‘My worst experience was the financial crisis of September 2008,” responded House Budget Committee chairman Paul Ryan yesterday to a reporter’s question about Democrats’ attacks on the budget he unveiled earlier in the day.
“What if the president and your representative saw it coming and could have prevented it from happening?” Ryan said. “What would you think of them if they didn’t?” A hush came over the audience at the American Enterprise Institute (where I am a resident fellow).
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It was Ryan’s way of saying that the financial meltdown arrived largely without warning, while the impending fiscal crunch is like a runaway freight train.
“This is the most predictable crisis in the history of our country,” he went on. “We are on our path to a debt crisis” like those we’ve seen recently in Europe, with the national debt as a percentage of gross domestic product rising, under Barack Obama’s budget, past the 90 percent danger point on its way to 800 percent.
At some point in between, as Harvard economist Kenneth Rogoff explains in the Financial Times, interest rates spike upward and the government is forced to make draconian cuts.
Those Social Security checks? They can be scratched at any time, as the Supreme Court held in Flemming v. Nestor in 1960. Congress can do that just as quickly as it voted $700 billion to bail out the banks in fall 2008.
Ryan’s budget attempts to prevent that by restructuring taxes and spending programs so that the national debt as a percentage of GDP will start sliding down.
Tax rates would be lowered and the tax base broadened, much as Congress did in 1986. Federal spending would revert to 2008 levels and be frozen for five years.
Corporate-welfare programs, including green energy, would be ended. Defense spending would be at the levels recommended by Defense Secretary Robert Gates.
Medicaid would be converted into block grants to the states, which would give them new incentives to hold down costs.
Medicare would be converted, for those now under 55, to a program like federal employees’ health-benefit plans and the Medicare prescription-drug program. Seniors would have a choice of plans and would receive “premium support,” federal supplements varying in size depending on income and health.
As Ryan says, this resembles welfare reform in the 1990s — one of the great public-policy successes of recent times.
Ryan’s budget is a brave attempt to reverse the Obama Democrats’ vast increase in the size and scope of government. The premise of their policies was that people can’t make rational choices to take care of themselves and are better off depending on centralized experts to limit those choices.
Ryan’s budget is based on the idea that people are capable of making decisions for themselves. And that the cumulative result of all those decisions, made by millions of people, will be greater productivity, creativity, and protection than can ever be achieved by a few experts through centralized command and control.
This is not an approach recommended by campaign consultants. Their conventional wisdom says that you never, ever recommend any changes in programs like Medicare.
Such advice has been heeded by the former community organizer now in the White House. “Hope and change” was a nice theme for an out-party candidate in 2008. But the status quo and fear-mongering seems to be the approach for the in-party candidate who this week announced the beginning of his 2012 campaign.
In the short term, Ryan’s budget resolution will likely be adopted in the Republican-controlled House and not even considered in the Democratic-majority Senate. Most of it will probably not become law this year.
But it’s also likely to shape the economic platform for the Republican presidential nominee in 2012. None of the current potential candidates has come up with anything so comprehensive. Some have already stepped up and praised Ryan’s plan.
But the political risk may be greater for the other side. “To be in a secure place for re-election,” writes Mark Penn, a key strategist for Bill Clinton in 1996, “President Obama has some tasks ahead of him that will give him the edge when (the Republican) field is narrowed.”
The first task, Penn writes, is to “take over leadership of the budget fight to turn it into a win for him and fiscal sanity.”
It seems that Penn agrees with Ryan that American voters realize that we are headed to fiscal Armageddon and that major changes must be made while we have time. What will they think of a president who disagrees?
Let me get this straight. Conservatives warned against both Social Security and Medicare when they each originated in Congress. Now it's somehow the sacred duty of conservatives to save these programs? What is wrong with us?
I hope they (the American people) realize that the country will not survive another four years of this foolishness. Heck, we'll be lucky to survive the next two. The Democrats and Obama's czars have done their best to weaken the underpinnings of our country by ignoring the voters, pursuing what they want to do regardless of what Congress says or does (think EPA and FCC), and has tried their best to turn off the lights of our country's energy sources. They want us all hungry and cold with our hands out to them saying, "please." They disgust me.
I hope Mr. Ryan has taught the GOP how to present and defend his proposal, and I wish they'd all be out here talking it up.
This is the "reset" our politics needs.
This provides the opportunity to revisit and remind everyone what the Liberals have accomplished, not only over time, but through the first two years of Obama; remember ObamaCare, remember the stimulus, remember GM, remember bailouts, remember the Lame Duck CR, remember their resistance to extending lower tax rates.
