There will be loads to dissect in the budget plan Paul Ryan releases Tuesday, which I’ll start doing in my column for Wednesday. But for fiscal fetishists looking for a jump on what will doubtless be weeks of (exciting!) analysis, there’s one number you should watch: At what percent of gross domestic product does Ryan believe the federal government should operate?
On Sunday Ryan said his plan would offer such a number, but he wouldn’t say what it was. The Bowles-Simpson Commission said 21 percent, which I criticized here and here as way too low. Remember, Ronald Reagan ran government at 22 percent of GDP, back when America’s population was much younger, and we weren’t about to double the number of seniors on Social Security and Medicare. Obama’s budget has Uncle Sam on a glide path to between 22 and 23 percent of GDP after hitting a record-high 25 percent because of the economic collapse and resulting stimulus measures. In a column for Fortune magazine in 2005, I said the Democrat’ “secret number” — what government should run at to fund both the retiring boomers and also unmet nonelderly needs like R&D, education and infrastructure — was probably closer to 28 percent. (In our $15 trillion economy, 1 percent of GDP means about $150 billion a year in spending. So the stakes are very high).
I’ll be looking at this number, as well as the year Ryan says the budget should be balanced (or whether, as in his “road map,” he puts actual balance off for half a century), and the amount of debt Ryan adds along the way. I also expect to defend some of his proposals against predictable demagoguery from the left — if ever we needed a third-party sensibility to navigate between the charades both sides will be peddling, now’s the time. Meanwhile, Ryan will pretend we can address our fiscal woes without any tax increases, which is preposterous.
More soon — but as the budget equivalent of March Madness begins (is this April Madness?), those are early thoughts to chew on until we see Ryan’s plan tomorrow.