American Elephants

Paul Ryan is Right! by The Elephant's Child

Dan Mitchell is an economist at the Cato Institute, and does an excellent job of explaining economics for the rest of us.  Democrats are going all out to attack the Ryan Plan, the “Pathway to Prosperity,” which is a workable way out of the fiscal mess we find ourselves in.  Democrats, of course, are in full attack-mode trying to convince voters that Republicans are trying to starve Granny. They have been making the same old claim since Medicare first was passed in the Johnson administration.

The biggest thing about Lyndon Johnson’s “Great Society” was the vast increase in federal spending on social services. Before the “War on Poverty” most social service agencies were privately organized and funded. Between 1965 and 1970 federal spending on social services soared from $800 million to $2.2 billion in 1970, and then increased to $13 billion in the next ten years. Instead of helping those in poverty, it increased poverty, and vastly increased what became a constellation of housing groups, subsidized day-care centers, employment-training programs, health clinics and much, much more all designed to tap into War on Poverty money.

In less than five years, the federal budget for Medicaid went from $1.2 billion up to $6 billion. The only federal program that has come in under budget is the Medicare Drug program, which had a built-in incentive for seniors to hold costs down. The Democrat plan for ObamaCare eliminates that incentive.

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