Revisiting Paul Ryan's Crazy-Ass Path to Prosperity Plan
Oct 11 2012
Since vice presidential candidate Paul Ryan (aka the GOP’s “idea man”) debuted his plan for retooling the economy a few months ago, a whole slew of people have been debating whether it would save America from entering a godless socialist dystopia or if the so-called Path to Prosperity was the dumbest fucking plan to come out since taste testing Agent Orange. The country is openly torn between the two takes, and very few people lie in the middle (many, of course, couldn't care less about any of this stuff). I decided it might be worth looking into it for a few minutes, especially considering tonight's vice presidential debate.
The first thing I noticed about the plan was it felt like a college economics textbook. The specifics were both dumbed down and incredibly boring, and I understand why nobody would want to read it. I had expected it to come with activities at the end of each chapter, but thankfully there weren’t any—besides explaining to your neighborhood bartender why you looked so sad.
The plan doesn’t waste any time before referring to the Constitution and Founding Fathers, citing life, liberty, and the pursuit of happiness (whatever that means) as “the principle and the purpose that informs this entire federal budget." (page 7) The actual details are mostly based on unsubstantiated claims, but at least he clarified his purpose.
Ryan describes his plan as setting forth, “a model of government guided by the timeless principles of the American Idea: free enterprise and economic liberty; limited government and spending restraint; traditional family and community values; and a strong national defense." (p. 12) He also declares the federal government should be tasked with protecting the free-enterprise system, i.e. capitalism, making it clear that whatever comes next must be based on that ideology. This is important to remember. All of his secondary assumptions are viewed from the fundamental perspective that capitalism is unquestionably the only solution, and this helps explain why he believes his plan will ultimately be good for us all.
The text is accompanied by occasional graphs, most of which I found to be fairly ridiculous. Take this one, titled “A Choice of Two Futures” on page six for example. I like how the past, featured in gray, hits the present before diverging into two choices, one slight decline in soothing green, and one crazy exponential increase in alarming red. What would you rather take, a pleasant stroll down the Path to Prosperity or a merciless climb up the ever-steepening current trail of death? Where did those numbers come from anyway? I see the source is OMB/CBO, so I guess they come from somewhere. Either way, the graph is visually striking and perplexing.
Another great graph is figure 2, page 19. Why does the revenue line just hold steady as everything else increases? If you look in the past, you’ll notice revenue bounces up and down, but Ryan’s forecast has it holding true as an arrow, which is highly unlikely. Apparently revenue is not set to deviate a single percentage point over the next 78 years. We have CBO to thank for this one as well.
Either way, let’s stop laughing about how dumb the graphs are and move onto the depressing specifics. Now, it’s not much of a surprise that the Romney/Ryan ticket isn’t giving many details about how they actually expect their budget to work. Real answers aren’t exactly their style, and right away you get the feeling that by explaining their plan, they might be opening themselves up to the truth—the Ryan Plan can’t work.
So what are the inherent problems in the Ryan Plan that doom it to failure? Let’s take a look.
TAXES AND THE DEFICIT
First and foremost, Ryan maintains that he can cut taxes and reduce the deficit at the same time. It’s like he’s saying the best way to make more money is by making less money. Of course, it’s not painted that way. Ryan says he’ll be able to make up for the loss through closing tax loopholes and slashing unnecessary federal spending, which he claims will actually lead to a revenue increase.
Right away we run into a big problem. You can’t cut taxes and expect to instantly increase revenue. It’s called math. If you cut income, you don’t make more income—it’s as simple as that. You could write the equation for a second grader and they’d be able to figure it out. Yet Ryan doesn’t see it like that. Without fully explaining how or why, Ryan alleges that his budget would leave the country with a surplus. Most independent experts agree that tax cuts would lead to reduced revenue, but Ryan and his cohorts disagree; they say that by closing unspecified loopholes, overall revenue would increase.
OK, fine. What tax loopholes does he propose ending? He won’t say. Basically, he wants us to believe his plan will work simply because he says it will.
His plan for addressing the deficit calls for dramatic cuts in top income tax rate and corporate taxes coupled with dramatic cuts to Medicaid, which Ryan claims will amount to a deficit reduction. Of course, it could also be explained as something the Republican Party says it's vehemently against—redistribution of wealth. He’s basically saying we should give more money to those who will use it wisely (the rich), and less to those who will use it to get away with doing nothing (the poor). The reason why this form of redistribution is acceptable to him is because it’s the basic arrangement capitalism thrives off of. If the redistribution had gone the other way around, he would call it socialism, and there’s nothing worse in the world for Ryan than that.
