indicators of change they produce an incomplete picture.
The Ones with Something to Gain
The ones who have something to gain by the President's budget and lose by the Ryan are the 47%ers. The 47%ers point to the increasing need for entitlements to support the growing inequality and poverty this country faces. They claim that by investing in the country today the returns will outweigh the costs incurred.
Two roads diverged in a wood
The evidence is strong on both sides, as is the power to argue one's philosophy. The realities on the ground show that the the status quo will not be sustainable going forward and was not even sustainable for the last two or three decades. Looking to others countries it is clear that other countries are using different models to much greater success that we with ours. Austerity was tried in Europe and many suggest that it was a much flawed policy. America must adapt to the new reality that greater entitlement spending is a natural evolution of an economy and to deny that, even try to go in the other direction, will only lead to an increasing rate of decent into a failed country.

But going back to the statement that some have something to lose by appropriately adapting to change just the opposite is true. A growing economy for the middle-class has always increased the wealth in all segments of the population.

One last word on the nature of this change. Both parties argue for a strong, modernized military. Anytime fundamental shifts happen on a global scale there are those who will fight those changes, quite literally. Whether conflicts have any relevance to the underlying economic struggles will matter not.

 

[ScreamingEagle]

It is often stated, and correctly so, that the Ryan budget is aimed at the top 1%.

Often stated....but essentially meaningless....

are the 1% the only ones concerned about our country going bankrupt...?
what is wrong with cutting spending to balance our budget in 10 years....?
what is wrong with creating jobs and getting people off the government dole...?
economic prosperity...?

on the other hand....what is the plan...?
keep people dependent....?
keep spending until the dollar dies...?
economic collapse...?