PLANK AUGUST 11, 2012
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Many millions of working-age Americans would lose health insurance. Senior citizens would anguish over whether to pay their rent or their medical bills, in a way they haven’t since the 1960s. Government would be so starved of resources that, by 2050, it wouldn’t have enough money for core functions like food inspections and highway maintenance. And the richest Americans would get a huge tax cut.
This is the America that Paul Ryan envisions. And now we know that it is the America Mitt Romney envisions.
Of course, we should have known that already. Romney committed himself to the Ryan agenda during the presidential primaries, both by embracing the Ryan budget rhetorically and specifically proposing key features of Ryan’s agenda, starting with a tight cap on federal spending. But if anybody doubted that Romney was serious about these commitments, the Ryan pick should put those doubts to rest. Maybe Romney sincerely believes these ideas are right for the country and maybe he feels that endorsing them is necessary to please his party’s base. It really doesn’t matter. It’s the way he intends to govern.
But will the voters get it? Ryan’s has a carefully cultivated image as a wonk hero, somebody who deserves to be taken seriously because he understands policy minutiae and cares about reducing the deficit. The image is a little misleading: As my former colleague Jonathan Chait has written in New York magazine, during the Bush Administration Ryan supported creation of the Medicare drug benefit and other policies that substantially increased the deficit. But Ryan's image helps to insulate him, and his ideas, from the charge that he’s proposing what would amount to the most radical revision of governing priorities in our lifetime. Pointing out the very real, very painful consequences his budget would have somehow seems impolite.
With that in mind, here are five things everybody should know about Ryan and his agenda, based mostly on non-partisan authorities such as the Congressional Budget Office, the Kaiser Family Foundation, and the Center on Budget and Policy Priorities.
1. Ryan really believes in ending Medicare as we know it. The essential promise of Medicare, ever since its establishment in 1965, is that every senior citizen is entitled to a comprehensive set of medical benefits that will protect him or her from financial ruin. The government provides these benefits directly, through a public insurance program, although seniors have the right to enroll in comparable private plans if they choose. But the key is that guarantee of benefits, and it’s what Ryan would take away. He would replace it with a voucher, whose value would rise at a pre-determined formula unlikely to keep up with actual medical expenses.
Ryan's early proposals had no safeguards to make sure the voucher was adequate. His most recent one has safeguards, a more reasonable spending line, and preserves the government-run plan as an option. But the safeguards are weak, at best, and the government-run program would struggle to survive. Over time, more and more seniors would find the voucher too small to buy the insurance they need.
By the way, Ryan's first budget would have raised the eligibility age of Medicare from 65 to 67. Without the Affordable Care Act, which Ryan would repeal, many if not most 65- and 66-year-olds without employer insurance would end up uninsured. And that's not an age at which you want to be skipping doctor visits. (Update: I implied originally that this was also true of the new Ryan budget. It's not—and I apologize for that error.)
The long-term effect would of the latest Ryan Medicare proposal wouldn't be nearly as severe as the long-term effect of the original. But it'd be a difference in magnitude, not a difference in kind. Seniors would not get the same protection they do now. That would force more of them to choose between health care and other essential needs—the very same situation they routinely faced until the 1960s, when dismay over the hardship seniors faced created the political groundswell for Medicare.
2. Ryan really believes in ending Medicaid as we know it. Like Medicare, Medicaid is effectively a guarantee: It’s a promise to the states that, as long as they offer Medicaid and contribute their share, the federal government will enough money to cover everybody who is eligible for the program, no matter how many people it is. It’s also a promise to individual Medicaid recipients, that the insurance they receive will be sufficiently comprehensive to cover any service they might need—plus some extra services, such as lead screening for children, that are particularly critical for low-income Americans.
Ryan would end both guarantees, by turning Medicaid into a “block grant.” Every year, the federal government would cut checks for the states, according to a pre-determined formula. The formula envisions massive cuts to the program; it’s one of the major places Ryan looks to reduce federal spending. Given those levels, states would be forced to reduce, dramatically, whom they cover and/or what they cover.
