…because I’m an economist and a mom–that’s why!

Ryan as Romney’s VP

August 11th, 2012 . by economistmom


Wow!  It looks like the federal budget will be front and center in the presidential campaign after all, with this breaking news that Mitt Romney has picked the chairman of the House Budget Committee, Paul Ryan (R-WI), as his running mate.  (CNN’s live blog on the announcement is here.)

Ezra Klein summarizes the implications well here. I like Ezra’s points about what Romney’s choice of Ryan means for the stark choice that will face voters in Romney-Ryan vs. Obama-Biden:

5. It’s worth recalling how Ryan became a semi-household name. It wasn’t a Republican strategy to put him forward. As Ryan Lizza recounts in his New Yorker profile of Ryan, it was a Democratic strategy to put Ryan forward. Ryan, he writes, “was caught between the demands of the Republican leaders, who wanted nothing to do with his Roadmap, and his own belief that the Party had to offer a sweeping alternative vision to Obama’s. Ryan soon had an unlikely ally, in Obama himself.” While Republicans were trying to keep Ryan quiet, the Obama administration was trying to make him famous. They saw his plans as the clearest distillation of the GOP’s governing philosophy — and they thought it would drive voters towards the Democrats. We’ll know in November whether that was a genius strategy or an epic miscalculation…

7. Ryan upends Romney’s whole strategy. Until now, Romney’s play has been very simple: Don’t get specific. In picking Ryan, he has yoked himself to each and every one of Ryan’s specifics. And some of those specifics are quite…surprising. For instance: Ryan has told the Congressional Budget Office that his budget will bring all federal spending outside Medicare, Medicaid and Social Security to 3.75 percent of GDP by 2050. That means defense, infrastructure, education, food safety, basic research, and food stamps — to name just a few — will be less than four percent of GDP in 2050. To get a sense for how unrealistic that is, Congress has never permitted defense spending to fall below three percent of GDP, and Romney has pledged that he’ll never let defense spending fall beneath four percent of GDP. It will be interesting to hear him explain away the difference.

8. It’s not just that Romney now has to defend Ryan’s budget. To some degree, that was always going to be true. What he will now have to defend is everything else Ryan has proposed. Ryan was, for instance, the key House backer of Social Security privatization. His bill, The Social Security Personal Savings Guarantee and Prosperity Act of 2005, was so aggressive that it was rejected by the Bush administration. Now it’s Romney’s bill to defend. In Florida.

Like it or not, America, we’re going to be talking a lot about deficits, debt, the federal budget, and the fundamental role of government in this election.  While the Ryan pick might not be great for future bipartisanship in developing compromise deficit-reduction plans, it will sure get people talking about, and hopefully thinking more about, what they expect the government to do for them and how they are willing to pay for it.

7 Responses to “Ryan as Romney’s VP”

  1. comment number 1 by: rjs

    here are the original Ryan plan projections, via bill mcbride:

    they have since disappeared elsewhere..

  2. comment number 2 by: SteveinCH

    I would like to respond to Ezra’s point 7 since that point has been often made and, to me at least, lacks context.

    1. The President’s last budget submission forecasts discretionary spending (defense and non defense) to have fallen to 5.0% of GDP by 2022.
    It seems a bit unusual to say that 3.75% by 2050 is impossible from a base of 5% by 2022.

    Indeed, the math seems rather simple. Let’s assume real GDP per cap growth of 1% from 2022 to 2050 and a baseline of 5% of GDP as the President forecasts. If we grew discretionary spending at the rate of inflation plus population and GDP grew 1% faster, then discretionary spending would be 3.78% of GDP by 2050.

    I sometimes wonder whether Ezra (or Diane who quotes him here) is aware of that fact. It is a truly sad world where we define “austerity” as “growth at the rate of inflation plus population.”

  3. comment number 3 by: SteveinCH

    Apologies for posting the wrong link.

  4. comment number 4 by: Brooks / Gordon

    Can I get your answer to my question over at ?

  5. comment number 5 by: AMTbuff

    Although the choice probably reduces the chance of a Romney victory, it ensures an educational campaign. The latter is much more valuable to the country than the former.

    The public might elect an Alfred E. Newman candidate over a candidate with a plan for painful retrenchment. After default is forced by the bond market, the fiscally responsible party will be seen as prescient. That party will become dominant for the next two decades.

    It would have been a tragic waste if the public had not been given a choice in 2012 of at least one realistic fiscal alternative. I am very glad that at least one such choice will be offered.

    If Obama were to offer a second such choice, that would be absolutely ideal and I would be happy with either candidate as winner. Permanently avoiding default is much more important than a few points of GDP difference in government spending.

  6. comment number 6 by: Jim Glass

    Kudos to Romney and the Repubs for naming Ryan.

    Now there’s at least one guy in the game who’s been willing to put up the closest thing to a real long-term budget plan and take the heat from all sides for it.

    It’ll be interesting to see how they’ve planned to respond to everybody and his brother and sister who will be blasting that budget plan without having the nerve to put up one of their own.

  7. comment number 7 by: Patrick R. Sullivan

    At the very least, the Ryan picked has unhinged Brad DeLong. Which makes for great entertainment.