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Thinking Conservatives Oppose Paul Ryan’s Fiscal Irresponsibility

April 10, 2011

Bruce Bartlett and David Frum are two conservatives who understand just how ridiculous and insincere the Paul Ryan budget plan really is.

Bartlett nails the disfunction in mainstream conservative thinking about budgetary issues:

Conservatives dogmatically believe that taxation is the single most important factor in economic growth, and the lower taxes are the better. But if that were the case, then the late 1990s should have been a period of exceptionally slow growth: Federal taxes averaged 19.9 percent of GDP from 1997 to 2000. In fact, that period was among the most prosperous in American history, with real GDP growing an average of 4.5 percent per year. By contrast, during the last four years, federal revenues have been exceptionally low, averaging just 16.5 percent of GDP. But growth averaged less than 1 percent per year.

Ryan based the math in his plan on some flawed analysis by the Heritage Foundation (go figure). As Bartlett points out, the Heritage numbers have been widely rejected by sensible economists. Even Heritage has removed them from its website:

A number of respected public finance economists quickly ridiculed the Heritage numbers as grossly implausible. MIT economist Jonathan Gruber said, “The Heritage numbers are insane.” In response to such criticism, Heritage simply deleted some of the more extravagant figures from its analysis.

He concludes by pointing out that Ryan’s plan is anything but courageous.

Distributionally, the Ryan plan is a monstrosity. The rich would receive huge tax cuts while the social safety net would be shredded to pay for them. Even as an opening bid to begin budget negotiations with the Democrats, the Ryan plan cannot be taken seriously. It is less of a wish list than a fairy tale utterly disconnected from the real world, backed up by make-believe numbers and unreasonable assumptions. Ryan’s plan isn’t even an act of courage; it’s just pandering to the Tea Party. A real act of courage would have been for him to admit, as all serious budget analysts know, that revenues will have to rise well above 19 percent of GDP to stabilize the debt.

After acknowledging that Ryan’s plan isn’t a serious stab at the budget, Frum explains its purpose:

These days, Americans over 55 vote heavily Republican. Under-55s lean Democratic, under-30s overwhelmingly so. (That’s the reverse, by the way, of the situation that prevailed as recently as the 1980s). Farmers vote Republican. Medicaid recipients do not. The deficit grows because the deficit reduction plan includes a big additional tax cut to upper-income taxpayers. And so on.

And the message Ryan is sending:

The real message of the Ryan plan is: Upper-income tax cuts, now; spending cuts for the poor now; more deficits now; spending cuts for middle-income people much later; spending cuts for today’s elderly, never.

Jobs first, deficit later is actually the right timing of priorities. But the upper-income tax cuts of 2001 and 2003 markedly failed to translate into higher incomes for ordinary Americans. The Ryan plan offers no reason to hope that another round of the same medicine will deliver better results.

I get so tired of the beltway media bleating on about how serious and courageous Ryan’s plan is. In the real world, it is nothing of the kind. It is a cowardly example of partisan pandering that

  • has no chance of passage
  • will not reduce the deficit
  • cuts services to the needy
  • gives away billions to millionaires

If his plan ever were to become enacted, it would wreck the economy in pursuit of pure ideology. Ryan is objectively [pun intended] in love with the puerile drivel that forms the basis of Ayn Rand’s incoherent scribblings. That alone should tell us that he’s unqualified to hold any position that has anything to do with finance or government policy.

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From → Economy, Politics

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