In May, 2012 I demonstrated what the US government takes out of a typical daily paycheck (if we got paid daily). Here is what that typical daily pay looks like when you incorporate the cost of healthcare under the current system in 2012:
Healthcare is a larger cost than taxes (with about $5 of the $32 in taxes being included in the total healthcare cost). This is my best guestimate after reading a ton of reports from OMB, CBO, Kaiser Family Foundation, and Paul Ryan’s own platform paper.
Under Paul Ryan’s budget plan:
Since the specifics are vague, imagine cutting out about half the tax boxes by 2050, and adding in a bunch more orange boxes, because his plan will not provide subsidies or healthcare to most people. He claims to be able to cut the debt down a lot but would (according to the US Office of Budget and Management) require curbing discretionary spending at 5% of GDP and military below 3% of GDP. Neither of these have been below 8% or 3% in any year since WWII, respectively. So his plan assumes unrealistic congressional self-discipline to work.
Under Obama’s budget plan:
- If you choose to opt out of Obamacare, shade in 0.3 of one box in red as a new annual tax.
- If you choose to opt in to Obamacare, remove 30 of the orange boxes. This is money you will save when healthcare meets capitalism. (~$5/day for healthcare)
Note, that if you who opt out could support a 20% cut in military spending, Obamacare would be paid for.
Contrasting the rhetoric in the competing documents (wonkuments?)
The Paul Ryan Manifesto, Path to Prosperity, can be summarized as having these major themes:
I contrast this document with the OMB summary of how this plan is likely to play out between 2012 and 2050:
What this shows is little overlap between OMB’s report and Ryan’s rhetoric. What they both discuss includes: taxes, federal government, state assistance, congress, budget, rates of economic growth, spending, debt, savings, and GDP.
Ryan focuses a lot more on the role of the president, bureaucrats, unaccountable, unelected, house republicans, complexity of the tax code, future reduction in borrowing, national defense, business creation, American families, job growth, tax rates, budget cuts, reforms, and ‘generations to come’.
OMB focuses on borrowing, tax deductions, authority, administration, local grants, state obligations, TARP subsidies, receipts, outlays, discretionary spending, estimates versus actuals, income, insurance, and projections.
I think this map is especially clear in showing how rhetoric diverges from the language used by OMB people, who try to provide as clear and accurate a picture of our future economy as possible. Paul Ryan replaces each of these words with a placated softer version. George Carlin would be impressed:
OMB vs Paul Ryan
- Taxpayers —> American families
- borrowing, net loans —> budget cuts and savings
- discretionary spending —> budget cuts and reform
- programs and appropriations —> economic growth and business creation
- outlays, receipts, debt, interest, income, tax —> tax, spending, debt, increases economy, complexity in tax code
- unemployment —> jobs
Some historical perspective
This is an OMB graph of real per-capita GDP, 1890 to 2010.