Paul Ryan Most Overrated Politician?
The media has anointed him a policy wonk. But none of his numbers add up.
U.S. Congressman Paul Ryan
In the fall of 2010 the Federal Reserve was considering another round of “quantitative easing,” a mechanism intended to boost the economy out of the Great Recession. By then the interest rates were as low as they could go and the Fed had no other tool to prime the pump. And so it injected another $600 billion of new money into the economy by buying up long-term debt.
This brought a protest from Republican congressman Paul Ryan, reported by the Milwaukee Journal Sentinel. As the story noted, the Fed’s actions were likely to be particularly helpful to district’s like Ryan’s, which “includes three of the highest unemployment areas in the state, all with 10% unemployment or higher: Racine; Kenosha, where Chrysler shut an engine plant last month; and Ryan’s hometown of Janesville, where General Motors shuttered an assembly plant two years ago. The state’s only metro area with higher unemployment is Beloit, at 14.4%, which borders Ryan’s district.”
“I won’t dispute that a cheaper dollar can help boost exports in the short term,” Ryan said. “But I don’t think it’s a good tradeoff to do so at the expense of inflation…Inflation is a killer of wealth. It wipes out the middle class.”
Inflation? Ryan was actually worried about inflation? He was speaking not long after the nation had its lowest level of inflation in more than half a century. The rate had actually been negative in 2009, at -0.34 percent.
As for the horrible impact that would come from quantitative easing, since the Fed began this technique in 2008, the rate of inflation has risen by an average of 1.6 percent in 2009-2012 and so far has been continuing at the same rate in 2013.
Nope. Because the consensus narrative in the mainstream media is that Ryan is a “policy wonk,” as he’s typically described, a “serious-minded policy expert,” as USA Today has dubbed him, a “top wonk and budget tutor” (Associated Press), a policy “man of ideas” (Wall Street Journal editorial page editor and Green Bay native Paul Gigot), with “budget ideas that are thoughtful and serious” (Time magazine), and “the most comprehensive and most courageous budget reform proposal any of us have seen in our lifetimes” (New York Times columnist David Brooks)
Is it something about Ryan’s pedigree, is he perhaps a Harvard Business School grad? Nope, he has a bachelor’s degree in political science and economics from Miami University in Ohio. Has he authored some highly technical bills that have refashioned our economy? Nope.
Partly the reputation may have arisen from reporters who have bought Ryan’s description of himself as more a policy man than a politician. But mainly he’s won this wonkish repute for his economic “road map” for the future, released a couple years ago, and re-released recently with few changes, with the title, “The Path to Prosperity.”
In theory, Ryan’s proposal is intended to provide a solution to an alleged long-term debt problem the nation faces. The notion itself is debatable, since the debt, as a percentage of the Gross Domestic Product, is not that high by historical standards. “What we’re talking about is a debt-service burden roughly comparable to that under the first President Bush,” columnist and Nobel Prize winning economist Paul Krugman has noted. “How many of the people now warning about the impossible burden of currently projected debt were issuing similar warnings back in 1992? Not many, I’d guess.”
But if the idea is to cut the debt, Ryan goes about it an odd way. He does propose spending cuts, but as an analysis by the Center on Budget and Policy Priorities has found, Ryan also proposes a series of huge tax cuts “that would cost nearly $6 trillion in lost federal revenue over the next decade.” That includes cutting the top individual tax rate to 25 percent from 39.6 percent, repealing the Alternative Minimum Tax (designed to ensure that high-income people pay at least a minimum level of tax) and cutting the corporate tax rate to 25 percent (from 35 percent) and taxes on corporations’ foreign profits.
A wonk or even slightly serious man would surely explain where this $5.7 trillion would come from. Ryan does suggest revenue can be gained from closing tax loopholes, but offers not one example. The biggest loopholes, in terms of potential revenue to be gained, are the deductions for mortgage interest and charitable donations, but they are politically popular, and unlikely to be eliminated. But even if they were, how much money could thus be raised, and what would be the impact on the economy? Those are important questions, but this serious man of ideas can’t be bothered to address them.
