The Elementary Errors of Frum and Krugman
8:01 AM, Apr 8, 2011 • By JEFFREY H. ANDERSON
In The Week, David Frum claims that House Budget Committee chairman Paul Ryan’s proposed budget “actually increases the debt over the medium term — by even more [than] President Obama’s budget would,” thereby “worsening … the debt situation over the period from 2012 to 2021.” In today’s New York Times, Paul Krugman echoes part of Frum’s charge, claiming that the Congressional Budget Office (CBO) “finds that over the next decade the [Ryan] plan would lead to bigger deficits and more debt than current law.”
If these claims were true, this would be a real bombshell — as it’s quite hard to outspend President Obama. But Frum’s and Krugman’s claims are wildly inaccurate.
The Congressional Budget Office compares fiscal projections under Obama’s budget (see Table 2), under Ryan’s budget (see S-1), and under the CBO’s March 2011 baseline (see Tables 1 and 2). (In the CBO’s words, its baseline projections “show the paths that revenues and outlays would take over the next 10 years without changes in law.”) Here’s what the CBO says about debt held by the public (the portion of the debt that the CBO has scored) under each of these three scenarios:
In 2012, under current-law projections, the debt held by the public would be $11.519 trillion. Under President Obama’s budget, it would be $11.661 trillion — or $142 billion higher than under current law. Under Congressman Ryan’s budget, it would be $11.418 trillion— or $101 billion lower than under current law and $243 billion lower than under Obama’s budget.
In 2016 (year 5), under current-law projections, debt held by the public would be $14.279 trillion. Under Obama’s budget, it would be $15.292 trillion — or $1.013 trillion higher than under current law. Under Ryan’s budget, it would be $13.886 trillion — or $393 billion lower than under current law and $1.406 trillion lower than under Obama’s budget.
And in 2021 (year 10), under current-law projections, debt held by the public would be $18.000 trillion. Under Obama’s budget, it would be $20.806 trillion — or $2.806 trillion higher than under current law. Under Ryan’s budget, it would be $16.071 trillion — or $1.929 trillion lower than under current law and $4.735 trillion lower than under Obama’s budget.
That’s debt held by the public. Figures for the total national debt — which is currently $14.280 trillion — would further magnify the differences between Ryan’s and Obama’s budgets.
Moreover, the CBO says that, as a percentage of the gross domestic product, debt held by the public would decline every year from year 3 (2014) to year 10 (2021) under Ryan’s proposal, while under Obama’s proposal, it would rise every single year, hitting its highest point in year 10 (2021) and showing no signs of changing course thereafter.
So, on what are Frum and Krugman basing their claims? Apparently on the CBO’s March 2010 baseline projections, which (or course) are a year old and which, among other things, don’t factor in the Bush tax-cut extensions that passed late last year. Even if one were to use year-old baseline figures, however, that still wouldn’t change the debt numbers in Ryan’s or Obama’s own budgets, or the gap between them. So the basis of Frum’s claim that Ryan would rack up even more debt than Obama remains a mystery.
Recent Blog Posts