Tuesday, March 20, 2012

A Balanced Budget in Five Years. The Knabe Compromise. (Patent Pending)

I'm sure you are all atwitter over the release of Paul Ryan's (Republican Chairman of the House Budget Committee) proposed budget. Let the cries of austerity begin! But I have a way to take the President's budget and Mr. Ryan's budget and create a balanced budget in five years. That's right, five years.
First. Here are Federal outlays from F11 through F22 for the President and Mr. Ryan's budgets. Personally I'm a little disappointed cuts weren't deeper for Mr. Ryan.

Here are revenues under both budgets. Personally I would like revenues to be lower as well. What is surprising is how close the revenue estimates are for both budgets. Over the 10 year time period, 2013-2022 the President's budget has revenue of $39 trillion and over the same time period Chairman Ryan has revenue of $37 trillion. Not very impressive.

Outlay minus revenue equals deficit. Over the ten years F2013 through F2022 the Obama deficits total $6.4 trillion. Over the same time period the Ryan budget deficits are $3.1 trillion. But even Ryan can't reach a balanced budget by fiscal 2022. I can.
Take the Obama revenue and the Ryan outlays and we reach a budget surplus by fiscal 2017. Over the ten year fiscal 2013 through 2022 the cumulative budget deficit under the Knabe plan is $1.1 trillion.

You are most welcome America.
PS. There is another alternative. What if we take Obama's spending and Ryan's taxes. I call it the Knabe Nightmare.

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