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Vice presidential debate: 5 (and a half) economic battles Biden and Ryan will fight

Vice President Joe Biden and Vice Presidential Candidate Paul Ryan

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Joe Biden and Paul Ryan will get their big chance tonight to duke it out for their respective tickets as the Presidential campaign enters its final weeks.

Gaffe-prone Vice President Joe Biden and buffed-up Republican VP nominee Paul Ryan will trade barbs Thursday in the Bluegrass State. The garrulous, off-the-cuff Biden, 69, will likely offer vivid contrast with his much younger opponent, who at 42 is the wonky wunderkind of Congress.

Biden has run for President a couple of times, and his expertise is in foreign policy. Ryan has a reputation as a number-cruncher who can drill down into the weeds of economic policy. Given that the country still has not shaken off the Great Recession, it is reasonable to expect the two men to lock horns on economic issues. Here are five-and-half ones they'll most likely tackle.

Medicare and Medicaid. In his "Path to Prosperity" 2012 budget proposal, Ryan and the GOP proposed a radical — and there's really no other way to describe it — reform of government-supported health care for the elderly and the poor. The end result of Ryan's plan doesn't look terribly extreme, but by turning Medicare into a voucher system — in theory, giving seniors control over their own health-care choices — the Congressional Budget Office estimates that seniors could end up paying thousands of dollars more in health care expenses on a yearly basis. The White House also proposes to reform Medicare, via the Affordable Care Act. Both plans target the same problem: Swelling future Medicare costs threaten to render the entitlement insolvent.

Biden is not a young man, so he can speak for the elderly, who get very, very concerned when politicians start meddling with Medicare. Ryan will have to defend his reforms, which put him on the map as a congressman but have so dogged the Romney campaign that Mitt Romney has had to consistently distance himself from it. 

Ryan's proposed Medicaid reforms were, in many respects, more radical than his Medicare plan. His budget would take it away from federal control and turn it into a system of grants to the states, which would then administer it. Proponents say that this would enable the poor to get care more efficiently and save the federal government money. Opponents can argue that Ryan's reforms would turn Medicaid into 50 different plans, managed according to state politics. 

Biden was an adult when Medicare and Medicaid were created, as part of Lyndon Johnson's "Great Society" expansions of the New Deal. Ryan wasn't yet born. So you'd expect Biden to be able to speak to what life in America was like before Medicare and Medicaid. For what it's worth, Biden is also rather less than rich — he gets by on his income, with no significant investments. Ryan, on the other hand, has a net worth of about $4.5 million. 

Jobs. Probably should have led with this one, but there's no doubt Biden and Ryan will tangle over health-care reform. The jobs situation has improved over the past few months, with the headline unemployment rate dropping to 7.8 percent. But unfortunately, the U.S. economy under Obama hasn't grown fast enough to restore something that even vaguely resembles full employment, which economists define as 4-to-5 percent. Biden was right there with the President, so here's where Ryan is going to go on the attack. Biden could defend by saying that the Romney/Ryan plan to add 12 million jobs over the next four years isn't very ambitious — that only works out to 250,000 new jobs per month, well below the 350-400,000 needed to lower the unemployment rate. 

The debate over jobs will allow Biden and Ryan to segue into...

Taxes. The deficit will come in a minute. Ryan will argue that the Obama plan to increase taxes on wealthy Americans will crush job creation and take money out of the hands of the people who are going to invest in the country's future growth. Biden could counter by arguing that when the wealthy have their taxes cut, they tend to save the gains rather than spend them, so whatever job creation Romney and Ryan expect is an article of faith rather than anything that rests on sound economic fundamentals: "Cut them and they will spend." Biden and Ryan could wind up agreeing about cutting corporate taxes, which are pretty high by global standards in the U.S. Corporations are also sitting on a huge pile of cash right now — around 11 percent of U.S. GDP, or $1.7 trillion. A tax cut could induce big companies to spend, rather then relying on tax cuts for the rich to trickle down into the economy.

The deficit. The issue is pretty straightforward. The deficit is $1.3 trillion and was run up because demand collapsed during the financial crisis and the government stepped in as the spender of last resort. Romney and Ryan think it will get worse and want to reduce it by cutting spending. But they also want to cut taxes, so it's unclear how they'd make up the difference. Obama and Biden want to cut spending — but not so much that the stimulus on jobs growth will be lost or growth will slip and tip the economy into recession — and raise taxes on the wealthy. Ryan will talk about how reckless spending will wreck America, while Biden will insist that Romney and Ryan are proposing more of the same-old, same-old. 

And the half battle ... it's for the zingers! About the best that Biden can hope for from Ryan is that maybe he brings up Ayn Rand, the controversial author of "The Fountainhead" and "Atlas Shrugged." Rand is the objectivist philosopher and atheist who counted former Federal Reserve Chairman Alan Greenspan among her acolytes. Channeling the Dan Quayle-Lloyd Bentsen debate, it could go something like this:

Ryan: I am a fan of some aspects of Ayn Rand's philosophy —

Biden: [Interrupting] Congressman, I don't know who this Annie Rand is and I never met the lady although when I getting ready for tonight this kid on my staff tried to get me to read a few things about her and I said, "Whadday takin' about, kid? I was born ready for this sucker!" and Congressmen, I'm sorry, but you're no Jack Kennedy.

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