What's missing from this Paul Ryan chart on the U.S. national debt?

[yllus]

I admire Mr. Ryan's courage in unilaterally bringing forward policy proposals, even if they do tend to be sort of... nutty.

Business Insider - There's Something Huge Missing From This Paul Ryan Chart On The National Debt

Paul Ryan released his massive new budget plan today, and it includes this chart purporting to answer where our debt comes from.

The Y axis is the percent of GDP. And that black revenue line is the amount of money the government collects in taxes each year.

Can you see what is missing?

Defense.

In FY 2010 defense accounted for 4.7 of GDP. That's about 19 percent of the federal budget.

In fact, from being a defense budget cutter. Paul Ryan says he wants to stop the cuts to the Defense Department's budget. From his plan:

1. Prioritize Defense Spending to Keep America Safe

With American men and women in uniform currently engaged with a fierce enemy and dealing with emerging threats around the world, this budget takes several steps to ensure that national security remains government’s top priority.

Providing for the common defense: This budget rejects proposals to make thoughtless, across-*‐the-*‐board cuts in funding for national defense. Instead, it provides $554 billion for national defense spending, an amount that is consistent with America’s military goals and strategies. This budget preserves necessary defense spending to protect vital national interests today and ensures future real growth in defense spending to modernize the armed forces for the challenges of tomorrow.

Reprioritizing sequester savings to protect the nation’s security: The defense budget is slated to be cut by $55 billion, or 10 percent, in January of 2013 through the sequester mechanism enacted as part of the Budget Control Act of 2011.3 This reduction would be on top of the $487 billion in cuts over ten years proposed in President Obama’s budget. This budget eliminates these additional cuts in the defense budget by replacing them with other spending reductions. Spending restraint is critical, and defense spending needs to be executed with effectiveness and accountability. But government should take care to ensure that spending is prioritized according to the nation’s needs, not treated indiscriminately when it comes to making cuts. The nation has no higher priority than safeguarding the safety and liberty of its citizens from threats at home and abroad.

 

[BoberFett]

Defense is a good answer, but I was going to say interest on federal debt.

 

[Genx87]

Defense will get cut first. It doesnt change the rest of the chart. Medicare,SS,and Medicaid will simply swamp our federal budget.

 

[soundforbjt]

Notice, revenue has been going down since the late 90's.

 

[soundforbjt]

Defense will get cut first. It doesnt change the rest of the chart. Medicare,SS,and Medicaid will simply swamp our federal budget.

Doesn't look like SS is a big problem from that chart, looks pretty flat to me.

 

[Genx87]

Notice, revenue has been flat since the late 90's.

Revenue as a % of GDP has remained in a pretty predictable range for decades except during a recession.

 

[Genx87]

Doesn't look like SS is a big problem from that chart, looks pretty flat to me.

Is SS the only thing on the chart?

 

[Genx87]

Seriously, this forum software bug where posts are placed out of order is annoying.

 

[NeoV]

medicaid and SS don't really rise up much in these charts, the increase is all in medicare

is that dramatic increase in medicare due to the aging of the US population?

Why is the revenue projection completely flat as well?

How do you have this discussion without defense spending?

 

[Darwin333]

Notice, revenue has been going down since the late 90's.

Its barely south of historical norms (maybe 1/2 a percent or so). The absolute most we have ever been able to sustain for more than a year or two is roughly 20% of gdp.

So yes, we can slightly increase revenue but that is a rather small part of the solution.

 

[Dman8777]

Isn't SS paid for with it's own tax? Why does that get included at all?

 

[Genx87]

medicaid and SS don't really rise up much in these charts, the increase is all in medicare

is that dramatic increase in medicare due to the aging of the US population?

Why is the revenue projection completely flat as well?

How do you have this discussion without defense spending?

As a % of GDP that is a pretty good guesstimate on what we can expect to collect on an avg. It will dip and rise in any given time span.

I think at the very least this chart illustrates non-discretionary spending will consume all revenues given enough time to grow We could shrink defense spending to 0% of GDP and it wont balance the federal budget. One thing I dont notice from that chart is how much Obamacare and interest on our debt will consume over the next 40 years as a % of GDP.

 

[Darwin333]

medicaid and SS don't really rise up much in these charts, the increase is all in medicare

is that dramatic increase in medicare due to the aging of the US population?

Medical costs are rising at like 9% a year which is well above inflation and growth. Someone told me that the law of exponents doesn't apply to .gov spending, they were and are wrong.