According to estimates commissioned by the Kaiser Foundation and made by researchers at the Urban Institute, the end result would that between 14 and 27 million low-income Americans lose health insurance. That’s above and beyond those who are supposed to get insurance from the Affordable Care Act, starting in 2014, but would not because Ryan wants to repeal the law’s coverage expansion.
Oh, one other thing. People forget that the majority of Medicaid spending isn't on the proverbial single mother living at the poverty line. It's on the elderly and disabled. One way or another, such severe cuts to Medicaid will impact their services, making it (more) difficult for them to pay for nursing homes and long-term care.
3. Ryan really pushed for privatization of Social Security. From Ryan Lizza’s profile of Ryan in the New Yorker:
Ryan and other conservative leaders, among them Senator John Sununu, of New Hampshire, wanted to be sure that Bush returned to [privatization] in 2005. Under Ryan’s initial version, American workers would be able to invest about half of their payroll taxes, which fund Social Security, in private accounts. As a plan to reduce government debt, it made no sense. It simply took money from one part of the budget and spent it on private accounts, at a cost of two trillion dollars in transition expenses. But, as an ideological statement about the proper relationship between individuals and the federal government, Ryan’s plan was clear.
The release of the Social Security proposal was a turning point in Ryan’s career. Bush could have chosen to push a bipartisan idea, such as immigration reform, as the first domestic proposal of his second term. But, during the 2004 campaign, Ryan, with such allies as Kemp and Ferrara, kept up pressure from the right to force the White House to make a decision on Social Security. Many Republicans were still wary. Two weeks after Bush’s Inauguration, Ryan gave a speech at Cato asserting that Social Security was no longer the third rail of American politics. He toured his district with a PowerPoint presentation and invited news crews to document how Republicans could challenge Democrats on a sacrosanct policy issue and live to tell about it.
Conservative editorialists and activists cheered him on. “What Ryan and Sununu have proposed is historic,” Newt Gingrich wrote in an op-ed piece. “They have fashioned a plan that makes the idea of a personal-account option for Social Security not only politically viable but, indeed, politically irresistible.” Jack Kemp lauded his former aide: “It will be proven the most efficacious of all the reforms.”
By the way, the plan was so radical that Bush eventually rejected it for a more cautious version.
4. Ryan really would decimate government funding, to the point it could no longer carry on many routine operations. According to the Congressional Budget Office, Ryan’s most recent budget would, by 2050, shrink spending in everything but the big entitlements (Social Security and government health insurance programs) and interest on the debt to less than 4 percent of gross domestic product. To give you a sense of scale, spending outside those entitlements and interest now represents more than 12 percent of GDP and has never, since World War II, represented 8 percent. What would this mean in practical terms? Massive, debilitating cuts to everything from law enforcement to education to highways to food inspections. (Ryan has said he wants to increase defense spending, which would mean steeper cuts to everything else.)
5. Ryan really does want the biggest transfer of wealth, from poor and middle class to rich, in modern U.S. history. Forgive the long direct quote, but this statement from Robert Greenstein, president of the Center on Budget and Policy Priorities, is something that every single reporter covering the campaign should read—and that every American planning to vote should understand:
The new Ryan budget is a remarkable document — one that, for most of the past half-century, would have been outside the bounds of mainstream discussion due to its extreme nature. In essence, this budget is Robin Hood in reverse — on steroids. It would likely produce the largest redistribution of income from the bottom to the top in modern U.S. history and likely increase poverty and inequality more than any other budget in recent times (and possibly in the nation’s history). …
Specifically, the Ryan budget would impose extraordinary cuts in programs that serve as a lifeline for our nation’s poorest and most vulnerable citizens, and over time would cause tens of millions of Americans to lose their health insurance or become underinsured. It would also impose severe cuts in non-defense discretionary programs—much deeper than the across-the-board cuts ("sequestration") that are scheduled to take place starting in January — thereby putting core government functions at still greater risk. Indeed, a new Congressional Budget Office analysis that Chairman Ryan himself requested shows that, after several decades, the Ryan budget would shrink the federal government so dramatically that most of what it does outside of Social Security, health care, and defense would essentially disappear.
