(CORRECTION: This post originally compared Paul Ryan's statements in today's Wall Street Journal with the numbers in his 2013 budget proposal. When compared with Ryan's budget proposal for 2014, which he released today, Ryan's assertions in the Journal are correct. Bloomberg View regrets the error.)
Writing in today's Wall Street Journal, Representative Paul Ryan says his budget plan would eliminate federal deficits by 2023. His proposal, he says, would reduce federal spending and balance the budget without raising taxes.
"Our budget matches spending with income," Ryan writes. "Under our proposal, the government spends no more than it collects in revenue."
The Ryan plan would also end the Affordable Care Act, although you have to wonder if he has forgotten who controls the White House and Senate; make the U.S. energy independent, a goal that's economically sound only if domestic energy is cheaper; reform welfare by giving states flexibility to cut health-care and nutrition spending on the poor; and reform the tax code, which everyone claims to want until it gets to specific loopholes and breaks.
According to Ryan, these changes would lower the rate of annual government spending growth to 3.4 percent from today's 5 percent. Budget deficits will disappear, he says, because the U.S. economy will expand at some unspecified faster rate than outlays.
Based on Congressional Budget Office estimates, gross domestic product growth will average about 4.8 percent during the next decade. Assuming Ryan's budget ever goes anywhere and doesn't tank growth if it does, then his argument might hold up.
Even if government spending growth stays at 5 percent, the projected rise in GDP and stabilizing of spending growth will go a long way toward reducing budget deficits.
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