Is the White House really attacking the Ryan plan for not balancing the budget fast enough?
By James Pethokoukis @ AEI (August 27, 2012)
No, no, no, he didn’t.
Please tell me White House spokesman Jay Carney didn’t attack Paul Ryan’s Path to Prosperity budget today for not balancing the budget fast enough, as White House reporter for Roll Call Steven Dennis tweeted.
Now it’s true that the Ryan budget would not balance until 2039. But that’s only because it uses the unrealistically slow growth numbers from the Congressional Budget Office. As I have written: ‘And those assumptions assume Ryan’s sweeping tax reform would have no impact on growth. But numerous academic studies — plus common sense — suggest it would. I can hear the screams from the left already: “Down with dynamic scoring.” But consider this: A much-respected 2001 study found that eliminating the current tax code’s bias against savings and capital could enlarge the economy by 5-9% over the long run. And a 2004 study by Young Lee of Korea’s Hanyang University and Roger Gordon of the University of California, San Diego, found that “increases in corporate tax rates lead to lower future growth rates within countries.” And there’s many more where those came from. Smart tax reform can boost growth and tax revenue[.]’
If we assume Ryan’s policies would produce faster GDP growth that was 0.5, 0.75, or 1.0 percentage point above CBO’s economic forecast for the decade, the budget would balance in 2019, 2021, or 2025.
But that’s not the real problem with what Carney said. Even using the gloomy CBO numbers, the Ryan budget would eventually balance and meanwhile run up trillions less in added debt than if we kept on the current path:
The real problem is that the Obama budget never balances, never brings down the debt, never bends the curve.
Never, never, never.