There's Something You Should Know About Paul Ryan's Balanced Budget Claim ...

This week, Rep. Paul Ryan introduced a new “Path To Prosperity” that would see medicare get basically privatized, taxes cut, and the budget balanced.

The nut is this chart, which shows how quickly the debt would be paid off under his scheme vs. the current trajectory.


Anyway, the green looks pretty nice! Paying off our debt by 2050? Not bad.

Now he says that the “source” is the CBO, so does this mean that the Congressional Budget Office really concluded that his path would do this?

Not quite.

Menzie Chinn explains:

The CBO provides some numbers (it’s not a “score”), with a caveat:

At the request of the Chairman of the House Budget Committee, Congressman Paul Ryan, the Congressional Budget Office (CBO) has calculated the long-term budgetary impact of paths for federal revenues and spending specified by the Chairman and his staff. The calculations presented here represent CBO’s assessment of how the specified paths would alter the trajectories of federal debt, revenues, spending, and economic output relative to the trajectories under two scenarios that CBO has analysed previously. Those calculations do not represent a cost estimate for legislation or an analysis of the effects of any given policies. In particular, CBO has not considered whether the specified paths are consistent with the policy proposals or budget figures released today by Chairman Ryan as part of his proposed budget resolution.

In other words (as stressed by Ezra Klein), Representative Ryan specified revenues and expenditures, and told CBO to calculate how the debt trajectory would change as a consequence. Thus, CBO did not “score” the plan, exactly because so much was unspecified.

LOL. So basically Ryan told them that his scheme will generating amazing growth and tax revenue, and thus it was just a matter of the CBO then determining what debt-to-GDP would be in such a scenario.

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