When I first heard of this plan I tthought it was to cut spending by a paltry 1 percent. Thanks to this post, I now know that it cuts spending by 1 percent of GDP. That makes more sense to me now. It’ll work fine until the government starts cooking the books as to what GDP really is...like they are currently doing with inflation.
I thought Rand Paul said 1% of every federal dollar - not 1% of GDP.
Hmmm
Nevertheless this is the only plan I’ve heard of that would actually solve our problem - which means the rats would never allow it.
I heard him on Hannity.
The explanation is that it finally does away with the “Base Line Budget” that assumes 7% increase per year.
So by eliminating the built in 7%, and then subtracting 1%, it adds up to big cuts.
If we start with $3.7T and use the two accounting methods we get:
Year 1 $3.663T vs. $3.959T (saving 0.296T)
Year 2 $4.236T vs. $3.636T (saving 0.610T)
Year 7 $3.449T vs. $5.941T (saving 2.493T)
This ads up to a total saving over 7 years of 9.377T
It really adds up fast when you eliminate the baseline budgeting.
I don’t know how it impacts guaranteed paying programs like Social Security, etc.