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  • Ryan Budget Critics Incorrectly Attack Heritage Analysis

    Except in Jeopardy!,  questions usually come first, followed by answers. Likewise, when criticizing public policy studies and their underlying methodologies, it typically helps to see the policy study and methodology used before one embarks on criticism.

    Today at 8:37 a.m. ET, Matt Yglesias of the Center for American Progress’ Think Progress blog released a critique of the Heritage Foundation’s Center for Data Analysis (CDA) econometric analysis of the federal budget for FY 2012 proposed by Rep. Paul Ryan (R-WI). Yglesias’ posting preceded Heritage’s public release of the CDA’s study and the detailed description of how we prepared our analysis. In the interest of answering questions after they were asked (before our study was released), we sat down with Bill Beach, the director of Heritage’s CDA, for some Q&A in response to criticisms and questions concerning our study:

    Q: What did CDA use in preparing its analysis of the Ryan budget?

    A: We used the same economic model that is employed by leading government agencies (Energy, Treasury, Labor, Office of Management and Budget) and the Congressional Budget Office (CBO). The model is the Global Insight U.S. Macroeconomic Model, which has been in widespread use among government agencies and Fortune 500 companies for over 40 years. Its commercial success is a measure of its award-winning accuracy.

    Q: Why should anyone believe the CDA’s estimates on the Ryan budget when CDA predicted job growth from enactment of President Bush’s tax plan in 2001 that did not materialize?

    A: For all of its strengths, the Global Insight model is not designed to predict dot-com bubble bursts, terrorist attacks, or foreign wars — and following the CDA estimate of the effect of the Bush plan, the nation had the dot-com bubble burst, the 9/11 attacks, the war against terrorists around the globe, war in Afghanistan, and war in Iraq. None of those events was foreseeable when CDA published its estimates on the Bush economic plan in January 2001. However, the model has a good track record of predicting where the trends of the economy are leading us and how those trends would be affected by policy change.  That’s why the CBO and other government agencies, like the Energy Department, use this model.

    Q: Is the Ryan budget plan similar to the Bush economic plan of the last decade? Can you compare economic analysis of one with the other?

    A: Mr. Yglesias lays part of his argument for not believing Heritage’s analysis of the Ryan plan on the claim that it’s like the Bush plan: a “myriad of tax cuts for the rich….” While President Bush’s plan contained lower taxes for everyone as does the Ryan budget, the similarity ends there. Rep. Ryan advances fiscal responsibility on two fronts: spending cuts and tax reform.  The Bush plan did nothing on the spending side. In fact, spending under President Bush increased dramatically and that spending, coupled with accelerated spending and borrowing under President Obama, has contributed to the fiscal imbalance that the Ryan budget is trying to unwind. Thus, our analysis of the Ryan plan differs significantly in scope from work we’ve done in the past on other economic plans.

    Q: Won’t just the rich benefit from the Ryan budget plan?

    A: As our analysis shows, job creation and income growth will be widely shared under the Ryan plan.

    Posted in Ongoing Priorities [slideshow_deploy]

    25 Responses to Ryan Budget Critics Incorrectly Attack Heritage Analysis

    1. Bobbie says:

      Their minds are so narrow. They won't consider everything LIKE TRUTH DOES!

      Mr. Yglesias: Won’t just the rich benefit from the Ryan budget plan?

      No. All of America will! All American's who's will it is to live free from government! That would include all American immigrants who weren't misguided.

      Heritage, you are wonderful! Mr. Ryan, you are one heck of a beautiful man! Thank you both for your sincere and genuine work to bring America back robust and build the strength of Americans! Don't let any rino hold you back, Mr. Ryan!

      The good of America needs you and the like minded more than ever!

    2. David Hunt, Glendale says:

      If lenders stop lending the U.S. money, we will endure a major collapse of the economy and chaos.If we reduce spending fast enough, we can avoid that. If Mr. Ryan succeeds in slowing spending by this government, he will one day be President. Count on it.

    3. George Colgrove VA says:

      The liberals asking:

      "Won’t just the rich benefit from the Ryan budget plan?"

      The very premice of this question will be why we will continue to decline. Asking it gives credibility that "rich" is a problem.

      If we view "rich" as bad at the highest level of thought, then we will not be rich. If we focus all of our attention on "poor" we will all be poor.

      If you never have read the book:

      "The Science of Getting Rich"

      read it. This was the first positive thinking book written in 1910. It is a little quarky, but there is some basic principals that apply in this debate. You can read it online at:

      http://en.wikisource.org/wiki/The_Science_of_Gett

      or download the book at:

      http://www.v-j-enterprises.com/scienceofgettingri

      The premice of this book is that you can have the things you want and you have the God given right to have these things. Wattles says that it is God's and his creation's desire that you have these things. This is not the persuit of taking from other people to obtain your wealth, but rather gaining wealth by adding to others. One of wattles basic principal is:

      "In order to receive his own when it shall come to him, man must be active; and this activity can only consist in more than filling his present place. He must keep in mind the Purpose to get rich through the realization of his mental image. And he must do, every day, all that can be done that day, taking care to do each act in a successful manner. He must give to every man a use value in excess of the cash value he receives, so that each transaction makes for more life; and he must so hold the Advancing Thought that the impression of increase will be communicated to all with whom he comes in contact."