Yet alongside these extraordinary budget cuts, with their dismantling of key parts of the safety net, the budget features stunning new tax cuts for the wealthiest Americans. These tax cuts would come on top of the average tax cut of more than $125,000 a year that the Tax Policy Center (TPC) estimates that people who make over $1 million a year will receive if — as the Ryan budget also proposes —policymakers make all of President Bush’s tax cuts permanent.
Ryan believes all of these things. Romney does too. Is this the future a majority of American voters want? Over the next few months, we’ll find out.
Update: Make that six things.
6. Ryan really holds an extreme position on abortion rights, even relative to other conservatives. I didn't grasp this until I learned, via twitter, that he’d co-sponsored a bill declaring that life begins at fertilization and defining fertilization as “the process of a human spermatozoan penetrating the cell membrane of a human oocyte to create a human zygote, a one-celled human embryo, which is a new unique human being.”
Just in case your sense of reproductive biology is a little fuzzy, let me explain why that’s so significant. This is the earliest possible point at which you could define life, unless you want to go all Dr. Strangelove. As far as I know, it would effectively prohibit intrauterine devices (IUD) and some oral contraceptives, since those forms of birth control can stop pregnancy by preventing a fertilized egg from implanting in the uterus. It would also ban in vitro fertilization.
Of course, fertilized eggs fail to implant all the time. That is how nature works. And that is one reason why even the ultra-conservative, rabidly anti-abortion voters of Mississippi rejected a similar proposal.
Was Ryan's sponsorship of this measure an aberration? Hardly. Michelle Goldberg, writing in the Daily Beast, explains:
…on abortion and women’s health care, there isn’t much daylight between Ryan and, say, Michele Bachmann. Any Republican vice presidential candidate is going to be broadly anti-abortion, but Ryan goes much further. He believes ending a pregnancy should be illegal even when it results from rape or incest, or endangers a woman’s health. He was a cosponsor of the Sanctity of Human Life Act, a federal bill defining fertilized eggs as human beings, which, if passed, would criminalize some forms of birth control and in vitro fertilization. The National Right to Life Committee has scored his voting record 100 percent every year since he entered the House in 1999. “I’m as pro-life as a person gets,” he told the Weekly Standard’s John McCormack in 2010. “You’re not going to have a truce.” …
This disregard for the exigencies of women’s lives … was thrown into high relief during his 1998 run for congress against Democrat Lydia Spottswood. Both candidates backed a ban on so-called “partial-birth abortion,” but Spottswood believed there should be exceptions in cases where a woman’s life or health is endangered. “Ryan said he opposes abortion, period,” reported the Milwaukee Journal Sentinel. “He said any exceptions to a ‘partial-birth’ abortion ban would make that ban meaningless.”
During that campaign, Ryan also expressed his willingness to let states criminally prosecute women who have abortions. According to another Journal Sentinel article, he “would let states decide what criminal penalties would be attached to abortions. Ryan said he’s never specifically advocated jailing women who have abortions or doctors who perform them, but added, ‘If it’s illegal, it’s illegal.’ ”
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33 comments
"Is this the future a majority of American voters want?" No, of course not. But that's not the question - the question is whether this is the future enough Americans THINK they want to get these two Dudley-Dorights elected. Because, here's the thing - the triumph of sound bite individualism in the minds of working class voters is far more powerful than a lot of people want to admit. Amongst white male workers in particular (and shirkers for that matter), the notion that they are, individually and if unfettered, fully able to take care of themselves and their family through anything life throws at them, and the only thing making that difficult or impossible for them is government interference and favoritism (to anyone who isn't a white male worker) is pretty deeply ingrained. Romney/Ryan only need 2/3 of those folks, along with their guaranteed take of the ideologically frozen right, to win. If I set apart my compassion for others and concern for the future of my children's and grandchildren's generation, I could almost wish they all get what they think they want. A Romney/Ryan administration with a Republican House and Senate, and the unabashedly ideological Supreme Court we have (and would solidify with a Romney/Ryan administration), would soon enough make the case that the United States can duplicate the Russian gift for misgovernment of the oligarchs, by the oligarchs and for the oligarchs, if we only put our (greediest) minds to it. Why should government be concerned with the general welfare? The serfs will survive in their dogged sort of way. They always do.
