A "full-zero" federal debt....Really ?

So again, I find myself getting repeated e-mails with comments of condemnation for backing the Ryan spending cut proposal. I'm constantly told that it does not go far enough, to bring deficit and debt down fast enough. To them I ask: "Fast enough for what?"






To be entirely honest, I've never been one to worry about deficit and debt until the Obama administration took office. Don't get me wrong, I'm a huge proponent of strengthening the limitations of government. I have championed the cause of reducing the size and scope of government most of my adult life. Sure, the size and scope of government is directly related to the deficit and debt we have accumulated, but my interests have always been related to that root cause, not the financial after-effects. I've always said that bloated spending, and the taxation associated to it, were a huge drag on the economic growth of our country. People... I'm still on the team... we still want the same thing! I just don't see the advantage of a "zero debt", so I'm not looking at the Ryan plan 50 years forward.





The fact that we need to get our deficit under control is undisputed. It is a fact that, as stated by the Ryan plan, this is a spending issue not a tax revenue issue, because the government has already has exceeded taxing and spending norms as a percentage of GDP. So I'm with you on the correction required. Cut government where and when you can to get the budget balanced and revenue projections sufficient to meet the demands of our future. If the Ryan plan does that, before we fall off the cliff of insolvency, what else matters?!!





Sure, there will be other policy disputes, more fights against government overreach, but you can't fight all these battles at once. We first must prevent government from destroying our lives, and the lives of future generations. The simple fact that these politicians are finally attempting to deal with the structural issue of entitlements is a huge win. Why snatch defeat from the hands of victory? This one battle will at least move us away from the cliff, where we can safely fight the other philosophic battles concerning the role of government in our lives.





Now..... to give you something you can rationally criticize me for.... I think the Ryan plan for Medicare and Medicaid make those programs politically palatable. I think these government systems, under the new parameters Ryan wishes to impose, would remove them from my target list for the forseeable future. He does nothing with Social Security, so it remains one of my programs of horror, but Medicaid and Medicare, with limitations on growth, are fine by me.



Paul Ryan’s plan for post-2022 Medicare spending, sets the dollar amount that each Medicare enrollee would receive, for which to purchase a basic insurance policy. If they want something better than a basic plan, they will need to pay the additional costs. The dollar amount would go up only with general inflation, not by the higher medical inflation rate, and it would be means-tested to ensure all costs required for our low-income enrollee's is provided for. It removes the governmental distortion of the health care system and reinstates the forces of competition to slow the medical inflation rate.



Indexed to inflation, or economic growth, is a brilliant way to control government cost. Cutting much further, would be gutting the system beyond any point of having a system at all. Leaving the health care consumer with some "skin in the game" stimulates cost comparisons and forces cost competition, helping to hold medical inflation to a minimum. Keeping program cost growth at, or more near, revenue growth helps to prevent the deficit and debt we are all worried about.



Now if in the future, we find the set amount for Medicare has left the average enrollee short of being able to pay the cost difference, even after means testing has been stretched paper-thin for the top income earners . Do we continue to work the debt to full zero, just for the sake of getting to zero? It used to be our goal was a balanced budget and a 40-50% debt-to-GDP ratio. The Paul Ryan plan would eliminate deficits, and get us under the 50% debt-to-GDP ratio by at least 2040. Now, this is just over 25 years from now. That's pretty good in my mind, considering the mess were facing.



I guess what I'm trying to say is, we can't foresee what the future brings. And, trying to look too far into the future is pointless. But setting an unrealistic goal of "zero debt", at anytime in our future, is just as pointless. "Full zero" should not now, nor ever be, a top priority! In my mind, if we ever start burning through debt at a substantial pace, after reaching the 50%-of-GDP ratio, we should slow that pace with responsible adjustments to entitlements, as needed, and/or, further the quality of life improving, economy stimulating, tax reductions. It took us several generations to accumulate this debt, why not set our immediate goal to getting control of it, and setting proper management rules to keep control of it. In my mind, there is little argument for "Full Zero". Why the pain, when there is Zero Gain?