gracchusdixit

Paul Ryan may have lost his recent bid to become the Vice President of the United States, but he has lost little of his ideological fervor and none of his intellectual gall.  For the third time in as many years, he has put forward a budget that, like its predecessors, has one objective and one objective only: to dismantle, diminish or reverse every decent investment made by the Federal government except defense.

Among its many indecencies, the Ryan budget would turn Medicare into a system of vouchers, all but destroy Medicaid, scale back Social Security, and replace our current progressive tax code with a two-tiered “flat tax,” increasing the taxes paid by most Americans and substantially reducing those paid by the richest.

These proposals are grounded in one overarching assertion—that the root of our problems is “the unchecked growth of government.”  Shrink the government (at least the part of government Ryan dislikes) and all, he asks us to believe, will be well.

The problem is that Ryan’s central assertion is a myth, stitched together from a series of lies.

To begin with, the size of government isn’t growing.   There are half a million fewer Federal employees today than there were in 1980, when the population of the country was considerably smaller.  For the last twenty years, the number of government employees has remained roughly constant.   All told, Federal employees comprise less than four percent of the total workforce, scarcely enough to constitute a drag on an economy as large as ours.

Nor has Federal government spending increased substantially.  On the contrary, it has remained at roughly 20 percent of GDP since the 1980s and has declined in the last several years under that “big spender,” Barack Obama.  To be sure, our debts and deficits have grown substantially since George Bush was elected in 2000—but not because of the “unchecked growth of government.”  They have grown because Bush squandered a trillion dollar surplus on tax cuts for the wealthy, because economic activity and tax receipts shriveled in the wake of the financial collapse of 2007, and because we decided to fund two unnecessary and fruitless wars with borrowed money.

Despite all that, Ryan proposes to cut taxes on both corporations and the richest Americans, claiming that high tax rates strangle job creation.  The truth is that our personal tax rates are not particularly high as compared with the rest of the world and relatively few corporations actually pay the high tax rates he complains about.  If they did, we wouldn’t be in this mess.  In truth, our economy was booming when tax rates were substantially higher than they are today, and no credible evidence exists to suggest that our current tax rates are in any way suppressing economic activity.

Finally, Ryan talks incessantly about ending the heavy hand of government regulation, which, he claims, is “stifling” the natural inventiveness of the “free enterprise” system and, in particular, “small business job creators.”  In this as in so much else, Ryan offers us sentimental myths and comforting cliches instead of the facts.  It was the evisceration of financial regulation by Bill Clinton and a prior Republican Congress that led directly to the crash of the capital markets and the recession that followed.  It isn’t “small business job creators” but large corporations—fewer than one percent of all the businesses in the country, in fact—that employ a majority of the workforce and pay nearly two-thirds of the wages.  For all the “stifling” regulations and onerous taxes Ryan complains about, these corporations seem to be doing rather well, with their profits and stock prices at record highs.

In the preamble to his budget, Ryan draws a stark contrast between two “visions” of the nation’s future: his own, which he glorifies, and the President’s, which he vilifies.  Clearly not a humble man, Ryan calls his own vision a “blueprint for American renewal.”   In the unexpectedly lucid words of Newt Gingrich, Ryan’s blueprint is nothing more than an act of “right-wing social engineering.”  It is a blueprint for disaster.