Tuesday, August 14, 2012

Paul Ryan's plan for medicare

Since being named as Mitt Romney's running mate, much has been made about Paul Ryan's plan to drastically alter the way Medicare works.

While I think his plan is flawed, it is much better than the Democrats' alternative which is to pretend there is no problem. Medicare is a major driver of our national debt, and must be reformed if we want to restore fiscal sanity to our nation, and preserve Medicare for future generations.

At the same time, most of the gains in spending cuts that Paul Ryan proposes in his budget are offset by tax cuts, many of them to the wealthiest Americans. Despite being hailed a budget guru, Ryan's plans are less about bringing spending in line with revenue, and more about a conservative ideology which wants to starve government and cut taxes.

He doesn’t propose any changes to Social Security, and refuses to cut any military spending. He says his tax cuts are offset by closing tax loopholes (something I wholeheartedly support), but won’t venture to say which specific beloved loopholes need to go.

Most economists would argue that we need both revenue increases and spending cuts from just about every area, including the military to balance the budget. But the budget is a medium term problem. Right now we are stuck in a period of slow growth, and cuts like Ryan proposes, could damage our fragile recovery. Many sensible economic thinkers believe we need another period of government spending (stimulus) to jump start the economy coupled with real plans to cut long term spending to control our deficit.

Of course, no Democrat in government has been brave enough to propose anything like this at the national level. They would rather just attack Ryan’s budget.

Ryan’s plan might be flawed right-wing ideology, but it’s better than nothing—which is precisely what the Democrats are offering.

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