-
Throw the Book at Him
June 13, 2013 | 196 comments
-
Testimonial to a Great American
June 6, 2013 | 39 comments
-
A Close Call at the Newseum
May 30, 2013 | 7 comments
-
Obama’s Imbroglios
May 23, 2013 | 45 comments
-
My Rahm Reunion
May 16, 2013 | 16 comments
The Current Crisis
The Ryan Budget Is for Everyone
Static scorers need to think dynamically.
WASHINGTON — As America rings up another $3 trillion plus budget — almost a historic peacetime 25 percent of Gross National Product — and borrows another $1.3 trillion to pay for it, one should not be surprised that the usual mob of special pleaders is fuming at anyone who has the temerity to suggest a sane alternative. These are the new Democrats and they do not mind putting us on the road to Greece.
Thus they howled when Chairman of the House Budget Committee Paul Ryan proffered a budget to avoid the Greek Tragedy. His budget contemplates spending reductions of more than $5 trillion over the next decade, cutting deficits by more than $3 trillion, taxes by $2 trillion, and the national debt by more than $1 trillion. It is all part of Ryan’s strategy to lead us to a prosperous and secure future. Ryan intends that these cuts lead to growth, growth more robust than the anemic 2 percent that President Barack Obama would be perfectly comfortable with.
Yet now from the right comes opposition. The right thinks that Ryan has not cut enough. He has slain no government bureaucracies. Some on the right even want him to prove that he is sincere about budget cuts by lopping off a few percentage points more at the Pentagon. Two Republicans, Tim Huelskamp of Kansas and Justin Amash of Michigan, actually voted against Ryan in committee, leaving him with a 19-18 squeaker. If they are joined by enough like-minded Republicans when Ryan’s budget comes to the floor, the Democrats and Nancy Pelosi will by happy. These Republicans will have proved that their party cannot govern.
Ryan is a supply-sider. He advocates one of the few economic innovations in years. He realizes that the budget cannot be balanced without faster economic growth. Sure it would be nice to balance the budget in five years but not with tax increases. Tax increases would only slow down growth. So his budget balances out in 2039, though possibly sooner. Some of the Republicans think that future Congresses cannot be trusted to carry out the cuts that Ryan proposes, certainly not through all the vagaries leading up to 2039. Well, for my part, I think they can. The country has changed dramatically. A new majority of Americans composed of conservatives and independents understands that we have been spending ourselves into the poor house.
The defeat that the Democrats suffered in 2010 was just the beginning. They will lose more seats in 2012 and the White House.
Yet even if I am wrong, we do not have to wait until 2039 for a balanced budget, according to an alternative scenario released by Ryan subsequent to his budget. Ryan’s critics, who claim the budget will not be balanced until 2039, are using the Congressional Budget Office estimates arrived at by static scoring. This means they assume little public response to lower taxes. People will continue to act the same with lower taxes as with higher taxes. But history has shown they act differently. With lower taxes you get growth.
According to Ryan’s alternative scenario, using dynamic scoring, lower taxes and other inducements to growth in the economy will speed up the economy, increasing GDP by as much a one percentage point a year. Thus the Ryan budget lowers the debt to GDP ratio to 50 percent in 10 years. Where it now stands at 74.2 percent of GDP it would decline to 50 percent of GDP. The budget could be balanced not in 2039 but in the early-to-mid 2020s. The Republican critics need not worry. Add to that that Ryan’s budget gets the federal take of the economy down from 24.1 percent of GDP to 19.8 percent in 2021 and you see real change. American need not end in Greek Tragedy. All Republicans and many Democrats need to get aboard the Ryan budget.
About the Author
R. Emmett Tyrrell, Jr. is the founder and editor in chief of The American Spectator. He is the author of The Death of Liberalism, published by Thomas Nelson Inc. His previous books include the New York Times bestseller Boy Clinton: the Political Biography; The Impeachment of William Jefferson Clinton; The Liberal Crack-Up; The Conservative Crack-Up; Public Nuisances; The Future that Doesn’t Work: Social Democracy’s Failure in Britain; Madame Hillary: The Dark Road to the White House; The Clinton Crack-Up; and After the Hangover: The Conservatives’ Road to Recovery.