The Path to Prosperity vehemently opposes cuts in defense spending, as the military is what keeps this country strong, but it has no problem advocating major cuts in discretionary spending (i.e., things like infrastructure, Pell Grants, programs for veterans, the EPA, etc.). It promotes tax breaks for wealthy corporations and individuals, openly embracing “the widely acknowledged principles of pro-growth tax reform by proposing to consolidate tax brackets and lower tax rates.” (p. 15) I’m assuming “widely acknowledged” refers to a very specific circle.
“Lower taxes stimulate greater investment, which expands the size of business activity,” explains the Heritage Foundation, a partisan think tank beloved by Ryan and other conservatives. Apparently it’s that simple. They go on: “As a consequence of the growth in the size of the economy (for example, $1.5 trillion over ten years in additional economic output results from the budget plan), the income base from which the federal government draws its taxes grows significantly.” Sure, if the size of the economy grows at whatever rate they randomly say it’s going to grow at. These claims rely on assumptions that are hard to take seriously, especially when the details of where the numbers came from are absent. They are arbitrary forecasts based mostly on an ends-justifies-the-means style of logic.
It appears they’re just making shit up and saying it’s true, which matches the style of the Romney/Ryan ticket. Regardless, Ryan declares his budget “charts a sustainable path forward, ultimately erases the budget deficit completely, and begins paying down the national debt.” Yet again, he asks us to take his word for it.
“This budget puts an end to empty promises from Washington, offering instead real security through real reforms,” Ryan says on page 14. Right away you have to question what “real” means to Ryan. My hunch is "real reforms" just mean "stuff I like," because the proposed policies include changing Medicare into a voucher system, which Ryan assumes will lower the overall cost of healthcare. The biggest problem with this is that a voucher system doesn’t guarantee lower costs at all.
Unlike Medicare, which directly pays health care providers, the voucher system would pay insurance companies. The assumptions put forth in the Ryan Plan are based on the belief that competition on the free market is the best way to drive down prices. He’s saying that if people are given $14,000 dollars to choose an insurance plan they’ll pick the one that costs the least, which would force insurance companies who wanted more business to charge less. Of course, there’s no empirical evidence that this would happen, but Ryan nonetheless believes it based on his ideological stance.
Ryan's idea works great in what economists call a "frictionless” world, where outside influences are disregarded, but unfortunately our reality is a bit more complicated. What happens if insurance companies, who may or may not be in it together, actually raise costs? Medicare currently has the power, thanks to its size, to negotiate with providers for lower rates, which means that rates would automatically go up for people currently on Medicare if Ryan's plan went into effect. There’s reasons why outside experts say the voucher system would drive the cost of healthcare up, not down. This is incredibly important, as it would directly impact millions of people.
From Ryan’s capitalist perspective, competition always drives prices down. Whether that actually happens is beside the point. Collusion doesn’t exist in his Path to Prosperity, and Ryan considers removing Medicare from the budget as a great way to lower the deficit and reduce the size of government.
There’s no question that the Affordable Care Act (aka Obamacare) falls short of providing for us too. Universal healthcare is the only logical stance for a country whose responsibility, as Ryan puts it, “is the safety and security of all Americans.” (page seven) But although Medicare is inefficient and does need to be reformed, enacting Ryan’s plan would be particularly dangerous for a large segment of our society. It’s somewhat uncomfortable to realize defense spending is off the chopping block while the well-being of our citizens is being waltzed to the guillotine.
Ryan claims his goal is to strengthen the social safety net but that ultimately it comes down to us. “The federal government can help provide a strong safety net for Americans who, through no fault of their own, have fallen on hard times,” he explains. “But government can never replace the core institutions of a vibrant civil society—families, neighbors, churches and charities." (p. 7)
There are a bunch of assumption there that should not go unnoticed. First and foremost, not every family is wealthy enough to financially support someone with cancer. And of course, not everyone belongs to a church or lives somewhere where neighbors can lean on each other. You’d think that if families were supposed to be on the frontlines of social welfare, Ryan would be OK with gay marriage, if only to help reduce the dependence on the federal government. I guess he considers those relationships to be neighborly at best.