- IowaBeauty
August 11, 2012 at 9:25am
This will be a great national debate and if the President learned anything about the difference between getting the policy right and getting the message out, now is the time to show it. I was irritated with a prior President who advised us to rely on what the British knew about Saddam Hussein when our own intelligence knew better, or made selective false leaks to the press to influence us, or told us there were 60 stem cell lines as a reason to cut off scientific research that would help us. Romney and Ryan already provide proof that they would continue the treatment of us as if we are stupid.
- Nusholtz
August 11, 2012 at 9:36am
I can hear the cheering in Chicago all the down in Texas. "Romneyhood on steroids. We win!"
- turntxblue
August 11, 2012 at 9:59am
This also tips the scale in Massachusetts. Undecided voters are trying to guage how much they need a populist in Washington. We can hold the senate and the house is now truly in play.
- turntxblue
August 11, 2012 at 10:08am
Repeat of my post on the rebranding web site: You may agree with me that Romney's political views are bad for the country, but regardless of your opinion about his politics you must admit that he is not stupid, quite the opposite. At the very least, his choice of Ryan will stir an enthusiasm among the hard right that will be worth tens of millions in additional campaign contributions and countless (probably millions) of hours of volunteer campaign work. Money and campaign labor are the key factor in close elections -- and this is a close election. So now is the time for all the commentators on this web site and their email buddies to step up to the plate -- do what you can to fight back. I'm sending Obama an additional (sadly, modest) contribution today, and will add to my schedule of volunteer work for the local Democratic party. I urge everyone who posts here to do the same. Sending a contribution (even only a few dollars) and volunteering (even only a few hours) are far, far more important than a lot of speculation on this web site
- PeteBeck
August 11, 2012 at 10:13am
I've been signing up Obama volunteers in Florida by phone for several months now. It's been like shooting fish in a barrel. I expect many more callbacks now.
- turntxblue
August 11, 2012 at 10:51am
I am with Iowa on this, I will even go further, if Romney wins then Democrats should not contest the Republican budget, I know it will be an absolute nightmare but this is the only way to get through the thick headed white trash teabaggers that Republicans have no interest in their needs. If America elects these two genuine pieces of human shit, then they deserve the hell they get.
- blackton
August 11, 2012 at 11:20am
Great article, and a great cautioning post by Iowa. But I'm more confident today than I was 24 hours ago of an Obama win, and even of positive ramifications for Congressional races. Why? Because even on the level of the sound bite, this works well for Obama. Before picking Ryan, Romney could still try to finesse matters, (falsely) presenting himself as a responsible moderate alternative to Obama, remaining kind of vague about what he'd actually do while in office. Now he's thrown that whole advantage out the door. Ryan's plan, which lends itself to sound bite criticism, now becomes a big focus of this campaign. Romney's previous, somewhat sound strategy was to make this election about Obama's economic performance. It might not have worked out, given Romney's weakness as a candidate and how unlikeable he is, but it still had a chance if he ran a strong campaign in the fall and did decently in the debates. Now the campaign is much less a referendum on Obama, and much more a comparison between two candidates. But what's even better for the Dems is that the comparison is in some ways Obama versus Ryan (in the form of the Ryan plan). At the risk of seeming over-optimistic, and granting that many things can still go wrong, Obama is getting the best of two worlds. On the one hand, some truly lousy ideas to attack, as articulated by Ryan. But on the other, a truly unlikeable candidate to contend with, in the person of Romney. If it were Ryan's more pleasant personality and Romney's (one-time) more moderate ideas, it would be much rougher going. Still, again, mustn't get complacent...That's the one thing that could still undo Obama and the Dems.
