Ins and Outs of the Ryan Budget Proposal

This is an interesting graphic from the WSJ comparing the Obama and Ryan budgets. The only thing I would add to this is that on percentage terms Rep. Ryan is proposing a 38.62% cut to Medicaid, a 14.4% increase in Medicare, and a 0.40% decline in Social Security, meaning that Medicaid is disproportionately affected by this proposal. The cynic has to point out that most of the beneficiaries of Medicaid (pregnant women, children, poor people, and the permanently disabled) don't vote in the same strength as the beneficiaries of Social Security and Medicare (elderly citizens).


I would also add the following excerpt (HT: Incidental Economist) from Tyler Cowen, a renowned libertarian economist (just in case some think this is a liberal post) regarding the privatization of Medicare:

2. Ryan nails our dysfunctional, “who is really responsible for paying for Medicaid?” structure.  That said, I’ve long preferred the federalization of Medicaid.  [...]
3. [...] Medicaid should be one of the last parts of the health care budget to cut.  [...]
4. [...] I would urge maximum transparency.  Health care costs are increasing by about five percent a year.  That means a fixed value voucher loses about half its real value, in terms of command over health care resources, within fourteen years.  [...]   If that is the decision we are going to make, let us understand it as such.  [...]
5. It would be nice to have a scientific estimate of how much fixed value vouchers would lower the rate of growth of health care costs.  I’m not convinced the effect here is large, but I’d like to see it studied more closely.
6. Ryan’s budget repeals ACA and thus in the semi-short run it could considerably increase Medicare costs.  There is no reason why Ryan’s plan shouldn’t keep the most fiscally responsible aspects of ACA.  Ryan exempts the current elderly from any Medicare cuts at all, see David Leonhardt’s remarks. [...]
8. As I’ve already blogged, the vouchers idea won’t help cut health care costs.  Let’s create some multiple public options within Medicare, some of which would allow people to trade health care benefits for cash. [...]
10. There’s not nearly enough on reforming the dysfunctional supply-side of our health care institutions.  Nor does science or basic research receive much discussion. [...]
13. [... T]he plan is not intended to be enacted into law.

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http://www.marginalrevolution.com/