The Ryan Plan

As I have pointed out before, a bipartisan group of ten former CEA chairs (including your humble blog host) has endorsed the Bowles-Simpson commission report as a starting point for dealing with the long-run fiscal imbalance.  So readers might like to know that Bowles and Simpson themselves have called the Ryan plan a positive step.

If you want to learn more about the Ryan plan, you can look at this side-by-side comparison of two plans or read this CBO report. 

CBO makes clear that it believes there are substantial budgetary savings in the Ryan plan, but to a large extent these are because "the government’s contribution [to Medicare] would grow more slowly than health care costs, leaving more for beneficiaries to pay."  Many on the left view such a change in entitlements as too draconian, but they have not offered a real alternative.  If they did, it would have to include substantial, broad-based tax increases, which those on the right would view as draconian.

That is, the choice we face is between historically high taxes (the left's unspoken preference) and a fundamental rethinking of the social safety net (such as the plan proposed by Congressman Ryan).