As noted in a previous post, I interviewed Paul Ryan about two years ago. At the time — obviously — neither of us had any inkling he’d be a future vice presidential candidate.
Almost the entire interview was focused on Ryan’s economic thinking — not just his detailed economic plan (A Roadmap for America’s Future), but the philosophy at the bottom of his economic views.
What about his detailed plan? As chairman of the House’s Committee on the Budget, Ryan knows details. He has been dubbed Congress’s budget hawk, a man determined to do whatever it takes to keep the U.S. from experiencing the kind of catastrophic economic collapse now dragging Europe’s nations, one by one, into their self-dug economic holes.
His chant: We don’t want to become Greece. Or Spain.
We have an unsustainably, horrifically large debt — if we take a peek at the ever-spinning debt clock, more than $16 trillion and counting with dizzying rapidity. Something has to be done, Ryan argues, and not a little pinch here, a little snip there, but a real, deep budget cutting.
And he’s right. We can’t keep spending billions of dollars more than we take in. We can’t keep spending recklessly today, and then handing the bill to our children and our children’s children.
We have a moral obligation to do what it takes, and what it takes is going to be painful for everyone.
What we can’t do, Ryan makes clear, is spend our way out of the problem in an effort to “stimulate” the economy. At best, that provides a momentary “hit,” like a shot of heroin to a hopeless addict.
Nor can we make up for lack of funds by simply printing more money (and more, and more, and more).
Why? We don’t want to become the Weimar Republic, where, because of hyperinflation, a loaf of bread cost 200 billion marks in 1923.
The Weimar Republic made two signal errors, the same ones we’re making today. They ran up an enormous, crushing debt — part of it owed in war reparations imposed upon them after their loss in World War I, part of it incurred in expensive and popular domestic social programs.
Instead of paying its expenses up front, the German government borrowed its way into a bottomless hole of debt. Spend now, pay later.
And then, rather than cause anyone any pain by cutting back on spending and borrowing, the government ramped up the printing of money. In 1923, at the height of inflation, the Germany’s government was running over 1,700 printing presses, day and night.
Warning light. We owe more than $5 billion to foreign countries, not in war reparations, but simply because we want to spend way more than we take in.
Our government’s printing presses have been spinning with three waves of “Quantitative Easing,” as it’s now called (and the third wave, QE3, has been declared “open-ended,” i.e., there’s no off button on the printing press).
We don’t want to become Greece, Ryan argues. We don’t want to become Spain. And we don’t want to become the Weimar Republic. But everything we’re doing now, and have been doing for over a decade under both Republican and Democratic administrations, points in precisely those directions.
Now that brings us back to Ryan’s detailed economic plan, “A Roadmap for America’s Future,” or more recently, his committee’s “The Path to Prosperity.”
Whatever we think of the details of either plan — and they should be and will be debated in detail, if Romney and Ryan win the election — we must understand one thing to understand Ryan: He believes that we are in a state of economic peril where something drastic needs to be done.
The main culprits are the various entitlements — Social Security, Disability Insurance, Medicare, Medicaid, Food Stamps — that consume about 62% of our current budget. These are the same kind of social welfare programs that are helping to sink the countries in Europe.
Ryan is not, he insists, going to cut the ropes on our society’s safety net. Rather, he doesn’t think that the social safety net should “become a hammock.” The point of the safety net is to help people in real need, not to fund a permanent welfare class.
But Ryan also argues that something has to be done about corporate welfare, the millions and millions of dollars misspent by the government in subsidizing big corporations who’ve got too many congressmen in their pockets. So, the axe must also be taken as well to “crony capitalism,” the collusion of big business with big government.
What about Ryan’s economic philosophy, the philosophy grounding his approach?
As he revealed in our interview, he’s got three sources: the Austrian school of economics (primarily Friedrich Hayek and Ludwig von Mises), the Catholic principles of subsidiarity and solidarity (which I’ve covered in some detail in previous posts) and Ayn Rand.
How do these all fit together in Ryan’s mind?
Insofar as I could tell from the interview, and from what I’ve read, I’d say that Ryan unites the Austrian school with the Catholic principles. That is, Ryan believes that economic questions and problems are best addressed at the local level, rather than big government trying to control the economy from the top-down. That accords both with the Austrian emphasis on economic decentralization and the Catholic principle of subsidiarity with it’s emphasis on local economic control rather than strongly-centralized economic control.
Thus, when Ryan touts the free market, what he means (following Hayek) is not an unrestrained free-for-all of corporate greed, but an economy built up largely from local ground without undue government interference. Businesses need to be left free to succeed and fail (rather than being propped up artificially with government dollars). And big business should not be linking up in collusion with big government to stack the deck against smaller, local businesses.
Importantly, Hayek argued that, in fact, the national government should provide a social safety net, but like Ryan after him, it should be constructed for those really in need. In accordance with the principle of solidarity, we need to care for those truly in need, and government has a role to play in that.
But what about the influence of the infamous Ayn Rand?
