Monday, March 26, 2012

Comparing budget plans

Keith Hennessey has a series comparing the budget plans of Rep. Ryan and President Obama.  The latest installment compares both to the plan proposed in 2010 by the President's own deficit reduction commission (Bowles-Simpson).  The Ryan and Bowles-Simpson plans have a lot in common, but also differ significantly in some ways.  In short, both plans include dramatic tax reform with lower rates and few deductions; the Ryan plan is revenue-neutral while Bowles-Simpson increases revenue; and both reform entitlements, but in different ways.  It would be great for the country if the debate was about these two serious plans.

But these are not the two plans we are debating.  Instead we have the president's plan, which includes tax deform (higher rates with more deductions) and leaves entitlements on their path toward fiscal disaster.  Here's the most telling illustration of the path our president wants the economy travel along: