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.