Paul Ryan: Flying in the Face of Math
Mar 28th, 2012 by Kimberly
Let me say first, my cat already hates this column.
I sat at my computer, ruminating over this week’s blogpost. I had decided to tackle Paul Ryan’s budget proposal, and some research was in order. Zoë (she likes the umlaut, I’m sure of it) crawled up on my lap and sat, purring her little kitty heart out as I absently stroked the top of her head. Petting a cat lowers your blood pressure. I’m not making this up – the State University of New York at Buffalo did a study on a group of stockbrokers. (Most stressed-out people on the planet? Check.) Turns out that owning a pet actually does a better job of controlling hypertension than the most-often prescribed medications.
Yet, even as I read Paul Ryan’s proposal from the comfort of my home, soaking in the feline love amidst my soothing sage green walls, I found myself crying out, “Why do you hate math? Why are you trying to kill it?” Yes, dear readers, I spoke in italics. I’m not proud of it, but it’s true.
Zoë stared up at me. You did not need to be a cat whisperer to read the expression on her face. Quit whining like that, or I will have to hurt you.
I didn’t blame her. I could hear the pitch of my own voice, and it wasn’t pretty. Fortunately, having a cat on your lap makes it more difficult to curl up into the fetal position, or I might just have given up and regressed into some nicer land where no one tries to tell you that zero plus negative one equals big money.
Mr. Ryan persists in trying to sell the nation on the idea that we can balance the budget by making cuts to Medicare and other federal social programs, shifting things like Medicaid and food stamps to the state level, and lowering taxes.
Look, I know lots of people don’t like math. All those numbers. Memories of an intimidating authority figure pointing out when somehow your calculations failed to reach the one and only correct answer. Story problems that ask you to figure out when two trains will pass each other, as though the people on the trains couldn’t just watch out the window for one another if they were really all that interested. Major psychological baggage involved. I get that.
Most of us, however, are not offering solutions to try to balance the federal budget. If you are going to tread those murky waters, you need to face math. You need to embrace it. Those numbers are not out to get you. They are not out to please you. They are what they are, and they tell you what you need to know.
Let’s take the first part of the budget proposal here: cutting Medicare. Oh, you will hear it spoken of in different ways, like “reshaping” Medicare or “reforming” Medicare, but let’s face facts. In order for changes of Medicare to be of any use to the budget discussion, it has to end up costing less. Something has to get cut. Yes, we all want it to be waste and inefficiency, but desiring to cut these things and quantifying them to actually end up with dollars in your hand are two very different things. The track record for cutting waste and having it benefit a budget is not good. The smart bet is that actual goods and/or services will have to be on the chopping block. If we cut Medicare, people have less access to health care. Less access to health care, particularly lower-cost preventive care, means people don’t see a doctor until they have a major problem, at which point it is more expensive to treat. Health care professionals don’t necessarily think preventive care is cost-saving (at least, according to the Robert Wood Johnson Foundation), but they do mostly agree that it’s cost-effective. (Interesting analysis here from a site called The Incidental Economist.) Bottom line: giving people access to good health care may not save you money, but it isn’t costing you money, either. Cutting Medicare, it would seem, will have no effect on our national bottom line.
Next up: shifting Medicaid, food stamps and other social programs to the budget of the states instead of the federal government. First off, the states bear up to half the burden of these programs already, according to the Center for Regulatory Effectiveness. (The actual rate varies, depending on the financial well-being of the state.) Okay, so the states are going to pay for all of it now. Most states are already facing their own deficit problems. (Check your rank at stateline.org.) Here in California, we don’t have a lot of extra cash to toss around at the moment. It will be a strain – perhaps “financial impossibility” might be the more realistic term – to pick up the slack for this program. Even according to former GOP Congressman Vin Weber (quoted here in the San Francisco Chronicle), “If we reduce the deficit at the federal level, it’s going to increase deficits at the state level.” What happens when states run out of money to meet the needs of their citizens? They apply to the federal government for help. In terms of the “moral challenge” (Mr. Ryan’s words, quoted here in the International Business Times) of cutting the deficit, I’m seeing a wash here too.
Last on the list, cutting taxes. How will this help our deficit? As far as I can tell, it won’t. Taking a pay cut rarely helps to pay your bills. In fact, according to the following graph from Demos.com, the Bush tax cuts are chief among the reasons we are in the fiduciary intensive care unit as it is.
[Author’s note: a friend explained to me the idea that if we lower business taxes, they will hire more people, thus creating new incomes which will be taxed, bringing in new revenue. I understand the principle, but this only seems to apply to cutting business taxes, not those of wealthy individuals, and even then, it assumes that the business will use the increased revenue to expand, which doesn’t always happen, at least according to this article from the Center for Budget and Policy Priorities.]
So, taking the whole thing together, Mr. Ryan’s proposal offers one thing that probably won’t affect the budget, one thing that will merely shift debt from the federal to the state level, and one thing that will decrease our ability to pay for things. A neutral, a neutral, and a negative, and somehow Mr. Ryan assures me that this will add up to a positive.
If someone can explain to me how these policies are intended to reduce the deficit, please tell me. Seriously. I’ll listen. I really am curious as to what the financial rationale for this is. From my current view, it just looks like you’re trying to make math do yoga.
I like math. I like yoga. But as was proved the day I had chocolate pudding after tuna fish, even things I like do not always go together.
Kimberly needs to stop thinking about this before she starts to grind her teeth at night – although at least if she did that, she’d have to pay her dentist for a mouthguard, and then someone would be making money out of the deal.
***Banging my head against desk. Too mad to formulate sentences. Banging head more***
OUCH! (on so many levels)
Wow Kim. Awesome research! I like pretty graphs, but I’m really disappointed that the effects from war spending and economic downturn don’t decrease in the next 6 years.
Agreed, ladies, on both points. Somehow not even pretty colors can reduce the pain.
Kim, if someone ever again tells you that if you cut taxes on a business, they will hire more people, you need to sic Zoë on them!! In reality, if you make a business pay less taxes, they will KEEP THE MONEY. It’s a thing called “Profit” and most businesses are very, very, VERY interested in this. They will NOT go find an unemployed person to give them the extra money.
The reason businesses hire more people is because they want to produce more product, which they can sell more of, which leads to more of this profit they love so much. I don’t understand why this is such a complicated concept for some folks. Or maybe it’s not complicated, and they are trying to make it more so? Hmm….
You, the Center for Budget and Policy Priorities & I are all in complete agreement on this point. Businesses exist to make a profit. Disposing of any extra money they get does not make a profit, hence I believe they will usually find a way to keep some of it. But I could be wrong.