Paul Ryan in La La Lie Land

Economist Aaron Carroll forecast the trend in temperature for Indianapolis based on the last two days. Scared yet?

Lying with statistics is one of those things you watch out for when you work with numbers.  It’s one of the reasons there’s peer review for journal submissions.  Mistakes in methodology ruin academic careers and reputations.  However, loosey goosey methodology is the hallmark of advocacy research.  Paul Ryan’s chart–published today in the WSJ–is going to be a hallmark of Stats Gone Wild.  Finding a trend in an economic variable is a standard practice for analyzing time series.  It’s taught to undergraduates in their first stat class and doctoral students continually in econometrics.  Results are dependent on a lot of things you can do while running the analysis.  The first thing you teach to your undergrads is there has to be a certain number of observations.  Then, you start looking for other things that could cause problems.  Forecasts are only as good as the assumptions.  We’ve seen this problem before when Ryan’s number crunching. Paul Ryan’s new little chart takes the cake.  Ryan’s assumptions continually fail the reality test.  They also are extreme in their result.

Ryan’s assumptions and programs are summed up by Ezra Klein this way.

Ryan’s budget funds trillions of dollars in tax cuts, defense spending and deficit reduction by cutting deeply into health-care programs and income supports for the poor.

Yes, folks, the poor are going to pay if Paul Ryan gets his way.  All of this based on ideology and the same baseless assumptions he always makes.  Tax cuts more than pay for themselves.  Privatization always saves money.  Health care costs only increase by the rate of inflation.  Giving money to the rich will grease the wheels of manufacturing and hiring.  We might as well assume that the Treasury can hire a few alchemists to turn hay bushels into gold.

Ryan tells CBO to assume his tax plan will raise revenues to 19 percent of GDP and then hold them there. He tells them to assume his Medicare plan will hold cost growth in Medicare to GDP+0.5 percentage points. He tells them to assume that spending on Medicaid and the Children’s Health Insurance Program won’t grow any faster than inflation. He tells them to assume that all federal spending aside from Medicare, Medicaid and Social Security will fall from 12.5 percent of GDP in 2011 to 3.75 percent of GDP in 2050.

Oh, there’s more of that Republican wishful thinking. Or as I like to call it, big fat ol’ lies. Lies and ideology in. Ideology and Lies and Pain out.

At the end of his initial release, Ryan posts a table comparing his budget to the president’s budget. The single largest difference is in the tax section: Ryan raises $2 trillion less in revenue than the White House does. In the president’s budget, those revenues come mostly from increasing taxes on the wealthy. So that’s the first big gap between the two proposals: Under Ryan’s budget, revenue would be lower, and the distribution of taxes more regressive, than under Obama’s budget.

On the spending side, Ryan’s biggest cuts come from health-care programs. He eliminates the $1.5 trillion that the Affordable Care Act uses to purchase health insurance for 30 million Americans. Then he cuts Medicaid and related health programs by $770 billion — which is to say, by about a third. Medicare takes $200 billion in cuts on top of that.

Yes.  All of us will be held hostage to Insurance Companies in Paul Ryan’s world.  Ryan thinks he’s doing us all a favor.  Here’s some more thoughts from Matthew Yglesias who reminds us that all of Paul Ryan’s analysis comes from the bad fiction of Ayn Rand. 

What Ryan is talking about here is Medicaid which offers health care coverage to the poor, to the disabled, and to an important class of elderly people. Currently the money for Medicaid comes from both the states and the federal government. States have to meet a lot of minimum coverage standards and get federal financial assistance for doing so, and in addition states have the option of securing additional federal monies for additional coverage if they’re willing to kick in extra money of their own. Because health care is proejcted to grow more expensive over the next fifty years, the cost of this program is projected to go up substantially. One way of preventing that from happening is to just refuse to pony up the money, and make Medicaid beneficiaries get by with less health care. And that’s what Ryan’s plan does. On the one hand, it excuses states from their minimum coverage responsibilities. On the other hand, it reduces the amount of money that’s available to give people coverage. Which is all about what you’d expect from a tax cutting Ayn Rand fan. Keep the money in the hands of the job creators who earned it rather than handing it out to the moochers and looters looking for a little free medicine.

But please God almighty can we avoid referring to this as a measure that “strengthens the safety net” by empowering states to “tailor assistance to their specific populations”? Ryan doesn’t like taxing the wealthy to give resources to the poor and disabled, so he proposes to give fewer resources to the poor and disabled.

Every time I read something that comes out of Paul Ryan I end up wondering what is seriously wrong with this man.  He’s like the master of doublespeak. We’ve seen this before and it’s still called voodoo economics in my book.  There is no evidence that giving excessive tax cuts to rich people creates jobs.  There is plenty of evidence that our health care delivery system is the worst and most expensive of all the development nations. Paul Ryan wants to continue life support to the sick system we have now.  The one that was put into place by the Dubya Bush administration that’s delivered endless, expensive wars, poor job creation and economic growth, huge deficits, and a global financial crisis.  Why does he keep playing the scratched-up record?  My hope is that all the political activism and outrage brought about by Scott Walker in Wisconsin will hand Paul Ryan a pink slip in the fall.  The nation cannot afford any more lies, distorted statistics, and voodoo economics. How can congress ever negotiate a budget in good faith when at least one of the major players appears to be delusional?