      Wattles says:

      "Substance is friendly to you, and is more anxious to give you what you want than you are to get it."

      As for solving other people's problems:

      "It is as flagrantly wrong to coerce people by mental power as it is to coerce them by physical power. If compelling people by physical force to do things for you reduces them to slavery, compelling them by mental means accomplishes exactly the same thing; the only difference is in methods. If taking things from people by physical force is robbery, them taking things by mental force is robbery also; there is no difference in principle.

      "You have no right to use your will power upon another person, even "for his own

      good"; for you do not know what is for his good. The science of getting rich does

      not require you to apply power or force to any other person, in any way whatsoever. There is not the slightest necessity for doing so; indeed, any attempt to use your will upon others will only tend to defeat your purpose."

      And as for Poverty:

      "What tends to do away with poverty is not the getting of pictures of poverty into

      your mind, but getting pictures of wealth into the minds of the poor.

      "You are not deserting the poor in their misery when you refuse to allow your mind to be filled with pictures of that misery.

      "Poverty can be done away with, not by increasing the number of well to do people who think about poverty, but by increasing the number of poor people who purpose with faith to get rich.

      "The poor do not need charity; they need inspiration. Charity only sends them a loaf of bread to keep them alive in their wretchedness, or gives them an entertainment to make them forget for an hour or two; but inspiration will cause them to rise out of their misery. If you want to help the poor, demonstrate to them that they can become rich; prove it by getting rich yourself."

      "People must be taught to become rich by creation, not by competition."

      The thing is, we all have the right to be or have what we want. Questioning being rich by those who themselves are rich is forcing all of us into the misery of being poor and suffer being servants to them. The basis of the writings in this book was the same basis of the men who wrote the constitution. It is the basis that we all are inherently good people and have a God given chance at life, liberty and a rightful persuit of happyness. One is not happy, nor does one have liberty and life if we accept that being "rich" is a bad thing.

      The very basis of Wattles work in this book is:

      1) God's creation wants to provide you all that you want

      2) If you give more to people in use value than what you get back in cash value then you add to the increase of life

      3) That through your inspiration, you can give more to the poor than a welfare check thus giving them liberty

      4) That if you, I and the other guy all follows the persuits of getting "rich" one day all will be rich

      5) Do not obtain your wealth on the backs of others, but by adding to the wealth of others

      Mind you, "rich" means different things to different people.

      I contend our "laser like" attention on solving poverty since FDR has created more poverty. The Reagan era was the only time we focused on Properity, and look what happened. Real Prosperity was abundant.

      Paul Ryan entitled the budget plan "The Path to Prosperity." Though the work still assumes the federal workforce will continue to be an agent of forcing some meager level of existance for some by taking wealth from producers, it has several components that will lead to greater individual control over ones own personal "Path to Prosperity." This budget proposal is a good start but much more needs to be done to reduce and ultimately eliminate the federal government's role in our lives. The new federal government should mirror the original federal government – one that allows every American the freedom to be what they want to be and if that is being "rich" – whatever that means to that person – so be it.

    4. Mo Kingston MA says:

      You are too kind dignifying the "canned" critique with a polite response. I learn more each year to ignore the rear view mirror when trying to make my way forward. I look back only for learning what to avoid. In this case it is the lack of intelligence of the critic about which I learn. Thank you Heritage and Mr. Ryan.

    5. oscar-leroy says:

      "I learn more each year to ignore the rear view mirror when trying to make my way forward"

      .

      With the conservative record you should be afraid to look back.

      .

      Look over there….9/11.

    6. West Texan says:

      Big government social progressives never have nor will comprehend which side of the equation economic prosperity goes. In other words, they've flunked basic arithmetic while finding contentment in feeding a growing counterproductive monstrosity. Theirs is a magical world of instantly appearing cash. It's a far better fit for their equalitarian fantasy. Ignore the real factors and variables as these simply down give the answer they want. Neither does the U.S. Constitution. As James Madison once said "Do not separate text from historical background. If you do, you will have perverted and subverted the Constitution, which can only end in a distorted, bastardized form of illegitimate government." Such is the social progressives' manipulated regressive equation.

    7. West Texan says:

      " … these simply [don't] give the answer they want."

    8. CHHR, VA says:

      I noticed the post from @Oscar-leroy – I have to say, I am sick of the pundits seeking to blame Bush for everything. Nine months into office after nearly a decade of Clinton who desecrated the military and their ability to respond to a real threat such as 9/11 should be all it takes for a reasonable and UNBIASED person to consider.

