"Ryan's Hope" - as told by Peter SchiffSubmitted by bytejockey on Sat, 08/18/2012 - 09:22
If enacted today, the Ryan budget would so drastically upend the fiscal picture that the U.S. federal budget would come into balance in just... wait for it.... 27 years! This is because the Ryan budget doesn't actually cut anything. At no point in Ryan's decades long budget timeline does he ever suggest that the government spend less than it had the year before. He doesn't touch a penny in current Social Security or Medicare outlays, nor in the bloated defense budget. His apocalypse inducing departure comes from trying to limit the rate of increase in federal spending to "just" 3.1% annually.
In fact, among his other overly-optimistic assumptions are that the unemployment rate falls to 4% by 2015 and an unprecedented 2.8% by 2021, another real estate boom begins almost immediately, and there is an average inflation and ten-year treasury rate for the next ten years of 2.04 and 4.15 respectively. These are assumptions that would make even the most rabid economic cheerleaders sit on their pompoms. Despite these pollyannish economic growth and record low unemployment projections, Ryan still assumes interest rates will remain near historic lows and that none of the cheap money showered onto the economy will ever find its way into the CPI. In other words, it's the economic equivalent of winning the lottery twice in a row while failing to account for the higher taxes that accompany such good fortune.