Letter to the Editor View all comments (34) | Leave a comment
More Articles by R. Emmett Tyrrell, Jr.
More Articles From The Current Crisis
http://spectator.org/archives/2012/03/29/the-ryan-budget-is-for-everyon
Follow us:
ADVERTISEMENT
The Spectacle Blog
Democrat Dan Maffei Blames Budget Cuts for Girl’s Rape, Mother’s Murder
Robert Stacy McCain | 6.18.13
SPONSORED LINKS
FLASHBACK TO: 1995
-
Pope Culture
A man of faith in a godless age is hitting Americans where it hurts.
-
Why the GOP Does Not, Like, Totally Suck
Mr. and Mrs. American Spectator Reader, let P.J. O’Rourke talk sense to your kids.
-
Dames at Sea
-
In the Absence of Guns
In Britain, defending your property can get you life.
-
The Metaphysical Martini
-
Counting the Costs of Clintonism
The debacle of this president’s administration is both a cause and a symptom of the decline of American values. Unless Congress impeaches him, that decline will go on unchecked. An eminent jurist surveys the damage and assesses the chances for the recovery of our culture.
-
Chuck McHagel
It won’t take long for conservatives to scratch this presidential wannabe off their 2008 scorecard.
-
The Legacy of Old John and Mother Fresh-Roasted
-
It’s the Best Time of the Year
The American Christmas, like the songs that celebrate it, makes room for everybody under the rainbow. Is that why so many people seem to be hostile to it?
-
The Bush Crack-Up
Was the President done in by the economy, or by the politics of the economy?
Clip of the Day
ADVERTISEMENT
aware| 3.29.12 @ 7:35AM
A plan even Democrats can support. That ought to tell you all you need to know.
Clint| 3.29.12 @ 8:14AM
" Presidential candidate Rep. Ron Paul (R-Tex.) termed the effort “very disappointing,” in a Tuesday statement. And he’s now been joined by fellow GOP candidate Rick Santorum, who told Glenn Beck later Tuesday that he believed Ryan’s spending plan is a “great blueprint” but he believes “we need to cut government spending faster” than the $5.3 trillion Ryan has proposed slashing over the next decade."
vtwin| 3.29.12 @ 9:46AM
Ryan’s budget proposal is a fraud that would if adopted increase the nation debt and deny medical care to elderly and disabled.
Ryan’s tax proposal to replace the present tax brackets with just two brackets (10% and 25%) is designed to increase the taxes of poorer and middle income Americans to pay for tax reductions for wealthier Americans and will result in a net reduction of revenues to the national treasury.
Medicare which is funded by a separate tax collected on wages has not contributed to our present nation debt which is over $16 trillion. And, replacing the preset Medicare system with a voucher system is another attempt by Ryan and the Republiocns to rob working class Americans to pay for tax reductions for the wealthy.
Retuning our nation to fiscal sanity is going to require BOTH tax increases on incomes that can afford it and responsible budget cuts.
Calvin| 3.29.12 @ 10:33AM
414-0
vtwin needs to call all those liberal Congressman that aren't standing with the President. 0!!!! None. Not even one Democrat. Gosh that is brave. President O is quite the leader. Even his own party won't follow him.
vtwin| 3.29.12 @ 11:18AM
Quinnipiac March 28, 2012:
Florida: Obama tops Romney 49 - 42 percent; Obama beats Santorum 50 - 37 percent.
Ohio: Obama over Romney 47 - 41 percent; Obama leads Santorum 47 - 40 percent.
Pennsylvania: Obama edges Romney 45 - 42 percent; Obama tops Santorum 48 - 41 percent.
http://www.quinnipiac.edu/inst.....ng-states-(fl-oh-and-pa)/release-detail?ReleaseID=1727
Four more years?