There is nothing subtle about this proposal. As a story in Investors.com notes, “the entirety of federal spending outside of Social Security and interest on the debt… would shrink to 11.2% of GDP, a level not seen since 1948 — before ObamaCare, Medicare, Medicaid, NASA, the interstate highway system and almost before the first baby boomers were born. That is nearly 25% below the 14.6% of GDP average over the past 64 years.”
It goes without saying that this, too, is completely impractical politically and will never be supported by the American people or Congress. But that’s almost beside the point as Ryan never goes through the countless programs in the federal budget, itemizes the costs and proposed cuts and considers their practical impact. He gives us no reason to think these cuts are anything but a fantasy.
As Washington Post columnist Ezra Klein (who, as it happens, writes the Wonkblog) has noted, “fully 59 percent of Ryan’s savings come from new cuts to Medicare, Medicaid, Obamacare or other health-care programs… The nonpartisan Kaiser Family Foundation estimates that cuts on the order of what Ryan is proposing will mean around 35 million people lose their health-care coverage.”
Typically two things happen when people don’t have health care coverage: they get ill (and sometimes die). And they also show up at emergency hospital departments, resulting in the most costly care possible. How exactly does this save money on the cost of medical care?
Then there is the fact that Ryan’s plan eliminates Obamacare but claims the $716 million in savings it generates. That slippery style of budgeting was criticized by Democrats, the media and even some conservatives during the recent presidential election, but an undaunted Ryan once again included it in his latest budget plan.
If this is a “road map,” it is one that’s missing most of the cities, highways and exit numbers. If this was a college research paper, it might win a grade of “incomplete.”
It is not a serious budget proposal, but a rhetorical document, a work of ideological zealotry. As many have noted, the tax and spending cuts would create a massive income shift of money from the middle and lower classes to the upper class and corporations. Ryan can perhaps be praised for the courage of his convictions, but not for producing a serious budget proposal.
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You make a compelling argument, but to answer your title question, I’d say, “Not while Scott Walker holds office.”
Bruce,
How can you NOT look at debt service as part of federal spending? The whole point that Ryan tries to make is that our debt is getting out of control and even if we can afford the debt service now, what happens when interest rates go up? The fact is that Social Security and our debt service will help (and largely cause, along with medicare) make our federal budget unsustainable. You can’t just cherry pick those numbers and ignore what the issue itself is all about.
When you site that debt service is roughtly comparable to the early 90’s, that’s only comparing what we pay for our debt… right now our debt to GDP is almost double (60-65% of GDP in 94-96ish, to over 100% of GDP in 2012). What happens if interest rates rise to the levels of the early-mid 90’s? That’s right, debt service would nearly double as well.
And I for one wish Ryan was right about the inflation concerns… because what kept inflation from going up more then it did? The poor economy! If he was right, that would mean our economy was back on track, people would be working again, and our economy can once again be robust and prosperous. I suppose your position is: “Thank goodness the economy ramained bad and kept inflation down, because now I can show everyone how wrong Ryan was.”
I am not even going to read the article..Slime, such as yourself, is what is wrong with todays culture. Lack of education is evident and the dumbing down of America is strong, where you sit…. Milwaukee is your answer to what is right..?
I feel for ya bro..
Batten down the hatches, Badgers, the flacks are out in force. It all happens when a ray of sunshine penetrates the Ryan speciousness. How much of our debt service is due to the Bush wars?
This is just an awesome piece.
“How much of our debt service is due to the Bush wars?”
Obama added more to the national debt in about 3 years then Bush did in two full terms. Bush certainly did his part to add to our debt, but it’s only a fraction of what Obama (who promised to half the yearly deficit, but instead more then doubled it) did.
Really though it doesn’t matter how we got here, it’s a matter of recognizing that it is a problem and actually doing something about it.
To say this is an “awesome piece” is ridiculous. If your household debt got to a point where you could no longer afford the interest on your debt, would you shrug that off as no big deal? I’m guessing not… just because we can afford the debt service *for now* doesn’t give us carte blanche to spend ourselves deeper into a hole.
He loves Jesus and babies. Nothing overrated about that. You just can’t appreciate intellectual heavyweights like Paul, Scott, Rush and Sarah. Who you going to beleive, some godless Nobel prize winner or a faithful family man. Nuff said
@Andy,
You just regurgitated my favorite and wrong talking point that has been spouted for years.
