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Friday, April 22, 2011

Paul Ryan Claims His Budget Will Pay Off Debt

I picked up Paul Ryan's two page "Summary of the Fiscal Year 2012 Budget resolution" flyer at the listening session he hosted in Janesville and finally had a chance to read it. It's loaded with all the usual "keep taxes low" "reduces deficits" "creates jobs" "unleashes prosperity" and of course "repeals the new health care law" keywords that the congressman rattles off during his press interviews.

In one section of the summary he dedicates to setting the record straight, he calls any suggestions that he is privatizing Social Security and/or Medicare OR cutting taxes for the rich "myths." Oooo-kay.

But we know it is a fact that Ryan's tax plan involves lowering individual and corporate taxes to a permanently "loopholed" tax rate. Is that out of context? I don't think so. Yet Ryan claims his tax cuts are not a net tax cut - instead he claims it is revenue neutral reform to make our economy more competitive. His exact words. Got that? But here's the part in his budget summary that I believe deserves a second look. Under a section fictitiously titled "Key Facts" is this...

Reduces deficits by $4.4 trillion compared to the President's budget over the next decade.
Puts the budget on the path to balance and pays off the debt.

I did not add the emphasis to "pays off," that is how it appeared in Ryan's flyer. So, Ryan says his budget will pay off the national debt, which is over $14 trillion and growing. To stop borrowing and start paying off that debt, at some point the government would have to start collecting more money than it spends. It would have to start producing surpluses. In plain English, Ryan's "Path To Prosperity" would have to start pulling wealth out from the American economy and out of worker's pockets. When taxes are too high, that's how surpluses are produced - at least according to our last "conservative" president.

"Today our high taxes fund a surplus. Some say that growing federal surplus means Washington has more money to spend. But they've got it backwards. The surplus is not the government's money; the surplus is the people's money." -- George W. Bush, Aug. 4, 2000

So accordingly, the first sign that you've been taxed too much is when the government can produce a surplus. Yet Ryan proposes to pay off the debt, which even with a modest annual surplus of say, $200 billion a year - would take 70 consecutive years to pay it off - without interest! But most of Ryan's 2012 budget summary is built to produce results in a ten year window which means Ryan's "path" must pay for government AND collect $1.4 trillion extra EACH YEAR from U.S. taxpayers for ten straight years - and do it all with historically low tax rates. Utterly impossible if not totally destructive to the nation's economy.

Even taking the more conservative 70 year route, how would that massive and continuous confiscation of private capital and wealth by government - never to be returned - help create prosperity for individuals?

You don't want to know what happened after the last time our country had a decade of annual surpluses - do you?

More On Budget Surpluses here.

Ryan Says "We Do Tax The Top" - Constituents Disagree


Democurmudgeon said...

It happened before too, when Thompson returned tax surplus', like Bush.

We can only assume then that when we do have tax surpluses again, they'll return them to taxpayers, instead of paying down debt or paying our bills.

Lou Kaye said...

I just can't imagine in this "I earned it, it's mine, paying taxes should be a choice and each man for himself" tea bagging society, that those right-wing nutters (Ryan included) would encourage and allow the government to collect excess wealth by pulling trillions out of private pockets to pay down the debt. Obama tries to pull just a few more pennies out and they scream "redistribution."

Brielle Franklin said...

A lot of people are in the same boat unfortunately. I have seen so many of those "sell your structured settlement" ad's and I actually decided to try it. Thankfully I am no longer in the same boat as Ryan is. Interesting article though.

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