The good news, as others have commented, is that it seems likely that we will get a good policy debate on the role and future direction of the Federal government under way. I think this is appropriate and good for the country.
The bad news is that reporters and pundits are really terrible at the way in which they report data. Let me give you one example, here is Ezra Klein on the selection of Ryan.
7. Ryan upends Romney’s whole strategy. Until now, Romney’s play has been very simple:Don’t get specific. In picking Ryan, he has yoked himself to each and every one of Ryan’s specifics. And some of those specifics are quite…surprising. For instance: Ryan has told the Congressional Budget Office that his budget will bring all federal spending outside Medicare, Medicaid and Social Security to 3.75 percent of GDP by 2050. That means defense, infrastructure, education, food safety, basic research, and food stamps — to name just a few — will be less than four percent of GDP in 2050. To get a sense for how unrealistic that is, Congress has never permitted defense spending to fall below three percent of GDP, and Romney has pledged that he’ll never let defense spending fall beneath four percent of GDP. It will be interesting to hear him explain away the difference.
And while what Ezra says is true, it's terribly incomplete. A few things to think about to put the oft bandied about 3.75% number in context.
First, the President's budget submission puts future discretionary spending at 5.0% of GDP by 2022 down from 8.7% of GDP in 2011. Now, somehow, the difference from 5 to 3.75 doesn't seem quite as far as the difference between 8.7 and 3.75.
Second, let's do a little extrapolation exercise. Suppose that real, per capita GDP growth averaged 1% between 2022 and 2050. This is a good bit below the long term historical average but let's just assume it was. And let's assume that discretionary spending grows at the rate of inflation plus population over that same period. Care to guess what percent of GDP it would be in 2050? How about 3.78%.
So, in effect, what Ryan is assuming is that spending will grow as 100 basis points slower than GDP growth on average in the long run. A crazy assumption? Horrible austerity? Doesn't seem like either to me.
The question therefore is whether the actual facts will become known. I'm not optimistic but the chances are higher today than they were yesterday.