What happens when normal government spending stays the same between ’07-’12 and tax receipts decline?
My second favorite talking point is to compare household debt and government debt.
John G – Nominal spending by the government did not stay the same from 2007-2012… Fed spending has been over half a trillion dollars higher per year in the last 4 years, and that’s even WITHOUT the war spending that bush had. Because we’re no longer spending the mass amounts of money on the iraq and Afghan war’s, if we did not see the vast amounts of increased spending the last 4-5 years, we’d now be at a near balanced budget (that’s taking inflation into account).
And comparing the gov. debt to household debt is the only way to help many people understand the situation. Don’t blame me for that… blame the general lack of understanding by the general public.
Reader.. Winning a Nobel Prize does not make one an expert. Yasser Arafat won the Nobel Peace Prize and he was a terrorist. Save me the intellectual heavyweights tripe as you come from the party of Gwen Moore, Tom Barrett and Crazy Uncle Joe Biden. John G. what are some of your other favorite talking points?? I can not wait to hear them. Let me guess…17 trillion$$$ is not a lot of money, It’s Bush’s fault, If the rich paid their fair share we would not have this problem… Murphy is blinded by his radical leftist leanings and is incapable of writing anything other then hit pieces on Republicans or Conservatives. It makes for entertaining reading sometimes but rarely has any substance or more importantly, relevance.
Ok Ok….I would like to buy a place in the east side…..Would you co-sign for me please? I would gladly pay you back in a years time. 500,000 should get me a decent place, but then make it a million. I would be good for it. You have my word on it. I will be waiting for my money soon…. Also , thanks , your a gem
Andy,
If Ryan were serious about cutting the deficit, why would he be proposing cutting taxes? If he really believed the deficit was our most serious problem, wouldn’t he copy Clinton’s action and propose raising taxes? That inconsistency would seem to support the suspicion that the real agenda is an income shift from poor and middle class people to wealthy people.
When the first Ryan budget, I tried to find a copy on the web. I never found it. What I did find was a propaganda piece with a few tables in the back. There was no explanation for the tables, no discussion of the assumptions that went into them. For example, despite tax cutting, the assumed that federal revenues would rise. I haven’t looked at his latest iteration, but it appears to be much of the same.
Mr. Thompson,
While Bill Clinton raised marginal tax rates on ordinary income he also lowered the rate on capital gains from 28% to 20% and introduced quite a few tax credits like the Hope Credit, Child Credit and some others. Clinton also essentially eliminated the taxation on the sale of ones home. He also passed some free trade stuff that would have a real hard time getting any support from the left in today’s world and did have the good fortune of being President as a completely new industry emerged (the internet).
Mike,
I don’t want to get into an argument about what caused the Clinton boom. My only point is that one must question the seriousness of someone who declares that the deficit is our greatest challenge and followed that up by proposing massive tax cuts. At the risk of repeating what economists call the fallacy of composition (the assumption that what is good for the family budget is good for the national budget), it would be similar to my proposing to solve a budget in my family budget by switching to part-time work.
Bruce T.,
All I am saying is Clinton passed some serious tax cuts (the capital gains cuts were huge) and managed to balance the budget. For what it’s worth I don’t think the budget has to be completely balanced. It’s ok for the government, a household, or a business to have debt so long as it’s reasonable. I think the debate is whether we are approaching or starting to pass that point where the debt is manageable.
Reading this article and the proceeding comments proves my point that we are a nation of economic illiterates.
Mike,
Thanks for your comments. I particularly appreciate your civil tone.
I think there are two separate questions here: (1) is Ryan right in considering the deficit our primary problem now, and (2) is he sincere in his expressions of concern?
I was addressing the latter in concluding that he was expressing his concern oddly by proposing cutting taxes. The only way I can see to square this circle is if still believes some version of the Laffer curve.
As to the first question, both federal expenditures are declining and federal revenues have increased in the last couple of fiscal years. And projections for the next few years show that trend continuing. The question here is whether that is a good thing or act as a brake on the recovery. I tend to think those economists who argue that a greater stimulus would have gotten us through the recession quicker have the better of the argument.