As I noted before, in my Ten Books Every Conservative Must Read, Plus Four Not To Miss and One Imposter, Rand is the imposter. So I pushed Ryan on his much-quoted hearty affirmations of Rand’s Atlas Shrugged. His answer, as I noted before, was that he rejected her atheism and the atheist underpinnings of her no-holds-barred capitalism, but he greatly admired her affirmation of capitalism and her literary presentation of the degradations of the socialist-welfare state.
So at present, I would say this as my take on Ryan. I think Ryan is definitely inspired by Rand’s literary work (too inspired), but his actual understanding and affirmation of the free market approach comes from a union of the Austrian economic school and the Catholic principles of subsidiarity and solidarity.
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Curious, Dr Wiker. Social safety net accounts for 62% of government expenditure. What part gets cut? Social Security? WIC? Food stamps? Are throwing grandma to the curb? This seems like a very anti-Catholic thing to do.
Subsidiarity, like capitalism or socialism, is a theory. It does not work in practice. Here’s why: Dad has a good job making widgets in the town factory. He and mom have two great kids a house and go to mass every Saturday evening. One day, dad and the rest of the workers get a notice that the owners of the widget factory have found cheaper labor in some country most cannot spell let alone pronounce. Dad is out of a job and mom cannot find work because the supporting infrastructure is shutting down with the factory. The local parish cannot help all of the parishoner out of work. The town just lost a huge taxbase and cannot help the unemployed worker or their families. The county can provide some health care but it too cannot provide any sustenance. The state cannot provide. The federal government must step in. When the smallest units failed who steps in? That is the failing of subsidiarity. It requires a consistently employeed person or persons to maintain the smallest unit (family). Where it really fails is the condemnation of the corporation (if it is indeed a person)for disregarding its employees.
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If it is true that corporations are people, should they not be held to the same moral standards? Meaning unless otherwise stated, I should be able to go to my place of employment do my assignment to the expected standards and expect my employer to not move the place of employment to an overseas location. That the relationship between me and my employer should be one of mutual respect and support. That the corporation should love others as it would love itself.
Corporations do not do that.
You can balance a budget by reducing spending or increasing income or a combination of the two. Increasing income by taxing the richest like Romney and his bankrollers is a no-brainer.
A Ryan budget would cut health and welfare support for women and children. It will probably increase the demand/pressure for abortion.
If you have ever contributed to a pregnancy crisis center you are trying to provide practical help in the areas of pre-natal health, confinement cost, infant health as well as food, clothing and housing. You acknowledge that providing these items will save unborn lives.
If a government increases or reduces the above types of support what effect do you think this will have on abortion pressure?
A Ryan budget will lead to more unborn deaths.
For a more orthodox view of subsidiarity see Mark Shea “Subsidiarity - True but not the whole story”
http://www.ncregister.com/blog/mark-shea/subsidiarity-true-but-not-the-whole-story
“The main culprits are the various entitlements — Social Security, Disability Insurance, Medicare, Medicaid, Food Stamps — that consume about 62% of our current budget.”. This is an absolute LIE, fabrication, falsehood.
60% of the budget is spent on the MILITARY. Perhaps if we stop bombing innocents in Pakistan, stop invading countries (Iraq, Afghanistan) and tax the hell out of the big banks we could afford to care for the sick, old and infirm. What a novel christian idea.
http://www.archchicago.org/conciliation/fyir/fyir.aspx?postid=143
I am appalled. You are no christian Benjamin Wiker. You are an right-wing ideologue in sheeps, er priestly clothing. The Lord God will judge you and how you have treated your fellow man. God have mercy on your heartless soul.
starzec ,
My Mennonite friends do support every member of their congregation who’s out of work.They either find work locally or relocate to another Mennonite community where there’s employment.Mennonites do not compete against each other in business.
Not only does the church support their own struggling families, they also support people in need outside of the Mennonite community.
We might learn a bit from them.
We are so far over budget that we are going to need to make cuts across the board. Yes, military included. Cutting out unjust wars and not needing to police the world (100+ foreign military bases) would save a lot of money. You are wrong, though, Jerome. Military spending seems to be in the 18-24% range, depending on where you look. A FAR CRY from 60%. Still, a major expenditure. Ron Paul had a good plan to balance the budget. Neither Romney nor Obama would even try. Even Paul Ryan’s plan wouldn’t see it balanced for another 10 years or so…that’s too long.
End hopefully of Catholic tea party threads. I felt repubs would slowly increase abortion numbers because their inflation plus one raise of medicaid is an actual cut since both medical inflation and nursing home inflation are double normal inflation and medicaid pays for 37% of US births. If we have four more years of these wacky right wing Catholic essays on the blogs, we are really the arrested group Toynbee saw us as in Study of History.
Sadly, the Church is now taken over by the extreme right wing of the world. Young potential reformers were sent packing, Scicluna to Malta, Tobin to the USA. The new order “Opus Dei”/Randian/Katholics have taken over. They are silencing critics around the world, from Peru to San Diego. Not a single bishop was censored for covering up abuse of children by people like Maciel, no investigations are to be conducted, because there are too many “secrets”, according to the papal delegate, DePaolis. But the family man that tried to blow the whistle is in jail, no pardon for him from the OD detective, Herranz.