Calvin| 3.29.12 @ 11:44AM
You have all the confidence of Jimmy Carter.
vtwin| 3.29.12 @ 11:59AM
And who is playing Reagan,the Echaskech or the man-on-dog-sex?
One if by land...| 3.29.12 @ 12:11PM
You are going to realize one day, probably when the government has finally taken everything you have, to exclude pride because you already have none, that your own foolish beliefs are what led to having nothing. You and your brethren will be the ones begging for food, shelter, safety and money as a result of your lack of self reliance and poor voting.
vtwin| 3.29.12 @ 1:55PM
I’ll “realize one day.”
Romney paid 14% tax on $21.6 million of income in 2010. What tax rate did you pay on your income in 2010?
http://www.mercurynews.com/nat.....i_19807033
Epiphany yet?
Lee Ghume| 3.29.12 @ 3:55PM
Income tax is different from capital gains tax. You must have been riding your scooter too close to the dirty end of the local bus.
1ConservativeUSA| 3.29.12 @ 6:52PM
Your 14% tax rate is false.
As a tax accountant, I know the capital Romney RISKED to generate capital gains was previously taxed to him at 35%.
As a tax accountant, I know the dividend income Romney earned was previously taxed to him at 35%.
You are relying on a false argument, one the media is happy to employ, to gin up the uninformed public's emotions.
The uninformed electorate is president Obama's greatest ally. Waaaaaaaaaaaaaait a minute....president Obama, is this you?!
Thom| 3.29.12 @ 7:12PM
What tax percent did you pay last year? I paid 14.7%, all on ordinary income. You want investment incomes to be taxed like ordinary income then you are voting for investments in this country to go somewhere else.
Calvin| 3.29.12 @ 4:24PM
Carter successfully branded Reagan as he liked. Fortunately Carter was so bad that the country took that chance. The big O is worse. He is Carter on steroids. Transmitt that to Vlad, goofball. 414 - 0. What a leader. The only followers are low IQ trolls who will repeat anything.
JayDick| 3.29.12 @ 2:03PM
I don't know where get your information. Seems to me Ryan's plan will cut taxes for the middle class and increase them for most upper-income people. Many important deductions would be eliminated for upper-income people.
Anyone who wished to stay on the standard Medicare will be permitted to do so. How is that robbing working class people?
What do you call a tax increase? If someone pays more taxes, is that an increase? What if the increase is due to increased income? That does result in more money to the Treasury, you know. On the other hand, rate increases never result in as much additional revenue as the static estimates predict. Tax rate decreases combined with reduced deductions is certain to result in additional revenue far beyond what the static estimates predict.
Ah, but cutting rates is not "fair", is it, even if more revenue is collected. So the real objective is to punish the higher earners, not to raise revenue, isn't it?
vtwin| 3.29.12 @ 2:22PM
With the exception of my misspellings I stand by what I wrote.
idalily| 3.29.12 @ 11:30PM
Yet you provide no counter argument. No facts, no debate, no substance. Just, "I stand by what I wrote." Wow. The critical thinking ability (or lack thereof) of the typical "progressive" never ceases to amaze me. Progressivism is a cult. There is no other explanation for the willful blindness.
vtwin| 3.30.12 @ 4:33PM
What incomes will pay 10% 25%? Ryan’s budget proposal doesn’t say.
What deductions will be eliminated? Ryan’s budget proposal doesn’t say.
What items in the budget will be cut? Ryan’s budget proposal doesn’t say.
Ryan’s budget proposal was passed by the Republicon controlled House with no facts, no debate, and no substance. That is willful blindness.
idalily| 3.31.12 @ 12:45AM
Yeah, let's not present ANY plan or suggest any solutions until all the details are worked out. Is that your strategy? If not, present YOUR plan to get us out of trillions of dollars in debt we are. Go on, if you think you can do better, bring it. I'm listening.
