I find Jim Pethokoukis of the American Enterprise Institute to be one of the most consistently insightful and thoughtful free-market, limited-government economics writers around. So I was surprised that two of his five "economic heroes" advocate unsustainable spending policies for the United States. His list touts, among others, Erskine Bowles and Alan Simpson's financial plan and Rep. Paul Ryan (R-Wis.):
The co-chairmen of President Obama's National Commission on Fiscal Responsibility and Reform put the lie to the idea that government must inexorably and massively grow in coming decades. Their long-term budget plan capped spending at 21 percent of GDP, far below the minimum level many on the left think necessary to adequately fund the old-fashioned entitlement system and needed government "investments." …
Just as Ronald Reagan did in the '80s, Ryan is shaping the debate today about what kind of government America will have for the next generation and beyond. So in that sense, it's not just his policy proposals that matter but also his arguments. No U.S. public figure is as effective at reminding us how America became America, at reminding us of all that once was good, and what could be again. Free men pursuing happiness in free markets.
Pethokoukis studs his praise of Bowles-Simpson with some "to be sures" and other reservations, but the plain fact of the matter is that their plan is built around a level of federal revenue that has never been reached even for one year. Paul Ryan's budget plan, which was widely ignored by Republican leaders before a version of it was passed earlier this year by the House of Representatives, would increase annual spending from around $3.8 trillion to $4.7 trillion in 2021. That trillion-dollar increase comes on top of a $1.3 trillion increase between 2001 and 2010. Think about it: In 1991, total federal spending (in constant 2010 dollars) was about $2.1 trillion. By 2001, it was $2.3 trillion and by 2010, it was $3.6 trillion.
And Medicare spending, the single-largest time bomb in the budget (along with interest on the national debt!), is set to go off.
This is no time to be praising folks who would lock in massive, historic increases in across-the-board spending (defense, entitlements, you name it). It is a time to push politicians to actually start talking about how to right-size government, whether it's via "The 19 Percent Solution," which would balance expenditures with historic levels of revenue or plans such as those authored by The Republican Study Committee or Sen. Rand Paul (R-Ky.), either of which would get the job done. With all due respect to Pethokoukis, those are the plans that need to be championed, not ones that jack spending even more over the future.
Here's a video in which Reason columnist and Mercatus Center economist and I talk with John Stossel about the shortcomings of the Paul Ryan plan and Barack Obama's proposed budget: