The New Yorker's Ryan Lizza provides a profile of Rep. Paul Ryan, with a rich discussion of his vision for limited government.
It's a good read, but it left me thinking about what it is that troubles me most about Rep. Ryan, an earnest guy who's come a long way and influenced a lot of people at a relatively young age. The problem is his numbers don't add up. And that's a particularly big problem for a celebrated budget wonk.
It's actually not hard to write down plans that purport to quantify Ayn Randian visions. You cut deeply here and there -- always from 30,000 feet up so you don't have to get into fights about specifics -- you turn big programs over to the states (e.g., you "block grant" foods stamps and Medicaid), you privatize social insurance, you voucherize Medicare with vouchers whose costs lag prices.
Then, in the spirit of another Ryan hero, Jack Kemp, you write down a bunch of supply-side tax cuts.
But the problem with all that is obvious, and here Ryan is guilty of that which he accuses his adversaries: intellectual laziness. Ayn Rand was a philosopher, a novelist. She never worried about public infrastructure, retirement security, budget deficits. Kemp's trickle down ideas, still promoted today by the likes of Art Laffer and Larry Kudlow, not to mention Gov. Romney, have never come anywhere close to working. They've led not to balanced budgets and broadly shared growth, but to larger deficits and greater income concentration.
It's thus no more plausible nor responsible to tout such an unrealistic vision from the right than it would be for an American politician to proclaim his allegiance to the ideas of Karl Marx and write down plans for confiscating wealth and socializing the means of production.
Moreover, and this is really pretty inevitable, when you learn a bit more about the politicians who write down and support plans like Ryan's, it turns out that the federal government has played and continues to play an important role in their district and state, as has very much been the case with Ryan in Wisconsin.
Note this quote toward the end of the New Yorker article, where Ryan asserts:
"Of course we believe in government. We think government should do what it does really well, but that it has limits, and obviously within those limits are things like infrastructure, interstate highways, and airports."
I guarantee you that Rep. Ryan would place programs to serve vets within that circle along with food and water safety, law enforcement, border patrols, and countless other measures. But his budget disallows their existence.
It's in this regard that Ryan's work suffers from the same problems as Mitt Romney's (in fact, Gov. Romney has praised and emulated Ryan's fiscal approach): there are deep, loosely specified spending cuts, matched with large, regressive tax reductions whose cost is to be made up with closing unspecified loopholes.
But in real life, the government will continue to play a larger role in our lives than the plans imply, the unspecified loopholes will turn out to be both politically unassailable and not large enough to offset the tax cuts,* and thus the deficit will only grow larger, as it has under other Republicans, like Reagan and George W. Bush, who proclaimed similar visions of limited government and trickle down.
On the first point -- the magnitude of government's role -- here's a piece of CBPP's analysis on the Ryan budget that is a central focus of the New Yorker piece:
House Budget Committee Chairman Paul Ryan's new budget plan specifies a long-term spending path under which, by 2050, most of the federal government aside from Social Security, health care, and defense would cease to exist, according to figures in a Congressional Budget Office analysis released today.
The CBO report, prepared at Chairman Ryan's request, shows that Ryan's budget path would shrink federal expenditures for everything other than Social Security, Medicare, Medicaid, the Children's Health Insurance Program (CHIP), and interest payments to just 3¾ percent of the gross domestic product (GDP) by 2050. Since, as CBO notes, "spending for defense alone has not been lower than 3 percent of GDP in any year [since World War II]" and Ryan seeks a high level of defense spending -- he increases defense funding by $228 billion over the next ten years above the pre-sequestration baseline -- the rest of government would largely have to disappear. That includes everything from veterans' programs to medical and scientific research, highways, education, nearly all programs for low-income families and individuals other than Medicaid, national parks, border patrols, protection of food safety and the water supply, law enforcement, and the like. [my bold]
And then there are the supply-side tax cuts -- again, from CBPP:
Even as House Budget Committee Chairman Paul Ryan's budget would impose trillions of dollars in spending cuts, at least 62 percent of which would come from low-income programs, it would enact new tax cuts that would provide huge windfalls to households at the top of the income scale. New analysis by the Urban-Brookings Tax Policy Center finds that people earning more than $1 million a year would receive $265,000 apiece in new tax cuts, on average, on top of the $129,000 they would receive from the Ryan budget's extension of President Bush's tax cuts.
And taxes would actually go up slightly for low-income families.
Am I suggesting that none of this could ever happen? Well, George W. Bush was certainly able to push through highly regressive tax cuts, which are still screwing up budgets and politics (they're a main factor in the fiscal cliff we're barreling towards), and Romney doubles down on them, so I'd never-say-never on this part of the agenda.
The spending cut part does seem highly unrealistic, as a) even Tea Partiers, it turns out to no great surprise, highly value Medicare, b) even small cuts that affect members' districts become cherished when they're actually on the chopping block, and c) you really can't run a modern advanced economy without federal investments in public goods like infrastructure and education, not to mention innovation (like the Janesville Innovation Center in Ryan's district, supported by a $1.2 million grant from the federal government).
But that doesn't mean Republicans led by Ryan won't continue to go after a lot of stuff they don't like, things like low-income programs without powerful constituents (Ryan: the safety net has become a hammock!).
The moral of the story is to beware of politicians pumped up on ideological visions stoked by novelists and fairy tales about how slashing taxes and spending sets us free. The world is more complicated than that. Our economic challenges will never be resolved by those who pledge never to raise taxes or spending any more than it would by those who pledge never to cut them.
And especially don't be fooled if they happen to possess the numeracy to write their ideas down in budgets. Their numbers just don't add up.
* This point was a key finding of the TPC's work (link above) on the Romney tax plan, but they noted that Ryan's plan suffered from the same shortcoming (see footnote #3).
This post originally appeared at Jared Bernstein's On The Economy blog.
Follow Jared Bernstein on Twitter: www.twitter.com/@econjared
"...Mr. Ryan isn’t the only emperor who turns out, on closer examination, to be naked.
http://www.nytimes.com/2012/04/09/opinion/krugman-the-gullible-center.html
Just one example from the CBPP "analysis" of Obama's first budget and Ryan's plan:
In describing Obama's budget, the CBCC says it provides...
".... relief from the alternative minimum tax (which Congress routinely provides so that the AMT does not ensnare tens of millions of middle-class taxpayers)"
In describing Ryan's budget, the CBCC says it...
".... eliminates the Alternative Minimum Tax (AMT), which was established to ensure that all high-income taxpayers pay at least some minimal amount of tax"
The fact of the matter is that BOTH plans ensure that the AMT does not "ensnare tens of millions of middle-class taxpayers".
In reality,
"By not indexing the income threshold used to calculate the AMT, this higher tax is now hitting more and more people further down the income ladder."
"So it’s no wonder that politicians of all stripes are vowing to provide AMT relief. But fixing the problem turns out to be much more difficult that just eliminating it. That's because scrapping AMT also means eliminating a “stealth tax” windfall that Congress and the White House have already factored into their budget forecasts."
http://www.msnbc.msn.com/id/18139350/#.UCKQ-1K69xU
That will result in a very close scrutiny of his ugly budget, right up to the election.
That budget is a concrete example of what the Greedy One Percent wants to perpetrate on this country, and voters should be able to look and decide for themselves.
If Obama is smart he will take advantage of this gap between what Republican policy makers think and what voters actually support, and make the Ryan budget the centerpiece of the campaign.
They can't be bothered with us. They refuse to be bothered by us.
I can no longer be bothered with them either. Vote them out!!!!!!!!!!!
The problem has not been that we haven't had enough money coming in. Or more money collected as revenues. The problem is that we have increased our spending even faster than our rising revenues.
Look up Hauser's Law. Tax collection as percentage of GDP has held pretty steady since WWII. It goes up during booms and goes down during busts, but it hovers around 19%.
I am not one of the 1% or anywhere near it.
About trickle down benefits.....all I feel is wet and miserable from being pizzed on.
No one else matters to Mr. Ryan.
Let's face it. There are things the States do better than the Feds just as there are things the Feds to better than the States. It's inefficient and very costly and somebody needs to apply some adult superivison so that these so-called Ayn Randian visions don't become Ayn Randian realities.
One of the big impediments to a national dialogue is the special interests and self-serving bureaucrats working in Washington, who scream bloody murder when you try to consolidate, streamline, or privatize a duplicated government job. We'd all be better off if these blood-sucking leaches would slither back into the Potomac swamps.
Ryan, et. al. know that the States and local governments, with the help of their allies on Main Street, can solve many problems better than the Feds.
The Feds don't build roads or fix potholes; run airports; educate kids or pick up garbage. They don't swim, fish, boat or drink the local water. The Feds need to keep their noses out of the things they neither do nor do well. We're already struggling with bills to pay the locals to do those things.
We don't need to also be paying the Federal Protection racketeers on top of our current expenses.
Yes, they do.
".. run airports;"
Yes, they do.
" educate kids or pick up garbage."
Yes, they do.
" They don't swim, fish, boat or drink the local water."
Without the Clean Water Act, you would be drinking sewage.
I'd rather not go back to that.
Communism is the best example of supply side economics. And the best example of why it is so bogus!
A free market system revolves around demand, not supply. Without demand, supply is irrelevant.
And economic systems are never really a matter of "one or the other" extremes. There's a spectrum between those extremes, and pretty much every country on earth (with all kinds of systems of government) falls somewhere along the middle of it, not at one end or the other. IOW, we all have mixed economies. That's just reality.