A consistent message of why we elected them - to stop the Obama/Reid/Pelosi spending spree and agenda, an agenda wreaking havoc with Federal and State solvency, an agenda so out of control that even some Libs like Cuomo and Brown are cutting spending, benefits and government - must be topic one, two and three. We must continually be explaining we know there will be resistance from those who derive power from the current system and those they influence. There will be outcries from those who see the need to continue to fund Cowboy Poetry, larger government, government controlled healthcare, and lucrative benefit packages that the tax payers can no longer afford to keep funding as they have in the past. But there was similar resistance heading into the 2010 elections as well and the people voted to change our course. The status-quo received a "shellacking", I remember it being called.
The Grand Old Tea Party must grasp what the Liberals have always known and what the GOP never understood - campaigning is a 24/7/365 responsibility!
Ryan gets what exactly? Let's not forget it is the same guy who eagerly supported all of Bush's budget busting spending programs. The Republicans want to overturn obamacare. Fine. How about Bush's medicare expansions, sarbanes-oaxley, no child left behind, etc. Putative conservatives were all in favor of such expansions. Oh, did I mention the bailouts? Ryan and other self-described "young guns" were all in favor of these spendings. I simply don't trust him, and his ilk.
I would like to see all the entitlements, and anything else not mentioned in the Constitution (e.g. the EPA) be utterly defunded. I am getting to an age where I might expect to get those benefits, too. Get rid of them, I say.
But the reason why conservatives need to defend rather than defund them is that most people have made these programs part of their retirement planning, and have no backup. Of course they will be upset to have the size of the benefits cut, but they will mostly survive. They will develop some other alternatives, like sharing expenses rather than living alone. They might take advantage of local food pantries. And they are not being totally abandoned, just put in a situation where they need to consider their individual needs and get the insurance product that suits them best, rather than what government thinks is best for them.
The alternative is that the nation goes into fiscal Armageddon to save them and their entitlements. The country doesn't owe that duty to any group of citizens, not even veterans. The destruction of the United States is not going to preserve the entitlements anyway, so let's all make do with less, so the country itself can survive.
The change to entitlements proposed by Ryan isn't as much as I would like, but it does provide hope that the nation will become a fiscally responsible adult again. That's change I could believe in.
Mr. Barone is not thinking like Obama. Mr. Obama doesn't care about the long-term good of the country; he only wants to get re-elected in 2012, prevent ObamaCare from being repealed, and flood the country with immigrants. He assumes that liberals will run the country after they have changed its demographics. Conservatives make a mistake when they assume that liberals are motivated by anything other than maintaining power.
His plan is simple. Maintain the status quo for another two years and hope that a financial crisis does not erupt before November 2012. Talk hope and change to stupid white liberals, promise feminists that he will aggressively defend abortion, and use racial wedge issues through proxies like Al Sharpton and La Raza to motivate blacks and other non-whites to vote for him. There is no upside to President Obama behaving responsibly regarding the budget and the man has no intention of doing so.
Last December, when Obama and the Republicans were hashing out their tax cut compromise, nobody said anything about the disastrous effect of lowering revenues would have on the deficit.
Not Mr. Ryan, National Review... Nobody.
Now it's time stick it to seniors and poor kids. Do you see a pattern here?
As for the goofy tea party "constitutionalism"... that's too worn out. Glenn Beck was fired yesterday and it's time to retire those silly propositions [save those for Facebook and everywhere else rightwing loonies hang out]
Question: Why is Paul Ryan not the Speaker of the House vs the inarticulate, weepy Bohner?
For the good of the Country the House GOP needs to approach Bohner and get him to step down and make Ryan the front man.
Ryan is passionate, articlate, persuasive, yet steady and pleasant, even when he is on the attack.
His logic and knowledge about the NUMBER ONE issue facing America, the coming economic collapse, is so far above his opponents it is like Larry Kudlow debating Brittany Spears on the danger of QE3!
"Rep. Paul Ryan realizes we are headed to fiscal Armageddon. Does President Obama?"
Yes, he does.
Disabuse yourself of the notion that Obama isn't aware of the predictable consequences of his policies. He's neither that stupid nor that uneducated nor that innocent.
One of the consequences of our inflationary path is an outcry against rising prices. That's useful to a politician who seeks to impose price controls on necessities -- as just about every Democrat in high office has wanted to do for decades. Price controls, of course, trigger shortages...and shortages are the classical rationale for government rationing.
Obama worships two things: himself, and power. Both the adulation of the masses and power undreamed of by any previous president lie at the end of his policies. He most certainly appreciates that, even if many Americans do not.
Ryan's budget is a good place to start. The Right needs to start chipping away at the Leftist talking point that every dime of federal spending is a matter of life and death for millions.