First of all, you have to look at you in the hell balanced the budget during clinton. Is that when the republicans had control? I believe so. When did it start to go sour? when the stupid ass lib democruts gained back control.You also think that cutting capital gains was for the average household? You people need to get some brains. Ho, and by the way, its been only liberals that have killed are kids and commit mass murders…
Is Dean supposed to be satirical?
I will link this piece for two reasons, it is easy to understand, and its hard for people to claim biased partisanship when the author was an economic adviser under Reagan and a card carrying Republican for most of his life. He has come out swinging because of the dishonesty coming out of people like Paul Ryan.
http://www.thefiscaltimes.com/Columns/2013/01/25/Why-Government-Spending-Is-Not-Out-of-Control.aspx#page1
The point to be made is that in times of economic hardship i.e. unemployment above 8% for 4+ years, you have greater outlays of the social safety net, lowered tax receipts, increased savings rates, etc. You know where the largest % growth in people needing government support has been found to be? Demographically poor, white, and Southern….
Supply side economic theory in government has dominated the dialogue since Reagan and I think the end results speak for themselves.
Ryan read Ayn Rand in High School and never got past her delirious selfishness. Of course Ms.Rand still cashed all her Soc. Sec. checks and Ryan got his college education on Soc. Sec. benefits and has had a a gov. job and fat benefits for 97% of of his working life, but he sees no hypocrisy in raiding workers earned and saved S.S. entitlements to bloat the coffers of the rich and the corporations. Ryan is maker….the same way a cow produces methane.
re Dan:
“I am not even going to read the article..Slime, such as yourself, is what is wrong with todays culture. Lack of education is evident and the dumbing down of America is strong, where you sit…. Milwaukee is your answer to what is right..?
I feel for ya bro..”
No comma needed after “Slime.”
Apostrophe needed for “today’s.”
“The dumbing down of America is strong, where you sit” – again, no comma after “strong;” in fact it makes the meaning of the phrase unclear – though even if you had written it correctly, it’s awkward syntax.
I read the article. It didn’t have any usage errors.
Sorry, I said “Dan;” I meant “Dean.” And in your second post, the correct spelling is “you’re” in the phrase “your a gem.”
Murphy is a critic but when has a statue ever been made to honor a critic? Never. You pi$$ into the tent and offer no solutions to what Ryan (and Walker) are doing–and that is leadership.
A Nobel Prize is not what it used to be. You have to be of the liberal persuasion to “win” one, like Al Gore and Obama. Paul Krugman is the smartest imbecile I’ve ever seen–he is just another critic.
Bruce, you got something against Mini-Mitt? Why are you carrying the left’s water on this? You know budget numbers are all imaginary and Ryan can line up just as many “experts” to support his numbers as you can line up against them. Sure, there’s a touch of Harold Hill in Paul Ryan. But that includes the part that doesn’t leave town, that stays and teaches River City how to play the Minuet in G using the “Think System.”
Tim,
The last go around with his budget, the CBO was unable to perform a real analysis of his budget proposal because of the aforementioned unexplained cuts and closed loopholes.
A good summary of trends in the deficit is contained in the Congressional Budget Office’s latest update of its Budget and Economic Outlook (http://www.cbo.gov/publication/43907), revised last month. Some high points: they expect the deficit to fall to 5.3% of GDP this year (about half that of 2009) and 2.4% in 2015. They note that this deficit is higher than predicted in their previous projection from last August because of passage of the American Taxpayer Relief Act of 2012. Although they don’t say, I assume they are mostly referring to making permanent most of the Bush tax cuts.
I think this underlines Bruce M’s point that Ryan’s actions undermine his stance as a deficit hawk.
Harry Balzergood [24] has a point when he asks, “when has a statue ever been made to honor a critic?”
I looked for a statue of Alexander Pope, and all I could find was a statue of Pope Alexander.
