Wednesday, March 21, 2012

Ryan under assault...for moderation

Paul Ryan's latest budget proposal--released yesterday--is taking some serious flak. Left-leaning pundits are falling all over themselves in their efforts to decry it.

Dana Milbank at the Washington Post says it hurts the poor and calls it Orwellian and Dickensian in nature. Jonathan Cohn at the New Republic says Ryan's claims about the budget are dubious and dishonest, even morally bankrupt. White House spokesmodel Jay Carney plays the typical class warfare card in criticizing Ryan's budget:
It is "essentially a shift of money from the middle class, seniors and lower-income Americans, disabled Americans, to the wealthiest Americans, the wealthiest among us," said White House spokesman Jay Carney.
Chris Edwards at the Cato Institute has taken a hard look at Ryan's latest budget, as well. This bullet point is particularly instructive:
As a share of GDP, the Ryan budget would trim outlays from 23.4 percent this year to 19.8 percent by 2022. That reduction would simply get spending back to around the normal historical level. And note that spending would still be higher than the 18.2 percent achieved in the last two years under President Clinton.
The "spending as a share of GDP" metric is the favored one for many economists, policy wonks, and politicians when it comes to long term analysis of federal debt. The basic idea is that there is a workable range here, wherein federal debt would not increase since spending follows revenues based on economic growth. Look at this chart:

See how--starting around 1980--spending started to stay consistently above 20% of GDP (that was Reagan increasing defense spending, by the way)? Then the drop in the last years under Clinton below 20%, which was caused not by decreasing expenditures, but by increasing revenues from a booming economy. The new spike in the Obama years has done little to jump start the economy, but instead has merely increased the debt to record levels.

So Ryan's budget would--ten years from now--drop the rate back below 20%. Ten years from now. Not all that radical, is it?

As to the idea that Ryan's budget is hammering the poor, let's remember this chart:

Does Ryan's budget change this reality? In a word, no. When it comes to federal revenues, no supposed "cut" for the so-called wealthy will undo this pattern. That's because the federal government is steadily creating a permanent dependent underclass via the steady growth of entitlement-type programs that--once established--are never eliminated. As Edwards notes at the end of his analysis:
In sum, Ryan’s proposals would make modest reforms to the giant federal welfare state. By Washington standards the Ryan plan is bold, and Paul Ryan certainly deserves his reputation as the sharpest and most energetic budget reformer on Capitol Hill. 
However, there is too much happy talk in the Ryan plan about how failed big-government programs can be made to work better, and not enough focus on terminating activities that are properly state, local, and private in nature.
Exactly right. Ryan's proposals represent quite modest changes to federal spending habits. And those proposals are stretched out over the course of ten years, thus are somewhat meaningless, beyond the current and following year. Which, of course, is no different than White House plans, wherein "savings" all occur down the road, on somebody else's watch.

Our government--like an Ouroboros worm--is steadily eating itself and even gentle attempts to halt the pattern are met with fierce resistance founded on economic ignorance and ridicule. Meanwhile, things simple roll along, with an administration throwing money around at boneheaded "green" energy companies and digging a new debt hole through healthcare reform, with a Senate unwilling to do its Constitutional duty by actually passing a budget, and with a federal bureaucracy that cannot be scaled back in the least and sees itself as absolutely necessary and absolutely due the funds it desires, year after year after year.

Smoke 'em if you got 'em.

Cheers, all.


  1. So true about the rediculous number of unnecessary federal bureaucratic positions, except for mine and my wife's of course, which clearly are absolutely essential to the continued well being of the free world. :)

  2. Yes, that goes without saying... ;)