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Home Publications Blogs Beat the Press Paul Ryan and the Which Way Is Up Speech

Paul Ryan and the Which Way Is Up Speech

Wednesday, 29 August 2012 22:10

Most of the media have been doing fluff pieces on Representative Ryan ever since he was announced as Governor Romney's pick for his VP candidate. (My favorite is this Post piece which waxes eloquently on his use of the word "baseline.") Just in case any reporters decide to do any real reporting, I'd suggest they try taking issue with his account of the crushing debt burden that we are passing on to our children.

Representative Ryan seems impressed by big numbers (i.e. trillions), but seems to have difficulty with simple concepts. If we look at the ratio of our interest burden as share of GDP, it is close to 1.5 percent. This is near its low point for the post-war era.



                                Source: Congressional Budget Office.

In other words, instead of having a burden that is at a record high, the interest burden that we are now facing is near a post-war low. How can a budget wonk be so far from reality?

In fact, if we factor in the $80 billion in interest earnings that the Fed is refunding to the Treasury each year, the net interest burden is only about 1.0 percent of GDP, its lowest level since World War II.

There is one other item that should have caught the attention of reporters. Ryan hyped the fact that one of the major rating agencies downgraded the debt of the U.S. government. (The other two did not.) However the financial markets have been willing to lend the United States trillions of dollars at the lowest interest rate since World War II.

What sort of Ayn Rand follower takes the judgement of the bureaucrats and accountants in a credit-rating agency over the views of millions of investors putting trillions of dollars of their own money on the line? Let's face it, Ryan is a wuss.

Comments (4)Add Comment
written by James, August 30, 2012 12:06
Wuss? Don't know but surely a politician who works for billionaires such as Pete Peterson. One simply can look at who benefits from his policy - the trail of money.

Are all the convetion attendees who applauded and worshiped 1%?

Who are the people watching from skyboxes or Ritz Carlton or Four Seasons? They must be laughing while sipping a champagne.
When Ideology Trumps Reason With Conspiracy, Even Markets Are Irrelevant
written by Last Mover, August 30, 2012 5:48
What sort of Ayn Rand follower takes the judgement of the bureaucrats and accountants in a credit-rating agency over the views of millions of investors putting trillions of dollars of their own money on the line?

The same kind that warn the economic sky is falling from the first day in their life they heard the words freedom, tax and debt. It makes no difference what the markets they claim to believe in are actually doing.

If Paul Ryan predicted weather the way he predicts economic outcomes, during hurricanes, tornadoes and droughts he would predict it's going to get worse. During clear and sunny weather with adequate rain for crops, he would predict this can't go on and there will be hurricanes, tornadoes and drought.

It's obviously a conspiracy, so facts and evidence are trumped by motives and intentions to which Ryan has unique access over and above that available to millions of investors who will bite the dust and rue the day they ignored Ryan.
Not part of the solution, too busy being part of the problem
written by Matt, August 30, 2012 10:38
More importantly, how can any self-respecting politician cite the credit downgrade while being a major part of the *reason* the downgrade occurred. Truly "killing your parents and then pleading for mercy as an orphan"-level territory.
written by Widgetmaker, August 30, 2012 1:12
"Let's face it, Ryan is a wuss".

Ha! I refrain from commenting on ad hominem attacks, but this, coming from such a respectable source, was too funny to pass up. Thanks for keeping it real, Dr Baker. These sold out pols, who think they're talking tough by neglecting infrastructure spending and cutting services to the most needy members of our society, while while further cutting taxes and feathering the nests of the wealthiest, who need it the least, deserve such an epithet. Amen!
God bless you, Dr Baker, and keep up the good work.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.