Speaking of Popes, let us pray that Mr Ryan sees the light, and decides to heed the words of Pope Francis: “I would like to ask all those who have positions of responsibility in economic, political and social life, and all men and women of good will: let us be protectors of creation, protectors of God’s plan inscribed in nature, protectors of one another and of the environment.” Mr Ryan could make a profound difference in our nation’s ongoing conversation if he would choose to follow the example of Pope Francis who sees his role as someone who “must open his arms to protect all of God’s people and embrace with tender affection the whole of humanity, especially the poorest, the weakest, the least important, those who Matthew lists in the final judgment on love: the hungry, the thirsty, the stranger, the naked, the sick and those in prison.”
“Paul Krugman is the smartest imbecile I’ve ever seen–he is just another critic.”
Another critic of what? The religious conviction that shrinking the state is an unqualified good. Instead of this naming calling why not look at economic growth of other nations. Find one where Paul Ryan theories have worked and then we can have a better conversation.
Bruce Thompson- Way to site a source that explains that the amount of debt and the size of the deficit (while shrinking in the short term) is going to have a very negative impact on the economy in the long term if no policy changes are made.
This is the same thing all the sources sited here have said… short term we will be fine, long term there will be grave negative consequences. This is exactly what Paul Ryan is trying to tell us.
When the info is right in front of us, (see Bruce Thompsons link) why do we ignore it completely? No one is even acknowledging it and arguing against it… it’s just completely ignored. I’m confounded.
Andy, what exactly is Paul Ryan talking about cutting? He has a magic asterisk because Einstein couldn’t even make the math work on Ryan’s “budget”.
Andy, I am confused. You say “short term we will be fine.” But all your previous posts seem focused on the short-term deficit, that caused by the Bush tax cuts and the Great Recession. If your real concern is “long term there will be grave negative consequences,” why are you expressing so much concern about the short-term deficit. As the CBO note, that seems to be declining nicely as the economy picks up.
I agree with you and the CBO that long term is a challenge. But it has very different causes: basically the demographic shift as baby boomers retire and qualify for Medicare and Social Security. So far as I know no one has proposed a plan for dealing with it, although the ACA has some cost controls such as reductions to providers (attacked by Romney and Ryan in the campaign) and a board to examine the effectiveness of treatments (also attacked by Ryan). Maybe I am missing something but it would seem to me that reducing top marginal rates, as Ryan proposes, would make the long-term challenge worse.
This seems like a whole lot of debate over what is essentially a party platform document. Repealing the ACA and slashing the tax rates will never pass the Senate. And on the other side, raising another trillion dollars in revenue and increasing spending another $4.6 trillion dollars isn’t going to pass the house.
As I see it, the debt/deficit issue falls into three categories, and the conversations like this just spin their wheels when no one wants to talk about the same one at the same time.
First, there is the issue that trillion dollar deficits aren’t sustainable. Fortunately, the recovering economy combined with decreased war spending and no more stimulus should help bring that down.
Secondly, there is the fact that if interest rates go up, servicing our nearly $17 trillion dollars in debt will become more expensive. This is part of what is causing so much concern in Europe as borrowing costs increase for countries like Greece, Italy and Spain. There are other issues constraining those nations, such as the inability to just print more money, but most of us like to think that the US government won’t just print a bunch of money making our savings worth less and making even more retirees dependent upon the government as the primary source of income.
Finally, there is the aging population that will put further demands on government programs. No one want to address this on either side of the aisle. Changing the way inflation is calculated is a very slow way to bring down benefits, and isn’t particularly honest with the people who depend upon these programs. Reducing the amount medical facilities and doctors are reimbursed will only make it harder for people on these programs to receive quality care.
There doesn’t seem to be the political will to honestly deal with these issues. Any discussion of trying to reform entitlement programs is immediately met with cries about killing seniors and the poor. Even the 2.3% reduction in spending that was the sequester was deemed to politically unpalatable that it should have never happened. Maybe that will change when the President finally submits his budget, though I suspect we’ll have to see how his bracket plays out before we get to see his budget.
Bruce!
As usual, you are ahead of the game (by my count, at least two-plus years). Check out Dean Baker article (channeling the sagacious Bruce Murphy) that “The media’s obsession with telling us that Ryan is a wonk, coupled with an aversion to telling us anything about where his wonkism takes him, is unfortunately the norm for political reporting.”
http://www.huffingtonpost.com/dean-baker/paul-ryan-wants-to-shut-d_b_8395344.html
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