Ron Paul Releases “Plan to Restore America”; Promises Balanced Budget in Third Year of Presidency
Dr. Ron Paul, one of the Republican Presidential nominee hopefuls, and currently averaging third place in recent polls (trailing Herman Cain and Mitt Romney), has released his economic plan, the “Plan to Restore America“.
The plan outlines significant changes to the United States federal government, and promises a balanced budget by Mr Paul’s third year in office, primarily by way of the elimination of the Department of Energy, the Department of Commerce, the Department of the Interior, the Department of Education and the Department of Housing and Urban Development, as well as significant cuts to the Department of Defense and Medicaid. No additional tax sources are proposed.
What is, perhaps, most striking about Ron Paul’s plan isn’t the reduced role of the federal government, but rather the significant reductions in spending required to balance the budget. The US federal government’s deficit, which President George W. Bush gave birth to, and which President Obama nurtured into an accelerated adulthood, is truly astonishing, in both its size and the rapidity with which it grew during the Obama administration.
Here’s a look US federal revenues and expenditures over the past two administrations, as well as the impact of Dr. Paul’s plan:
In the absence of significant budgetary changes, the United States federal government is on a dire path indeed: over 40% of all federal government spending is done with borrowed money; over one in seven US workers works for government of one level or another (by comparison, in bankrupt Greece, that ratio is one in five), which is more than the number of people working in manufacturing and construction combined; at the time Social Security was founded, there were thirty workers paying for each one retiree, while today that ratio is three to one (and nearing two to one); medical costs continue to rise more quickly than inflation (this is significant, because close to 70% of all medical spending in the US is by government).
Ron Paul’s plan begins to make some of those difficult choices which are increasingly becoming unavoidable, and further has one big advantage over most other plans presented by the GOP Presidential hopefuls: an even-handed approach which doesn’t single out special interests or seek to carve out exceptions for favored groups (by contrast, the floundering Rick Santorum started his attack on Herman Cain’s “9-9-9” tax plan at the GOP debate in Las Vegas Tuesday by suggesting that the federal government is obligated to subsidize certain groups of people in order to produce children – one of his pet causes which he feels the government should change the rules for. Most of the candidate (with the notable exception of Herman Cain) favor continuing the type of patchwork the current 72,000 page tax code employs: an extraordinary number of special exceptions for certain favored groups).
It will be interesting to see how the media reacts to Mr Paul’s proposal, which makes choices which return government spending to a level supported by government revenues, without increasing the source or scope of those revenues.