The Worst Part of Paul Ryan's Budget

Even if you like Ryan's Medicare and Medicaid reforms, his budget is essentially a plan to demolish every other government program outside of Social Security and defense

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Reuters

Paul Ryan's budget takes us back to 1950. That's not a metaphor. That's a statistic.

When the CBO projected Ryan's plan four decades into the future, it concluded that the size of government would shrink to 15% of the economy by 2050. How small is 15%? As a share of GDP, it would be the smallest government since 1950/'51. Here's Ryan's proposed 2050 budget and our real 1950 budget, side by side. The Y axis is percent-share of GDP.

Screen Shot 2012-03-21 at 2.30.24 PM.pngOn the one hand, these governments are basically the same size, as a share of the economy. On the other hand, they are also completely different governments. In 1950, Medicare didn't exist, Medicaid didn't exist, and Social Security was 3% the size of defense spending. Today, those three programs account for practically of the projected growth in government spending. This graph makes the difference even starker. Again, the Y axis is percent-share of GDP.

Screen Shot 2012-03-21 at 2.27.59 PM.png

I want to direct your attention to the "All Else" category on the far right. This section includes all defense spending and other programs like unemployment insurance, the department of education, and the FBI. Even more than Medicare and Medicaid reforms, this might be the most controversial part of the Ryan plan.

In Ryan's 2050 budget, the "All Else" category shrinks to 3.75% of GDP. How small is 3.75%? Let's put it this way: Mitt Romney has proposed defense spending at 4% of GDP ... and defense spending makes up only about half of this category! Ryan's own ten-year projection doesn't let defense spending fall below 3%. It's unlikely he wants it to fall much further. That would leave 0.75% of GDP to do everything else.

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Today, 0.75% of GDP is about $100 billion. That is about as much as we spend on education and vocational training in the discretionary budget, as Michael Linden of the Center for American Progress pointed out. Imagine if everything else disappeared. It would leave nothing for infrastructure. Nothing for unemployment insurance. Nothing for food stamps. Nothing for border patrol. Nothing for the FDA, FAA, or FBI. Nothing for research and development. Nothing, even, to pay people to work in government! Do you think it's important to support our veterans with health care, education, and retirement security? Sorry. Veterans programs currently cost more than 1% of our GDP. There would be no room.

It's not just the next decade, where Ryan would cut 40 percent from transportation, 40 percent from education and training, 30 percent from "income security" programs for the poor, and 24 percent from veterans, as Brad Plumer pointed out. It's that his long-term budget, if you project forward defense spending, would cut 91 percent from these and all other non-defense programs. Ninety-one percent.

In order to pretend that the U.S. government can wear its 1950s-era girdle, you have no choice but to either dismantle government-paid health care, or else cut the rest of government with such draconian verve that we're forced to let our highways rot, while the unemployed go bankrupt and our veterans go homeless. Voters don't want that. Republicans don't want that. I don't think Paul Ryan wants that. But that's the future that he has written. Deficit reduction isn't easy. When you insist on doing it without raising tax revenue, it gets much harder.

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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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