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“Coercion”, “shamelessness”, “intransigence” are the primary new virtues, as dictated by the new prophet, “saint” Escriva de Balaguer. They will continue to promote their new commodity: “holiness in service of $$$$”. According their prophet’s double speak: poor=rich, rich=poor. Now one becomes “holy” by becoming rich and enjoying the “ordinary little things” that comes with it (like a little ordinary Lamborghini).
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And now we have the “fruits”, people were disgusted, and the pro abortion president was re-elected. But “Opus Dei”/Randian/Katholics will march on.
...there is just too much $$$ to be made on selling the “new Holiness”
I wish all you experts would stop being dramatic and work on building the church of Christ by being simple people of
Love and compassion . Rich and powerful and fear-mongering people are something Jesus seemed to have no patience with. A matter of great shame is the podophilia. Seems you guys have more than enough problems within the Church than to get worked up about others trying to do good
To Leo (and others who would say that “increasing taxes on high-income earners is a no-brainer):
Your conclusions on these topics are a bit different from mine. Since your conclusions are different, I suspect that our thinking diverged somewhere along the chain of reasoning. I’d like to figure out where. So, if you’d be so kind, I’d like you to answer three questions:
QUESTION 1: Has the U.S., in previous years, taxed the highest-income earners at significantly higher rates than now? (I know this; I want to see if you do.) What was the result of doing so, in terms of changes in long-term revenue? What was the result on GDP? On GDP per capita? How about tax reductions on the highest-income earners? What results have those historically had on long-term revenue? On GDP? On GDP per capita?
QUESTION 2: What do you make of Hauser’s Law? If it is really correct that 19.5% is the long-term moving average for the percentage of GDP that we can convert to revenue, what are the implications? For example, if you know you want to spend X amount of money each of the next ten years, but that amount of money exceeds 20% of your current GDP…what do you do?
QUESTION 3: Do you know what percentage of GDP federal entitlement spending is expected to reach by mid-century? Do you know what percent of the federal budget entitlements will represent at that time?
Hmm.
I’m hearing crickets.
I am surprised at the vitriolic responses to this post. The facts are that the government has been spending more than it has been taking in for decades (with rare exceptions, which have always come in periods of prosperity). This cannot go on indefinitely. At some point, either 1)revenues must go up or 2) spending must go down or 3) both.
Was life really so barbaric in 1990? or 1980? or 1970? The truth is that since the 1930s, we have been steadily adding seats at the Federal Buffet, creating more and more ways for folks (including big business) to receive various kinds of assistance or benefits. We have all been encouraged to believe that these benefits are free, but the truth is that the costs are high and will be getting very much higher if something is not done.
I can only assume that every vitrolic response against this article is written by someone who gives very generously to their church or small charity to ensure help is provided for the poor and the sick. I assume most of those who have written in such angry tones are taking a short break from the soup kitchen and SVP visiting cycle.
I like in the UK where the cost of living makes the average American’s eyes water. We live on my husband’s wage as my adult children struggle with minimum and less than minimum wage.
I am receiving Disability Living Allowance. Lucky me!
I became seriously ill ten years ago - lost my jobs and was left housebound. If my SIL who knows the system hadn’t helped me - who knows I would still be housebound, or dead. I had to fill in a hole pile of the most humiliating forms in which I had to lay out all the things I could no longer do. The forms were sent off, thanks to my SIL and I heard nothing.
Weeks and months went by and I was still seriously unwell and struggling.
Finally phoned about the DLA and finally received a letter telling me to go for a medical at the benefits centre.
I knew the building with it’s massive flight of stairs and had no idea how I was supposed to get into the building so I phoned. I asked where the wheelchair access was.
They had NO wheelchair access and as a result of that, very bizarre, phone call I received the DLA with back pay.
So I should support all you “liberals” shouldn’t I?
Well I dont.
If my husband was allowed to bring home the wages he has worked for we wouldn’t need DLA to cover my meds, powerchair and equipment.
If married people in the UK weren’t taxed 40% more on average than others we could pay the bills and have my meds and needs met.
If there was no massive overpaid bunch of people who couldnt care less about sick and disabled people deciding whether I am “disabled enough” to recieve benifits without ever having set eyes on me, then I wouldn’t have needed to go through the deep humiliation of having to say what I can’t do any more. Where’s the basic care for human dignity in that?
True charity, that the Church talks of, is given to those in need while protecting dignity and valuing what us cripples can do, rather than measuring what we can’t do.
If I lived in a country that taxed less and didn’t use us sick cripples as political pawns in a nasty little game, I would never have struggled with that and wouldn’t be living now waiting for the shadow of Atos to fall on me.
The benefit system doesn’t support those of us who need it. We shouldn’t be forced into a position of needing it.
Families should be caring for their own and enabled to do so through a tax system that doesn’t penalise hard working men with disabled wives and dependant children.
So as a benefit scrounging scum person (according the UK press and Govt) I just want to say all those “bleedin’heart liberals” are causing the extra weight of my cross, not lighening it.
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