- Thunderroad
August 11, 2012 at 12:04pm
"I am with Iowa on this, I will even go further, if Romney wins then Democrats should not contest the Republican budget, I know it will be an absolute nightmare but this is the only way to get through the thick headed white trash teabaggers that Republicans have no interest in their needs. If America elects these two genuine pieces of human shit, then they deserve the hell they get." I wish it were that simple. These lower class voters who would have voted for Romney and Ryan did so because they don't think they are getting much from the government in the first place and are resentful of those who do get anything. The list is long in their minds I have spoken to many of them) Retirees, (selfish people) the disabled (or those who fake disabilities as the conservative radio likes to preach), illegal immigrants (as they have been told) minorities (not my kind), etc. Add to this right wing propaganda that baby boomers are selfish and don't won't their (the poor's) grandchildren to get anything. Making social life worse seldom works to the advantage of progressive causes: it just as often works to the advantage of demagogues. We need to get the word out that Romney is as extreme as his VP pick or Rick Perry or Rick Santorum.
- arnon1
August 11, 2012 at 1:28pm
Paul Ryan worked with the late Jack Kemp, the jolly supply-side guru. Paul Ryan believes that only economic growth will enable the US to pay its debts. He also believes that a reversal of the aggrandizement of power by government is necessary to restore creativity and liberty to business and the population at large. This is his view. On the other hand, the Democrats believe that regulations and government control is a superior way to run the United States. I wonder whom the Founders of this country would prefer: Romney/Ryan or Obama/Biden?
- john336
August 11, 2012 at 4:11pm
Oh please. Ryan's economic growth would destroy the environment while at the same time victimizing people who've already worked our entire lives. Essentially, the poor, the sick, the old, women, kids, ordinary workers - you know - the majority of Americans in toto would be expendable. The country itself would fall into 3rd world status as there's no money for infrastructure, education, environment, health, even marginally secure old age. Is it worth it to you guys? Do you think the Founding Founders REALLY would approve of this immorality? I suppose you could argue that on the basis that women couldn't vote and people owned slaves back in the day. Again, is that the past you admire?
- Sophia
August 11, 2012 at 4:27pm
John, I'm fairly sure nearly all Democrats agree that economic growth is the best way to get out of debt. At issue is whether economic growth is likely to result from tax cuts to the wealthy coupled with destruction of public education, neglect of infrastructure, and removal of the social safety net. We've been doing supply-side for 40 years, and are still waiting for that wealth to trickle down.
- krlong014
August 11, 2012 at 4:32pm
PS I am getting damn sick and tired of this "Founding Fathers" bullshit. Allow me to repeat this salient fact: the sainted Founding Fathers allowed slavery, the ownership of human beings and their degradation. Women had no right to vote. Women were therefore not fully human. We have, hopefully, evolved since then (unless we are far right wing Randians that is, who apparently think it's ok to throw people's lives away and who believe in some magic world in which THEY are Supreme Beings who don't live in a civilization that gets contributions and needs contributions from each and every one of us.) Anyway, I think the Founding Fathers would have evolved by now and would be aghast at Ryan.
- Sophia
August 11, 2012 at 4:32pm
Oh yeah. As to supply side economics: give us a break PLEASE. Trickle down doesn't work, what's happened instead is an absolute gusher from the bottom and middle to the top. It's obscene and you, John, should be ashamed of touting this immoral failure to people who can read.
- Sophia
August 11, 2012 at 4:34pm
As this day progresses I get more convinced of what I thought from the get go, that this is a bad pick for Romney, meaning in part it'll rev up his base true but Obama's base too and that Romney will increase the daylight between himself and independents, who are centrist by definition. I'm increasingly stumped over what the strategic rationale for the pick is-- I reject the thesis that it's Romney setting up a scapegoat for his inevitable loss, which loss is looking more lkely to me today but is hardly inevitable.
- basman
August 11, 2012 at 4:38pm
"the process of a human spermatozoan penetrating the cell membrane of a human oocyte to create a human zygote, a one-celled human embryo, which is a new unique human being" Simple, huh? But way down in the fine print we find: "Disclaimer: uniqueness of the new one-cell human being may not apply in cases to monozygotic twinning (one unique human being splitting into two unique human beings) or chimerism (two unique human beings merging into one unique human being)." The fools can't even get basic biology right.
- krlong014
August 11, 2012 at 4:41pm
"Paul Ryan believes that only economic growth will enable the US to pay its debts." That's fine, john, and many liberals would stand behind that basic assertion. Economic growth, however, that consists of another financial bubble will be useless and even dangerous, and even a more intelligent type of growth can be hampered by failure to invest in education, health, or infrastructure. And that's where you need government, as the private sector is not going to come up with those on its own.
