U.S. Crash Looms Without Roadmap Directions

Caroline Baum
Bloomberg BusinessWeek

July 8 (Bloomberg) — The U.S. debate over more government spending versus fiscal austerity is captivating the nation’s capital, dominating the airwaves and providing the best excuse in at least a millennium to recycle St. Augustine (“Lord, make me chaste, but not yet”).

What it has failed to do, with rare exception, is produce any viable alternatives. The choices are warmed-over Keynesian pump-priming or “passively waiting for disaster,” as Harvard University historian and business school professor Niall Ferguson put it on the July 4 edition of CNN’s “Fareed Zakaria GPS.”

There’s got to be a better way. And there is. Ferguson advocates “radical fiscal reform” to address America’s entitlement problem — Medicare and Social Security will eventually consume the entire federal budget — and simplify the tax code by introducing a simple flat tax and a lower corporate rate.

“It’s pretty radical,” Ferguson told Zakaria. “It has almost no congressional support. But it is an option that we should be discussing much more seriously.”

At least one congressman is doing just that — and learning how lonely it can be crusading for real change. Paul Ryan, Republican of Wisconsin and ranking member of the House Budget Committee, introduced his “Roadmap for America’s Future,” version 2.0, in January. (He proposed his first Roadmap in 2008.) President Barack Obama called it a “serious proposal” when he dropped in on the House Republican retreat.

Solid Report Card

Compared with the current fiscal crash-and-burn trajectory, the plan reduces deficits and debt, putting the federal budget on a sustainable path; results in stronger per-capita economic growth; puts Medicare and Social Security on a sound footing; and lowers health-care expenses while reducing the number of uninsured.

And that’s not Congressman Ryan talking. That’s the assessment of the non-partisan Congressional Budget Office, which gave the Roadmap a test drive and found that it performed well.

The article continues at Bloomberg

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