Ryan blames Medicaid for driving up the costs of healthcare, not the other way around. He also says we need to prioritize assistance to those in need so it doesn’t “entrap” people “into lives of complacency and dependency.” After all, people on Medicaid are lavishing in comfort. Why would anybody want to work when they could relax and be super poor?
Then there’s the issue of the rising cost of tuition. Apparently the reason student loans have gone up is because the government is providing too much money to help fund education, not too little. From his perspective, federal financial aid unquestioningly has a negative effect. Ryan must assume that if the people who couldn’t afford to go to school weren’t given the opportunity to continue their education, there would be less applicants to college, which in turn would drive the costs down and lower overall student loan debt. Of course, this would also result it a less educated society, but I’m sure we don’t have to worry about that—Americans are the most innovative people in the world by default. It’s simple economics, folks.
I guess someone’s got to work in all those non-unionized factories when all the manufacturing jobs magically returning to the States, right? The last thing America needs is someone spouting leftist propaganda like The Jungle and fucking up our well-oiled assembly lines. No reason to educate the workforce.
It’s clear that by authoring this plan, Paul Ryan isn’t afraid of a little controversy. Unlike many Republicans, he’s openly willing to admit the existence of class war. But unlike those who feel the system is abandoning them, he feels that “the moral high ground” to take is (prepare to be shocked) the promotion of capitalism. He explains his position here.
My favorite part of this video is when he says President Obama speaks to people as if they’re fixed in a class. “That’s the European model,” Ryan explains. “That’s the model our ancestors left to come create an opportunity society.”
Ah, another beautifully sculpted lie. Right away it’s obvious that not every American’s ancestors left Europe in order to finally be free of a class-based society, and even more blatant is the fact that not all of our ancestors were European to begin with. There was that thing called the slave trade, where Africans were abducted from their homelands, forced to labor against their will without pay, and treated as privately owned commodities. Now that’s capitalism! I’m guessing Ryan would say that when he mentioned “our ancestors,” he was referring to the Founding Fathers, whom I’ll admit were all men of European descent. But it sure does come off like he’s saying all of our families left Europe for the same reason. By the way, was there ever a class-based society in America? Were there ever groups like racial minorities and women who weren’t allowed the right to vote for what I can only assume to be perceived biological defects? Probably not, right?
The Path to Prosperity represents Ryan’s so-called “moral high ground.” It cuts tax rates for the wealthy and for corporations while in the same breath rips to shreds social programs that provide food and healthcare for the poor. Fuck the poor, right? As Mitt Romney so eloquently put it in his leaked 47 percent video, “I’ll never convince them that they should take personal responsibility and care for their lives.” It’s like he’s trying to starve the poor out of poverty. It’s that kind of approach that makes Paul Ryan a perfect running mate for Mitt.
Cutting public spending directly hurts the public according to Ryan, so what’s the point of having a representative government that’s hurting the people it represents? Ryan’s budget personifies a classic case of cognitive dissonance, and one that negatively affects the poorer segments of our society while supposedly trying to help them.
My overall assessment is that the Ryan Plan is a woefully inadequate budget proposal. It is intellectually insulting, inherently flawed, and economically inept. Anyone who disagrees is either viewing it through ideological lenses or has no idea what is going on in the first place. His plan is completely void of feasible solutions to our national problems, and it has intentionally exchanged things like simple math for unjustified rhetorical claims. His long-term discretionary spending plan would be considered laughable if it wasn’t so fucking sad.
The thing is, I truly believe Paul Ryan is intelligent, but ultimately he’s an asshole, an intellectual fraud pushing policies that only work for the people he truly represents, the rich. It’s not that the Ryan Plan couldn’t work—it’s just it couldn’t work the way he says it will. He represents the rich and is using the conservative poor as pawns to help him get away with it. If enacted, the Path to Prosperity would only lead to increased corporate leverage and a widening income gap, leaving millions without healthcare and putting the burden of lessening the deficit on those who can afford it the least. He’s a snake oil salesman, and just because he talks smooth about how he’s going to cure your baldness doesn’t mean he’s not planning on taking your money and running with it.
We need to be aware of what’s going on. If we allow the Paul Ryans of the world to pull the wool over our eyes, we’re going to wake up one day shaking our heads and wondering how it ever got to be so bad. On the other hand, fuck it. I already wake up like that.
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