- ironyroad
August 11, 2012 at 4:58pm
One other point about Romney/Ryan supply-side economics: let's be generous and suppose that their goal is to grow the economy to pay down the debt, and then let's be even more generous and assume that their plan would actually grow the economy. But ever since the supply-side era began in 1980, the benefits of whatever growth there's been has been concentrated in the upper few percent of the income distribution. Income growth among everyone else has stayed flat. So how, then, do we pay down the debt by increasing the tax burden on those whose incomes are flat, while decreasing the tax burden on the few whose incomes are actually growing? It's not only immoral, it just makes no sense.
- krlong014
August 11, 2012 at 4:59pm
That's right, Irony, Ryan's and Romney's "economic growth" mean: growth of the financial sector only. Their growth will finance manufacturing jobs in China and elsewhere but not in the US.
- arnon1
August 11, 2012 at 5:03pm
Iowaeauty writes: "If I set apart my compassion for others and concern for the future of my children's and grandchildren's generation, I could almost wish they all get what they think they want." Yeah, that's what I think often too - let the stupid bastards live with the consequences of how they voted. Which would be fine, except for all those innocents not responsible for the election's outcome. So, in the end, one has to do what one can to oppose the forces of darkness, & hope for the best.
- Haole45
August 11, 2012 at 7:20pm
Haole Well, note that I said "If .... almost ...." In the end, I will vote, donate, and call to make sure this doesn't happen.
- IowaBeauty
August 11, 2012 at 8:59pm
"I wonder whom the Founders of this country would prefer: Romney/Ryan or Obama/Biden?" Why, Obama/Biden, john, because Romney/Ryan are not the least bit interested in creating jobs, which grow the economy. The only thing they care about is making rich people richer. And they and their GOP fellows are doing a fine job of that--in these times of almost no job growth. Question: how does the U.S. pay off its debts when the GOP wants to cut its income drastically, starting with the refusal to create jobs that create tax revenue? House Republicans were offered an opportunity by Obama to eventually create millions of jobs with the Jobs Act, and they said, "To hell with that. That would help Obama get re-elected and make CEO's pay taxes on their corporate jets. NO! NO! WE WON'T GO!"
- magboy47.
August 12, 2012 at 12:49am
This was an excellent (but frightening!) article that was right on target. After reading it, I decided to take the plunge and paid for a 2-year subscription. How can people hate President Obama so much that they are willing to support a platform like this?
- Tawny_Cat
August 12, 2012 at 1:40am
Paul Ryan is 42 years old. We could be stuck with that charlatan for a long long time.
- amidut
August 12, 2012 at 8:02am
The comment recorded before North Carolina's vote to ban same sex marriage explains the underlying philosphy, which is Ayrian, Aynian, and Assinine to the max. The comment was the gay marriage ban and birth control limitations are to force white women back into significant birth rates so our race won't become the minority. Would you not just love to hear the veiled racist and misogynic remarks at that "brain"storming session? This time Rosie will not be saving America from the Germans and Japanese, but from diluting historical caucasian dominance by birthing more white males........a breed not becoming insignificant fast enough in my book. Just more racism and sexism from fanatical right wingnuts. Sorry dumb dudes, but the cow is definitely out of the barn, walking on two legs, and earning most of the family's income by now to give up control over our sole control over reproduction. Birth control? Check. Abortion? Check. Sperm banks? Check. And enough or our own income to support ourselves? Check mate!
- smabry03
August 12, 2012 at 8:44am
Ha Ha Ha Ha Ha
- CRS9TNR
August 12, 2012 at 11:20am
Tawny_Cat, bravo, and tell your friends. I seriously doubt the majority of Americans know what's in Ryan's plan despite the fact that House Republicans, to a person, voted to support it. It that doesn't say something about the modern GOP what does? Also bravo smabry03, I hope women, if they haven't figured out the GOP yet, will now GET IT and go out and vote in droves. Sorta wondering why CRS9TNR is laughing? This is not funny. The Ryan impact on Americans would be huge and damaging.
