Paul Ryan's Arithmetic: Addition by Subtraction


Republicans faced mockery in the last few years for inventing their own words. Rep. Paul Ryan did them one better. He invented his own math.

An hour after its birth, his budget was hailed as a messianic manifesto and a national disgrace. It saves Medicare and it kills Medicare. It fortifies our safety net with steel wire and demolishes our welfare state with a blunt wrecking ball. It somehow reduces financial support for typical families and allegedly raises their wages by $1,000 in ten years.

Ryan's budget is a jambalaya of controversy because it relies on an arithmetic formula that is, to say the least, controversial. Ryanism's DNA is the faith that removing government from the economy is addition by subtraction.

Addition-by-subtraction lives at the heart of Ryan's budget, particularly his health care plans. Ryan proposes to cure health care inflation by capping Medicare payments to beneficiaries at $15,000. How will that help a senior pay for medical expenses that exceed $15,000? It won't. That's the point. Ryan hopes that peeling government away from heath care will force seniors to make smarter and more frugal medical decisions, which will bring down costs for everybody.

Or consider Medicaid, where Washington splits the tab for the poor, elderly and disabled with states. Even with federal assistance, states find they can't cover their sick. Do they need more money? No, Ryan says, they need less money. He wants to end the tab-splitting and have the government simply cut a smaller check that states can spend however they like. Ryan says his reforms "lets states create a range of options and gives Medicaid patients access to better care." But consider the formula: Less state Medicaid spending + less government Medicaid spending = Better care? That only works in a world where you believe in insurance, doctors and pharma's ability to make up in efficiency what they've lost in money. It only works in a world where addition by subtraction works.

The Congressional Budget Office projects that spending cuts reduce job growth in the near term. Ryan respectfully disagrees. He predicts we can create 300,000-400,000 private sector jobs each month (almost double our best month in the last three years) over the next five years by announcing the country's most audacious spending cut plan in history.

Ryan relies on an arithmetic philosophy that all our nation's problems can be solved by asking Washington to spend less. There is little here about shifting government spending toward investments, using government's size to direct research in sciences and energy, or pulling back on defense to free up savings for the disadvantaged. I'd prefer a deficit plan that didn't see every minus as a plus.

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Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

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