      Looking in that rear-view mirror, there is plenty of blame to go around – let's start with those elected to be the overseers of our economic state standing on the floor claiming that "Freddie and Fannie are doing fine," that "America is not broke" and that the "rich are evil."

      I'm sick of it and it's time to get the tired old rhetoric out of the discussion – as the POTUS said just yesterday, "It's time to grow up" and that begins with you!

      I thank Rep Ryan for his call to duty and his well thought out and well-presented budget – Heritage, thank you for a great response to those critics who are determined to take America down. Keep the message going – a mature, reasoned response is making its way across America and the idiots that continue to spew this garbage are exposed – Pray too that America's conservative movement does more than silently go through this mess – it's time to act, stand-up and be counted.

    9. Lloyd Scallan (New O says:

      We all should understand that regardless of what proof HF (or any other conservative source) provides, the Obama leftist lackeys will not accept the

      truth, but continue to distort and deceive. That's who and what they are. Just like

      their leader, they cannot allow the facts to go unchallenged. It is the Obama

      agenda. He must deceive the American people, otherwise he stands absolutely no chance of "transforming" this nation into his socialist dream.

    10. Pingback: Must Know Headlines — ExposeTheMedia.com

    11. Stirling, Pennsylvan says:

      "Center for American Progress" is a George Soros Funded organization. So it's not hard to see where they get their marching orders from. With that in mind it's not hard to see that Soros agenda for an "open society" can not be achived when the "truth" is known.

    12. Fact Finder, Chicago says:

      Just wondering why the Unemployment projections got removed from the report? I sure would like to know how we will get down to 2.8% by 2021, as published in the original report. Just asking.

    13. Jamie McCarthy, Kala says:

      Your CDA did not find it "foreseeable" in January 2001 that the dot-com bubble would burst? That happened in April 2000.

      Paul Krugman points out that you removed the already-infamous "2.8%" unemployment figure from your tables. How do you respond to this? http://krugman.blogs.nytimes.com/2011/04/06/memor

    14. Kevin H, college par says:

      Just shows how Heritage and conservatives misinform the american public and frankly, don't know economics, they already pulled their economic assumptions because they know they are wrong:
      http://tpmdc.talkingpointsmemo.com/2011/04/herita

      Only took one day for them to see hwo wrong they were!!!

    15. Pingback: The Reviews Are In for Paul Ryan's Budget «ScrollPost.com

    16. Brooks, NC says:

      Please keep the conversations going about farm subsidies. They are so unfair and should be stopped. Push Paul Ryan and the others to stay on this wagon!! My business either makes it or it doesn't. Farming should be the same way….with some VERY structured crop insurance. But, the subsidies in addition to their income is ridiculous!!

    17. Pingback: The Reviews Are In for Paul Ryan's Budget | Con Games

    18. james welsh says:

      You guys are kind of like dinosaurs at this point aren't you.

      Glad we have those 1.65 million new jobs you told us about.

      When did you lose objectivity?

      Or was the a prerequisite to employment.

      Thanks for the facts.

      I feel sorry for those who have to work for people who make you present lies as facts.

      Oh well, thanks for sdaring.

    19. james welsh says:

      oh, that is right you even get final say.

      Now that is sure stacking the deck.

      But, I wouldn't expect anything mor esubstantial.

      God Bless.

    20. Pingback: Inconvenient Numbers? Change ‘em. | The Big Picture

    21. rusureuwant2know IA says:

      The problem is it's still a "growth" plan. Government is the sole cause of inflation (requiring businesses to raise prices to pay ever increasing property and income taxes). If his plan doesn't tie government salaries to the cost of living/inflation, and if it doesn't do something about the exponential factor of government growth, we are stuck in the same holding pattern we've been in all along. Nothing will have changed.

    22. marmico says:

      Now that the unemployment rate forecast has been materially altered, when will some of the other macro variables be changed.

      For instance, it defies credulity that fixed investment in equipment and software will account for 13% of GDP in 2021 when it has never exceeded 9.6% of GDP going back to the Reagan era.

    23. Nick, Austin TX says:

      If Heritage is so right, then why did they change the unemployment projections from the original report?

    24. Pingback: More on the Characteristics of the Heritage Foundation CDA Analysis of the Ryan Plan | Bear Market Investments

    25. Jim says:

      Unfortunately, we're facing a self-correcting situation. Either the Congress enacts legislation to reduce spending and get the budget balanced such as Mr. Ryan proposed or we'll end up joining the list of countries that have defaulted like Greece.

      George's comments regarding The Science of Getting Rich are on the mark. There is a solution. It requires strong leadership and the collective thinking "in a Certain Way" of the whole country as Wallace Wattles suggested. But the current lack of leadership in Washington isn't going to get us there.

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