Why is the revenue projection completely flat as well?

Because its a percentage of GDP and not an actual number. Dollar wise it will grow but as a percentage of GDP it will (and is usually a good idea for it to be) normally be flat.

How do you have this discussion without defense spending?

Good question, in my opinion you don't.

 

[Dulanic]

Main reason Medicare is getting to be a larger burden... healthcare costs. And until this country does something to address it, it will continue to grow. But republicans is repeal, repeal, repeal... oh and somewhere in there replace, they just don't know what with.

16% of our fucking GDP in healthcare... it's fucking insane. And that's years old, I'm sure with a updated value it's closer to 17% now.

Get healthcare costs addressed 1st and that has a direct impact on Medicare.

 

[Darwin333]

Isn't SS paid for with it's own tax? Why does that get included at all?

Because (I think as of 2010) it started costing more than it collected in taxes. It will continue to require more money than it has taken in until something is fixed. We might get a few year lull if the economy picks up but the ratio of people paying in versus people receiving benefits has been dropping for quite a while and is only going to get much worse.

In a nut shell: Our grandparents had more kids than we did.

 

[Dman8777]

Because (I think as of 2010) it started costing more than it collected in taxes. It will continue to require more money than it has taken in until something is fixed. We might get a few year lull if the economy picks up but the ratio of people paying in versus people receiving benefits has been dropping for quite a while and is only going to get much worse.

In a nut shell: Our grandparents had more kids than we did.

Is that because of population or because of the recession and high unemployment in 2010?

 

[Ausm]

You would never see the Rightist go after their sacred cash cow.

 

[Ausm]

Main reason Medicare is getting to be a larger burden... healthcare costs. And until this country does something to address it, it will continue to grow. But republicans is repeal, repeal, repeal... oh and somewhere in there replace, they just don't know what with.

16% of our fucking GDP in healthcare... it's fucking insane. And that's years old, I'm sure with a updated value it's closer to 17% now.

Get healthcare costs addressed 1st and that has a direct impact on Medicare.

Healthcare for profit is fucking insane...PERIOD.

 

[Darwin333]

Main reason Medicare is getting to be a larger burden... healthcare costs. And until this country does something to address it, it will continue to grow. But republicans is repeal, repeal, repeal... oh and somewhere in there replace, they just don't know what with.

16% of our fucking GDP in healthcare... it's fucking insane. And that's years old, I'm sure with a updated value it's closer to 17% now.

Get healthcare costs addressed 1st and that has a direct impact on Medicare.

A full 6% of that is Federal gov spending via Medicare and Medicaid (not including state contributions) which covers how much of the population? Thats more than 50% of what the other countries in your chart pay to cover their entire population.

 

[Darwin333]

Is that because of population or because of the recession and high unemployment in 2010?

The reason it happened sooner than expected was because of recession/unemployment. I forget what the exact date was but it was going to happen very soon anyway.

 

[Darwin333]

As a % of GDP that is a pretty good guesstimate on what we can expect to collect on an avg. It will dip and rise in any given time span.

I think at the very least this chart illustrates non-discretionary spending will consume all revenues given enough time to grow We could shrink defense spending to 0% of GDP and it wont balance the federal budget. One thing I dont notice from that chart is how much Obamacare and interest on our debt will consume over the next 40 years as a % of GDP.

It already does give or take a hundred billion or so.

 

[nonlnear]

Notice, revenue has been going down since the late 90's.

Also notice that there has apparently been a HUGE budget surplus since 1970 and we won't have a deficit until 2050-ish.

 

[woolfe9999]

Defense will get cut first. It doesnt change the rest of the chart. Medicare,SS,and Medicaid will simply swamp our federal budget.

Why lump the 3 together when you can see that the growth curve for Medicare is off the charts whereas the other two are pretty sustainable. Over-generalizing doesn't help the discussion.

If we're going to have a serious discussion about Medicare's sustainability, it starts with what is driving the curve. We all know what that is.

 

[FoBoT]

if no one wants to decide what to cut, cut it all, by 20%

oh wait, no on wants to cut anything. no worries, unlimited debt is good anyway, inflation will fix it for us

 

[Ausm]

Why lump the 3 together when you can see that the growth curve for Medicare is off the charts whereas the other two are pretty sustainable. Over-generalizing doesn't help the discussion.

If we're going to have a serious discussion about Medicare's sustainability, it starts with what is driving the curve. We all know what that is.

Yeah it's called Healthcare for Profit....