By Les Dunaway

This week’s column is a commentary, with references, on the “chalk talk” that Paul Ryan (R-WI) Chairman House Budget Committee has been presenting to House Republicans to reach a clear understanding of the crisis our country faces. The presentation does not propose solutions, it is only intended to reach understanding of the problem.  Below is the description of the sessions from Politico – Mar 6, 2011, pasted because there’s no direct link, and National Review’s take on the sessions from Feb 24, 2011. Following these, is a short U-Tube of Ryan explaining the problem and then the PowerPoints from Ryan’s House presentations with my comments. I’ve not been able to find other’s comments on the slides. If anyone has such, please append them in a comment.

Politico  – Mar 6, 2011

BEHIND THE CURTAIN – HOW THE HOUSE GOP PLANS TO SELL ENTITLEMENT REFORM — Fearing they may be walking into a political buzz saw by proposing cuts to Medicare and Social Security, House Republican leaders are working to build support among rank-and-file members and among constituents before releasing the House GOP budget next month. House Budget Chairman Paul Ryan (R-Wis.), who has spent years giving chalk talks on entitlements, is schooling his colleagues with a PowerPoint presentation, “The Choice of Two Futures,” designed to educate them about the problem before he proposes specific solutions.

The “listening sessions” are being held, 10 to 15 members at a time, in the conference room of House Republican Whip Kevin McCarthy. He kicks off the conversation, then Ryan presents for 10 minutes, followed by 50 minutes of conversation. The public education campaign will continue for two more weeks on Capitol Hill, including two hearings by Ryan. Then members will take it to the country with town halls during a Constituent Work Week, March 21 to 25. “It’s explaining, not lobbying them on a special brand of reform,” said a House aide helping plan the strategy. “It’s, ‘Here’s the problem,’ instead of ‘Here’s the answer we’re trying to sell you on.’”

In Ryan’s presentation, a graph with a blood-red curve is labeled, “Tide Wave of Debt.” “What Drives Our Debt?” shows the relative shares of the problem produced by Medicare, Medicaid and Social Security. A pie chart — “Who Owns Our Debt?,” showing 47 percent of U.S. public debt is held abroad – is illustrated with the flags of China, Japan and the U.K. On Thursday, a hearing called “Lifting the Crushing Burden of Debt” will feature Douglas Holtz-Eakin, a former Congressional Budget Office director who advised the McCain campaign. The following week, “Fulfilling the Mission of Health and Retirement Security” will spotlight Alice M. Rivlin, White House budget director under Clinton.

National Review “Budget 101” – Feb 24, 2011

Paul Ryan: The Choice of Two Futures

Slideshow (opens in a seperate window; comments below)

1. Cover sheet
2. Congressman Ryan clearly and, in my opinion correctly identifies the source of the problem
3. The year by year increase in spending under President Obama’s proposed budget
4. This slide is key. Our country has been successful and growing for 200+ years be controlling spending – until 2008. There is no possible way to support the projected increases.
5. This slide looks the components of spending vs projected revenue
6. Another look at spending – as a percent of our economy – ie: like looking at your spending vs your take-home pay.
7. Who owns our country? How do you feel about that?
8. The debt justa keeps on growing. We must fix this NOW!
9. Summary of principles for budget proposals – truth vs the demogogery
10. Two looks at the 2009 Republican proposal – THAT’S LAST YEAR FOLKS!
11. Subtitle
12. Slices of the pie
13. KEY SLIDE – check the two dashed lines – “Historical Spending” and “Historical Tax Average”. Notice that we’ve been on this track a long time those two numbers MUST swap.

Here’s one last reference for you. An article by David Ranson was published in the May 17, 2010 Wall Street Journal about what the maximum possible EFFECTIVE tax rate – that is how much can the government actually collect? The point being that when taxes are raised beyond a certain point, people change behavior and/or move.

The report’s net is

“The nearby chart shows how tax revenue has grown over the past eight decades along with the size of the economy. It illustrates the empirical relationship first introduced on this page 20 years ago by the Hoover Institution’s W. Kurt Hauser—a close proportionality between revenue and GDP since World War II, despite big changes in marginal tax rates in both directions. “Hauser’s Law,” as I call this formula, reveals a kind of capacity ceiling for federal tax receipts at about 19% of GDP.”

Now, look again at the last chart of Ryan’s presentation and you’ll understand why the dashed lines are where they are. And you’ll further understand that the ideas of solving our problems through taxation are the pipe dreams of fools or knaves – fools if they actually believe what they say; knaves if they can actually do simple arithmetic and are, therefore, simply lying.

Read it here