Von Mises Jr.| 3.29.12 @ 10:12AM
"Supply-side" economics is not a new idea that was invented by Art Laffer writing it on the back of a napkin at dinner while working for Reagan. It is simply that it was the first time it was tried in fifty (50) years in America. The "Roaring Twenties" was an example of "Supply-Side" success.
"Supply-side" dates back to at least 1776. A Scot named Adam Smith wrote about it in "The Wealth of Nations." Although Marxism was not concocted until almost a century later, the foundations of Marxism (Rousseau, Hegel, Neitzsche) were being formed on the mainland. Smith was simply saying that "wealth" is created while individual, independent men went about their business of providing for their families through "self-interest." The baker baked bread to buy shoes for his children, and the shoe maker his work to buy clothing for his offspring.
This creates "goods" that are desired and can be traded. That is all "Supply-side" really means, as opposed to the "Enlightenment" unenlightened philosophers who thought they could plan better and create more wealth through "reason."
This flawed thinking cost many millions their lives, and imprisons much of mankind to this day.
Moe Blotz| 3.29.12 @ 3:57PM
Supply side worked in the Plymouth Colony after socialism failed as well.
Thom| 3.29.12 @ 7:16PM
“Socialism” failed at Jamestown too. It cost people their lives there.
Bill| 3.29.12 @ 10:49AM
Ryan Budget is a road map to defeat Obama. Embrace it!
Derek Leaberry| 3.29.12 @ 11:15AM
After thirty and more years following politics, I am quite sure that supply-side politics only fuels big government because it truly does increase revenue. As most Americans and all Democrats desire free things from the government, increasing revenue through tax cuts only increases the welfare state. Furthermore, supply-side economics increases profits for big businesses, fuels Third World immigration which leads to the annihilation of the traditional republic. Hardly a conservative outcome.
fmm| 3.29.12 @ 12:27PM
That is why the government take needs to be restricted as a percentage of GDP or other measurable quantity. Ryan's budget proposal includes this and the Balanced Budget Amendment passed by the house earlier this year does it in spades.
Derek Leaberry| 3.29.12 @ 1:28PM
Republicans can barely be expected to spend less money than the Democrats. They have their favorite pork. Military weaponry and bases in Germany, Japan and Korea twenty years after the Cold War victory. Highways, roads and bridges. Space. Call me skeptical about Republican desires to actually cut spending and limiting government largesse. They have proved either incapable or unwilling to cut spending in my fifty-one years on the planet.
Marc Jeric| 3.29.12 @ 1:03PM
The most drastic federal budget proposal by our Republicans aims to balance it by 2040. What kind of a deadly joke is that? By that time the national debt will be around 10 times the GNP, and the inflation will bring us the new dollar worth 1,000 old ones. Nobody has come up with any realistic proposal on how to reign in our politicians. To start modestly in this budget balancing business we must eliminate, without a trace left, complete departments and agencies such as: Agriculture, Commerce, Housing and Urban Development, Health and Human Resources, Labor, Energy, NLRB, NRC, FCC, EEOC, FDA, …Please add another 100-300 bloodsucking commissions, boards, and agencies,…
Marc Jeric| 3.29.12 @ 1:05PM
Thinking about paper money printing machines or degrading gold and silver coins by admixtures over the 3,000-year history of civilizations; it is a sure and unavoidable sign of eventual disaster. And our politicians are fatally addicted to those machines – an addiction without known cure. Another sign of unavoidable catastrophe is when one receives a tax bill with one’s name on it – it is the one sure sign that the individual has become a slave to his government. Historical examples abound of such disasters – Roman Empire, Persian Empire, Spanish Empire, French Empire, British Empire, and Weimar Republic, to mention just a few. The only legal taxes are the property taxes, the commercial transactions taxes, the transport and transfer taxes, and temporary taxes during wars. One just cannot print a couple of trillion dollars year after year without any backing and hope to avoid a runaway inflation. We are told that the unemployment rate is only 8.3%; not so – if one includes those who have exhausted their unemployment benefits and those who were forced to take early retirement then the true unemployment rate is about 18%. The official inflation rate does not include the costs of food and energy – and those precisely are the main costs of living and survival. Then add to this deadly situation the government employees unions where the present union bosses “negotiate” with former union bosses that the unions elected to govern us, and you get the true recipe for utter disaster and eventual bankruptcy and revolution. A young professional 40 years ago started his career with a monthly salary of $600; today he starts with $8,000/month. Just a very few years from now he will start with $200,000 per month. And then the new dollar will be introduced, similarly to the French example where the new frank was equal to 100 old franks (1958), or in Brazil where the new cruzeiro was worth 1,000 old ones (1973). I should know – I lived and worked in those two countries when that happened.