- Sophia
August 12, 2012 at 11:29am
I’ve rarely read such nonsense as I see in this article and many of the comments. We are the richest country in the world BECAUSE of the supply-side measures and policies that have been in effect for nearly all of the past 236 years. So-called “trickle down” is responsible for that growth and that aggregate wealth. So-called “trickle down” not only works, it is the ONLY thing that works. Capital creates jobs, not government and not the “poor” or “middle class.” Period. To do that, capital must take risks. The only thing that justifies such risks is rewards. Period. Ditto China. China is the most successful supply-side economy in history. The reason China has grown at an average rate of 9.32% a year since 1989 is the supply-side measures it began putting in place in 1982 – measures that freed entrepreneurs to take risks and create jobs and let them keep most of the fruits of their risk taking through low tax rates. China is very entrepreneurial. An article in the July 28 issue of The Economist pointed out that according to the Global Entrepreneurship Monitor, in 2010, “early-stage” entrepreneurs made up 14% of China’s adult population, compared with 17% in Brazil and 7.6% in the U.S., but only 5.8% in France, 4.2% in Germany, and 2.3% in Italy. Is there a correlation between those numbers and the economic growth rates of those countries? It would seem so. Look around you. Live in a city or town? Wake up!! WHO and WHAT do you think created nearly everything you see? Nearly every building, every physical thing except trees, grass, and flowers, every product or service you use every day, is the result of so-called “trickle down” - the result of either risk taking by those who have capital or the financial support (including taxes) of those who have capital and who with that capital created jobs and the products and services you use every day - created wealth and income from which to pay taxes and to thereby fund the government’s products and services you use every day. The ultimate source of all that, including the government, is the private sector and the additional wealth it creates by risking the wealth it already has. Right now, the risk/reward ratio for job creators (capital) in the U.S. is out of whack. Too much risk, not enough reward. To create the 12 million new jobs Romney has promised, all he has to do is reduce the risks and increase the rewards. Period. That’s what Obama doesn’t get and why he is failing. A business-friendly government that eliminates unnecessary impediments to business reduces the risks. Tax cuts for job creators (the “rich” or potentially rich) increase the rewards. All government has to do then is stand back and let it happen. Entrepreneurs don’t need new demand to create jobs. To a person, they believe that if they build it, demand will come. Entrepreneurs hate inactivity. They want to be creating, building, doing. But right now, they are on strike. Like I said – too much risk, not enough reward. Where will the incremental aggregate demand come from to justify the incremental production from the 12 million new jobs? NOT from lower savings or increased borrowing of those already employed, which would be ill-advised, but from the incremental wages and salaries CREATED BY THE NEW JOBS! The Obama Administration seems not to grasp that simple equality, although a third grader could understand it. That equality has been the driving force behind every economy in history. Maybe with the additional production, wealth, and taxable income created by those 12 million new jobs, which would move our economy closer to its full potential, we could afford many of the entitlements voters say they want or want to preserve. That’s the ONLY way we could come close to affording the spending we are doing already. EVERYONE will be better off if entrepreneurs (the “rich”) create those 12 million new jobs. Why would ANYONE not want that to happen? Sorry, them’s the facts.
- truthman
August 12, 2012 at 12:02pm
Guess it depends on which part of the elephant the blind man touches. Cohn is hysterical about anyone who even talks about spending limits. At National Review online, the home of corporate conservatism, Ryan is praised as a pro-war//invade the world neo-con, who might nibble at deficit reduction. At libertarian LewRockwell, readers are reminded that Ryan voted for TARP bailouts, the Medicare prescription plan, and Patriot Act assaults on the Constitution. And all this about a man who is a candidate for the least important job in Washington.
