Thursday, August 30, 2012

The Other Side of the Story: Ryan's Speech

People who balance their checkbook know it.
People who are bookkeepers and accountants know it.
Business owners and their finance people know it.
 But, apparently Ryan does not know it.

There are two sides to economic equation:  Debits and credits.

Last night, Paul Ryan talked exclusively about debits.  He's going to abolish "Obamacare."  He's going to decrease the rising cost of the Medicare program by raising the eligibility age to 67 and phasing in a voucher system.

This is not a discussion on the advisability of cutting or reforming these programs.  This is an observation that these represent what the government calls "spending cuts" and you and I call "less of an increase."

In a time when both parties seem to be emphasizing "Jobs, jobs, jobs,"wouldn't it be advisable to talk about pro growth measures, too?

What about the Romney Plan tax cuts?  His administration would propose a 20% reduction in marginal tax rates, and a 28%+ reduction in corporate tax rates. These supply-side, pro-growth measures are part of his plan and are aimed specifically to create jobs.

Are cuts more important that growth?

Every reputable economist agrees that the coming "fiscal cliff," where automatic draconian spending cuts coupled with tax increases will very likely result in a recession.  This is an area where Republicans, Democrats and Independents agree.  The strategy of cutting spending and raising taxes is unwise because it will depress growth.

Economic growth is the engine of job creation.  We all agree about that.

Why did Ryan fail to discuss the "credit" part of his pro-growth plan?

I'm puzzled.

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