cicero| 3.29.12 @ 2:20PM
These budget proposals are meaningless, unless the government actually passes a budget, and is held to it. To even propose a budget that overspends anticipated income by 33% is to propose changing the name of the country to Never-Never Land. The problem with Ryan's budget is that its baseline starts with current spending, which is already out of control. Maybe it will be good for talking points, or stump speeches. The Republicans can always say that it is a path forwarrd. But if the path leads over the cliff of fiscal sanity, what difference does it make? We have gone 3 1/2 years without a budget. We have had no acccountings for the billions given away to political friends. The only plans on the table are for more of the same, or one that anticipates balancing the budget "sometime" in the future. I wish I could tell my mortgage company that I have such a plan. I'm sure they would understand.
1ConservativeUSA| 3.29.12 @ 6:46PM
Not only does lowering taxes provide for economic growth, so too does removing statists from power.
David | 3.30.12 @ 4:34AM
It all seems so hopeless. Even if Obama were defeated by the Republican candidate, and I hope it happens, where would it get us.
David @ Engage America | 3.31.12 @ 5:38PM
There is no question that entitlement reform must happen. Even the trustees of the Social Security Trust fund agree that if the system isn't fixed then our budget problems will continue to mount.
Whether we raise the wage cap, increase the retirement age to keep pace with longevity, or start means-testing, something must be done. http://1.usa.gov/sBU5SU
While the Ryan plan isn't perfect, it is the only plan that brings the discussion of entitlement reform to the forefront of politics and that is the most important thing.
Darrell| 4.5.12 @ 11:28PM
The issue I have with the plan is just what the author refers too, it's a continuation of supply side economics, which has taken us to where we are today.
Supply side economics works if demand is high and investment unavailable. But in a world where corporations sit on trillions and the top 5% hold 98% of the assets, a shortage of capital to invest is not the problem. It's demand that's been down and it directly affects job growth which continues the cycle of slow demand growth. This has been the increasing trend coming out of the past 3 recessions (1991, 2001, and 2009). Investment capital is sitting idle because 1) consumers are tapped as real incomes have declined and their taxes have gone up, while the investment dollars sit idle with no place to go because consumer demand is down.
It's time to focus on the demand side. In other words what worked in the past won't! The problem has changed. And unfortunately this problem affects the quality of life for 95% of our citizens and their children's future.
Darrell| 4.6.12 @ 12:02AM
- continuation of previous post
Why do large corporations sit on trillions, why is Apple starting to pay dividends, why does the Chinese govt buy trillions in US treasuries. This money used to be spent to expand capacity to meet demand. In today’s world of excess capacity, they instead buy their own stock, offer dividends, buy safe haven bonds, etc. The world has production capacity sitting idle, capital sitting idle, labor sitting idle: 20% unemployment in Spain and Greece, 8% in the US, China 10%, etc.
This is reason the printing presses can run at full speed and still inflation is muted. Inflation will not return until demand ramps up and underutilized resources are put to work. Let us in America take the lead in fixing the imbalance and turn off the printing presses and let full employment take the lead in solving our deficit. Then with a few adjustments to entitlements and defense the problem is solved.
brubaker| 4.10.12 @ 8:20PM
A more useful statistic would be is 25% of GNP a historic level for wartime? Cause this sure isn't peacetime.