- raygun
August 12, 2012 at 12:13pm
"As a plan to reduce government debt, it made no sense. It simply took money from one part of the budget and spent it on private accounts, at a cost of two trillion dollars in transition expenses. But, as an ideological statement about the proper relationship between individuals and the federal government, Ryan’s plan was clear." Privatization of Social Security is, of course, not a plan to reduce government debt. But neither is it just "an ideological statement." It is a pragmatic plan to create a new revenue source for the financial services industry by requiring Americans to invest in the private market through payroll deductions. Privatization has been an ambition of the industry ever since the 1980s -- when they started to realize\ that the post-War gravy train of investment growth, spurred by that era's rising tide of middle class prosperity and pension fund growth, was coming to an end. (In the late 80s, for instance, financial industry marketing analysis was predicting that Baby Boomers would retire with half the assets of their WWII generation parents -- a prediction which probably looks unduly rosy now.) Privatization is good old interest group politics at its most egregious best. American voters are being scammed.
- esmense
August 12, 2012 at 5:06pm
That's somewhat of a fairy tale, truthman (?). Over the last 20 years or so there has been indeed a great deal of weath created which (a) has accrued to a very small slice at the top of the tree and (b) is concentrated in a sector, finance, which started moving away from its primary job of providing capital for industry and investing in its own clever tricks. The regulation was minimal, the rewards large but out of all proportion to the risk taken, and in the broader economy the trickle-down was more of a tidal surge as business shipped jobs overseas. This is in contrast to the 40 or so years before that, which as a result of a number of things including FDR's New Deal saw a massive increase of general middle-class wealth throughout the nation, not just for an already rich minority. It is noticeable that this period of prosperity was kicked off by major government reforms and infrastructural investment that benefited a broad mass of citizens and can be seen to this day. It's why people still drive out to visit the Hoover Dam. When was the last time you drove out with the family to see a Bush tax cut?
- ironyroad
August 12, 2012 at 9:22pm
Well if we don't fix the dams pdq we won't be able to visit them either. Or the cities to which they supply electricity, or the farms which depend on irrigation.
- Sophia
August 13, 2012 at 6:08pm
Ironyroad, I disagree with some of what you wrote. As I said, the wealth created during the past 20 years is being underutilized because job creators (the "rich") are on strike, despite one of the lowest costs of capital (interest rates) in history. Why? Too much risk, not enough reward. Capital has NOT moved away from its primary job of financing industry. As you've probably noticed, industry is already swimming in cash - some $2 trillion dollars in public companies' accounts, last I looked. Again, those resources are not being used to create new jobs because companies see too much risk and not enough reward. It's the same with small business and individuals - trillions in money market funds are not being used to create jobs and finance growth, despite virtually zero interest earnings in those accounts - too much risk, not enough reward. Solution? Decrease the risks and increase the rewards. The other items you mentioned: Jobs being shipped overseas did not prevent the unemployment rate under President Bush from dropping to 4.4% in October and December of 2006 and again in March and May of 2007, the SECOND LOWEST UNEMPLOYMENT RATE IN HISTORY. That was before the bursting of the housing bubble and the resulting financial crisis, for which Bush, congressional Democrats, federal and state regulators, the mortgage finance industry, the rating agencies, large banks and investment banks, and many mortgage borrowers share the blame. Jobs shipped overseas are those that can be done more efficiently and with less cost in other countries. As you probably know, doing that not only PRESERVES jobs in the U.S. by keeping U.S. companies competitive in global markets, but also makes the products and services that business sells to U.S. consumers more affordable, which lower-than-otherwise prices raise EVERYONE'S standard of living. Despite that accepted economic view, the Obama Administration insists on demonizing business for outsourcing jobs, something that misleads the public into thinking business is not acting in the public's best interest, when it fact it IS so acting. The massive increase in the wealth of the middle class since FDR's time is NOT due to the growth of Federal spending or the New Deal, but to the productivity gains and jobs created by private businesses and entrepreneurs to expand existing businesses and start new ones and to develop, produce, and market an almost infinite variety of new products and services, efforts that raised the living standards of EVERYONE immeasurably, including the middle class. Again, it was not government that increased the wealth of the middle class, it was business - entrepreneurs and business. How could it be otherwise? Even the infrastructure you mentioned, like the interstate highway system and Hoover Dam, were paid for either by bonds and other borrowing from the private sector or by taxes collected from the private sector - taxes on income and wealth generated by the private sector. Without the efforts of the private sector, led by the initiatives of business and entrepreneurs, there would be no production, no income, and no taxes for the government to collect.
- truthman
August 14, 2012 at 2:35pm