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October 26, 2011

A Review of the Ron Paul Deficit Cutting Plan

Ron Paul, the poster child of the modern day libertarian movement, wants to be President once again in 2012. Paul believes that the federal government has become over-expansive in just about every activity it conducts itself in – from commerce to education to wars. His newest plan involves cutting $1 trillion from the federal budget and eliminating five federal departments. Here are the bullet points of his plan:

• Eliminate the Department of Energy
• Eliminate the Department of Housing and Urban Development
• Eliminate the Department of Commerce
• Eliminate the Department of the Interior
• Eliminate the Department of Education
• End military involvement in Iraq
• End military involvement in Afghanistan

I agree with Ron Paul’s plan to downsize government. The Department of Energy has not constructively impacted our dependence on foreign oil or made good loans to green energy companies. The Department of the Interior is worthless. The Department of Housing and Urban Development is at its largest in the history of our government and overseeing the greatest decline in housing quality and ownership since the Great Depression. The Department of Commerce is an arm of government that regulates (and mostly interferes) with commercial transactions. The Department of Education spends close to $100 billion per year and what is the result?

Where I disagree with Ron Paul is what he told CNBC regarding entitlements (Social Security, Medicare, etc). He stated that the government has an obligation to pay those debts. However, he did not address whether or not the government has the ability to pay those obligations long-term, which is the crux of the entitlement/spending problem.

Currently, the government spends $1 trillion more per year for entitlements than it takes in for entitlement related taxes. Entitlement spending eats more than half of all government receipts. While the departments that Mr. Paul lists above are wasteful, the savings their elimination would generate will slowly be eaten by rising entitlement costs over the next three decades.

Overall, Ron Paul’s plan is not good enough to garner my vote in the 2012 primaries.

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