The United States faces a crushing debt of well over $14 trillion and adds to it at a rate of roughly $4.15 billion per day on average. The absolute first step in paying off this debt, which will be a problem to be dealt with likely through this entire century, is to balance the federal budget so that no more is added to it. This process will be extremely difficult and very drawn out in and of itself because the total gap between what the government collects in taxes and what it currently spends is about a $1.5 trillion deficit for just this year.
Many new ideas are beginning to surface about plans to solve the crisis. Everyone agrees that solving the deficit issue is absolutely step one. With taxes collected by the government holding steady at about 19 percent of GDP, close to the historic average, the culprit is easily identified as completely out of control government spending.
One such person to offer up a new plan is the new Republican House Budget Committee Chairman Paul Ryan with his “American Roadmap.” This plan reduces government spending and simplifies the tax code to produce a more business friendly America with a plan to get out of the current financial crisis. Recently, a Washington Post journalist called out Ryan’s plan for allegedly not reflecting the ideas of a “fiscal conservative.” The piece outlined budget predictions associated with the plan that did not reflect the sentiment of “fiscal conservatives.” Although the predictions may seem bleak and fiscally un-conservative at first glance, the important question to ask is: Compared to what? Take a look of the predictions for American Roadmap as compared to what current U.S. law budget predictions are:
Projected Annual Deficits Between Now and 2040:
American Roadmap – 3.5 to 4.5 percent of GDP deficit
Current U.S. Law – From about 4.7 (est. 2012) to about 15.2 (est. 2040) percent
Projected Debt Held by Public in 2063
American Roadmap – About 70 percent of GDP
Current U.S. Law – Far above 300 percent of GDP
Projected Date of Balanced Budget
American Roadmap – Around 2063
Current U.S. Law – NEVER
Projected Additional Debt Accrued Before Balanced Budget
American Roadmap – $62 Trillion
Current U.S. Law – INFINITE
The lesson to be learned when studying the economic projections of current law and projections of the American Roadmap is that context matters. The American Roadmap is a plan to balance the federal budget and eventually dig the U.S. out of debt. The fact that the economic projections for the American Roadmap seem to be out-of-the-ordinary for someone claiming to be a fiscal conservative speaks less to the fact that this may be a misrepresentation and more to the fact that our current policies are much more intimidating than many Americans seem to understand. When compared side by side, choosing the American Roadmap (even with its unexpected projections) over current U.S. fiscal policies is like choosing a path to success over simply driving off a cliff.