The Grand Old Party of Debt

Seems like all the buzz the other morning (totally different in the afternoon, but hey, it’s the news cycle) was about this report from the Committee for a Responsible Federal Budget which shows that all of the GOP candidate’s debt plans actually results in more debt:

The graph is via Derek Thompson, who also writes this:

Today, public debt is equal to about 70% of our economy. If Congress allowed current law to play itself out, the Bush tax cuts would expire and that number would fall to about 60%, according to various estimates. That’s pretty stable. But nobody wants the “current law” scenario to play out. Not Congress, not the Senate, not the White House, and certainly not the Republican field. So we need another plan. Problem is, most of the other plans don’t get us anywhere near stability. In fact, the GOP plans would raise our debt burden to anywhere between 67% and a whopping 126% of the economy by 2021, according to CRFB.

The report itself it pretty top-notch, and features a veritable who’s who on budget wonkery (Alice Rivlen, Simpson & Bowles, etc). Their methodology looks good and their assumptions are based off of some “realistic” baselines that I consider, well, realistic:

Essentially, they’re running off assumptions that all the Bush era tax cuts are extended, the Alternative Minimum Tax is patched, the “Doc Fix” (or SGR) is continuously patched, the personnel drawdown in Iraq/Afghanistan continues on schedule and most of the sequester cuts (from the August “debt deal”) are waived. All in all, a pretty good assumption of what’s going to happen.

More graphs!

Figure 1: Debt by Candidate as Percent of GDP (intermediate-debt scenario)

Yup.

Things I find interesting:

  • First Graph: The only Republican candidate to reduce the debt as a percent of GDP below the “intermediate debt scenario” is Ron Paul.
  • Second Graph: BUT! They all (including Ron Paul for freaks sake!) continue to run annual budget deficits.

Of course all the usual caveats apply – all of the candidate plans lack the details of, say, President Obama’s budget, and can be difficult to score to the final penny. But this is what the information tells us: all of the GOP plans as presented now would raise the debt to GDP ratio compared to the present and all of the GOP plans would run annual deficits for the next ten years.

I’ll leave you with another part of Thompson’s analysis, because this seems to be the best way to put it all together:

These plans don’t accidentally raise the deficit. They just don’t care about the deficit. Deficit reduction isn’t hard to do, arithmetically. You raise taxes over time. You control discretionary spending. You clear the way for health care cost innovation while introducing policies that will limit health care in the future. It’s not rocket science, it’s math. The hard stuff is getting Congress to agree to your math. But how is that supposed to happen if pols refuse to do even the basic addition and subtraction when it’s just them and a blank sheet of paper? What does it say about a party that believes “deficit reduction” is a worthy phrase, but not a worthy goal?

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