A Paul Ryan Profile in the New Yorker

August 5th, 2012 at 9:57 pm

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 WI.

Note this quote toward the end of the NY’er 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 GW 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, GW 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 R’s 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).

 

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7 comments in reply to "A Paul Ryan Profile in the New Yorker"

  1. wkj says:

    More poetically stated:

    “There are two novels that can change a bookish fourteen-year old’s life: The Lord of the Rings and Atlas Shrugged. One is a childish fantasy that often engenders a lifelong obsession with its unbelievable heroes, leading to an emotionally stunted, socially crippled adulthood, unable to deal with the real world. The other, of course, involves orcs.”

    http://kfmonkey.blogspot.com/2009/03/ephemera-2009-7.html


  2. John Nail says:

    Maybe it is not so much intellectual laziness, which it is, as Ryan’s sole educational qualification of. BA from Miamimof OH.

    To put your great column in a nutshell, “In the land of the blind the one eyed man is king”

    The republicans are the land of the blind and Ryan a one eyed man with good hair.


  3. Jeff says:

    Both sides of the fiscal debate point to the other and say that since things aren’t yet fixed, the other side’s ideas are failures. Intellectual honesty would reveal that the problem lies in the vitiated functioning of government that accounts for widening income disparity (lobbying, special interest spending and tax breaks, poorly conceived regulations and ineffective regulators – all exhibiting lack of objectivity and significant dysfunction).

    Our local government has tried to control spending for decades. Not until the state mandated a cuts in property taxes (which fund the cities) did spending cuts actually happen at the local level. Hand-wringers said that such massive (30%) budget cuts over three years would decimate education and make the world unsafe by reducing police and fireman by one-third. Guess what, forced budget cuts caused prioritization of spending and with police and fire cuts, no new crime of fire danger emerged and the kids still go to schools.

    I am not suggesting 30% cuts at the federal level, but I imagine a two-year across-the-board budget cut totaling 10% would reveal that the sky would not fall and priorities would become much clearer. Mind you, such across the board cuts would also make it more difficult for politicians to provide the special interest law-making that started 30+ years ago and continues to do the most to explain income disparity.

    As to the concern that this would hurt the economy – of course it would, but temporarily like it did after World War II. We would emerge stronger and with an economy that would be vibrant enough to add jobs quickly. We have bought time with the stimulus – averting the panic made sense. It is now time to take the medicine so we can get better instead of trying to avoid a hangover via further alcohol. (If a deflationary tone emerged, then we could change course, but we have to start somewhere.)

    We need a leader that tells the American people to buck up and work hard and we will get through this tough time. Instead we get a dangerous tone from Washington that if your life is not going well, no need to try harder and seek to take care of yourself because the deck is stacked against you and Washington will work to supply what you need. How depressing. Can you see the logical conclusion of this line of thinking? It will not be growth, neither will it be an increased standard of living. Initially, people might like the relief that suspension of responsibility brings, but consequently will feel resentment when they realize that they really weren’t helped in a lasting manner but end up with a more dangerous federal debt/tax burden; such a plan only helps the cynical politicians in the short run get re-elected.


    • Alex A says:

      Unfortunately we don’t have the stimulative effects of a WWII to precede any future cuts now do we. Cuts in education too huh? The kind that have us outside the top ten in the world in reading and science? Why does everyone want it to be a morality play? Just look across the pond to see how well taking our medicine in the midst of a depression works out. Personally I appreciate the govm’t aid that I’ve received in my life like the EI tax credits and pell grants that allowed a poor first generation college student like me to afford an undergraduate education and eventually medical school. Hard to call that depressing or not lasting…


  4. Nick Batzdorf says:

    Excellent article. I’ve been reading your blog for quite a while, and this is the best one yet.


  5. Mike Trant says:

    Thank you Jared,as always.

    It is a downright shame, not to say a sad indictment of the current state of our polity, that the pronouncements of one Paul Ryan can even be considered “intellectual”.


  6. Allen says:

    Jared — thanks for this thoughtful (and very timely!) post. I have a sense that the Democrats are going to fare very well in this election because Ryan’s proposals are out there in great detail for the media and the public to scrutinize. I have a gut-level feeling that middle class Americans are getting smarter and that they’re not going to vote against their interests as they have done many times over the last 30-40 years.

    -Allen


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