We can not tax our way out of this. Long term problems require long term solutions like Ryan has proposed.
Bush over spent, but comparing him to Obama and the Dims is laughable. It is akin to saying that if my wife spends too much shopping one day she better not complain when I mortgage the house for a down payment on the original Batmobile.
I am in agreement with Mr. Ryan if indeed there is correlating revision to the tax code so close loop holes and insure all citizens and corporations are paying for the right to be in America.
-Voted YES on TARP (2008) (made "one of the most hysterical speeches for Tarp",as Michelle Malkin said).
-Voted YES on Economic Stimulus HR 5140 (2008)
-Voted YES on $15B bailout for GM and Chrysler. (Dec 2008)
-Voted YES on $192B additional anti-recession stimulus spending. (Jul 2009)
- Voted YES on limited prescription drug benefit for Medicare recipients. (Nov 2003)
- Voted YES on No Child Left Behind Act (2001)
Sooo... A big-government budget-buster who should have been trusted to lead the efforts to bring the fiscal house in order?
Ryan should quit in disgrace. He was a total tool for the Bush regime and now he dances to a different tune. Well, I am not buying it. Either he has to build his credibility by introducing bills that repeals Bushcare, Sarbanes-Oxley, NCLB, defunds Iraq/Afghanistan/Libya, or this is pure posturing to get reelected.
I don't know it sure seems this train was designed to crash. Think about our monetary system. It is based on debt issued by the Federal Reserve. They never issue enough money to cover the interest on all the debt so the government has to issue more and more debt in an endless cycle.
Think about incentives. What incentives do the political class have for reducing debt? None. It dries up the money supply crashes the economy and leads to them getting punked in the next election. What incentives do the big banks have to encourage even more debt by the Federal government? Huge incentives. They basically get to skim 10% of our annual effort first through interest payments on all that debt for doing what exactly? Issuing the government our own credit. The banks, using all that money under their control can then buy economics chairs at the major universities to preach the Keynesian/Socialist debt gospel. They can buy the media to deflect everyones attention from the real reason we are all broke. The US central bank highjacked the value of our currency deflating the dollar to buy all the social bennies the leftists use to finance the political payoff to voting blocks that keep the insanity going.
It is kind of amazing to me that nobody even mentions monetary reform and going back to sound currency systems. The real reason the shlubs at the bottom need all the assistance in the first place is that Fed continually degrades the purchasing power of our currency to take the wealth of the middle and upper middle class through income, sales, and other inflation taxes.
Cutting spending is the right thing to do, but without monetary reform, the conservatives will lose a political war of attrition. The elites control the banks. They have most of the financial power.
Maybe we should consider an act of political sabotage for the good of us all. Maybe every conservative nationwide should go to their bank in September 2012 and demand the withdrawall of their money right then and there. This will crash the fractional reserve banking system right before the 2012 election. Let Barackulus sail into that headwind like McCain did. Then in the aftermath we demand monetary, banking, and spending reforms to end this financial hostage system we have.
Otherwise it will be a long grinding loss of freedom and wealth to the bankers and the Obama/Soros types. Who's in?
To the Ryan bashers relax. I don't care his past sins. He has opened the door to actually discussing these things. If someone else wants to go further nothing is stopping them if they have the guts. Medicare needs to move to a DC plan. Someone needs to propose that.
To regular guy - and with apologies to the notion that NRO isn't Daily Kos or the DU - you are just acting stupidly and demonstrating your unseriousness. Seniors? What playbook did you dig that utterly infantile remark from? I think you should have your commenting privileges revoked. I mean that adds nothing. We have all been harmed by you by having to read it.
People, we need to grow the economy. Cutting the deficit and cutting spending does not grow our economy.
Reagan relaxed tax pressure on the wealthy to encourage investment in industry and jobs. Instead the wealthy have invested in money. The industry of money is now at least 40 times the size of our GDP. Check it out. Our defecit/ gov debt is a good part of that. Private debt is another big part.
We need to grow the economy WITHOUT borrowing the money. The FED has had record setting/banner years in the recession. How does that happen? The fox (the FED) is in charge of the chicken coop (money supply and therefore the economy).
Overhaul the FED and grow the money supply to invest back into the economy... to grow the economy. It's not difficult. And if our government is seriously interested in the people of this country, it can be done.
Powerful and influential people will not want to see this happen. They will point to every lame peril in doing that... inflation, devalue of money... all not inevitable if managed and enacted intelligently. What it will do is disrupt the status quo which is making them more money. Transfer of wealth in this country has been incredulous.
How do we do it? Start talking about it. Learn about the FED and banking. When you talk something enough, it becomes de facto reality.
