Saletan’s elegy for Paul Ryan’s DOA budget fantasy

By William K. Black

William Saletan has written a column that epitomizes the media’s bizarre infatuation with Paul Ryan.  Saletan entitles his piece “Why I Love Paul Ryan.”  His intro summarizes his attraction to Ryan:  “He’s what a Republican should be: an honest, open-minded, solution-oriented fiscal conservative.”

Here is how Saletan attempts to show that Ryan is worthy of his unconditional love.

“Ryan is a real fiscal conservative. He isn’t just another Tea-Party ideologue spouting dogma about less government and the magic of free enterprise. He has actually crunched the numbers and laid out long-term budget proposals. My liberal friends point out that Ryan’s plan leaves many details unclear. That’s true. But show me another Republican who has addressed the nation’s fiscal problems as candidly and precisely as Ryan has. He’s got the least detailed budget proposal out there, except for all the others.”

Ryan is the leading Tea Party ideologue.  He is an Ayn Rand devotee.  (His attempts to deny that prove that he is dishonest.)  No, he did not “actually crunch[] the numbers and la[y] out long-term budget proposals.”  You may read reports that the Ryan budget plan achieves a balanced budget in 2040.  That is not correct.  He created fantasy numbers, instructed the Congressional Budget Office (CBO) to suspend disbelief (and its normal methodology, which actually crunches the numbers) and treat the fantasy numbers as real.  He had to order the CBO to accept his fictional, numbingly over-optimistic numbers as reality in order to achieve a faux balanced budget nearly three decades from now.  Absent the fictions his non-budget never eliminates the deficit.  Ryan’s deliberate misuse of the CBO to attempt to lend credibility to partisan fantasy numbers is a cynical act of dishonesty.  The CBO issued this warning about Ryan’s manipulation of the budget estimation process.

At the request of the Chairman of the House Budget Committee, Congressman Paul Ryan, the Congressional Budget Office (CBO) has calculated the long-term budgetary impact of paths for federal revenues and spending specified by the Chairman and his staff. The calculations presented here represent CBO’s assessment of how the specified paths would alter the trajectories of federal debt, revenues, spending, and economic output relative to the trajectories under two scenarios that CBO has analyzed previously. Those calculations do not represent a cost estimate for legislation or an analysis of the effects of any given policies. In particular, CBO has not considered whether the specified paths are consistent with the policy proposals or budget figures released today by Chairman Ryan as part of his proposed budget resolution.

The amounts of revenues and spending to be used in these calculations for 2012 through 2022 were provided by Chairman Ryan and his staff.

Even that was not sufficient to make Ryan’s budget “work” so he left huge blanks in his non-budget, e.g., tax revenues, where he wished away the budgetary difficulties he claims to be resolving.  Saletan’s defense of Ryan’s putative wonkiness consists of two arguments that do not pass even the most basic logic tests.  First, he tries to diminish the Ryan’s fantasy numbers and budgetary black holes with the concession that “Ryan’s plan leaves many details unclear.”  No, it leaves massive, core budget numbers blank or created by make believe.  Ryan made up the numbers and knew that he had to order the CBO to suspend disbelief and its normal methodology and to repeat after him:  “I do believe in Fairies!”   Ryan is presenting a Tinker Bell budget.  (Paul Krugman has long emphasized that austerity proponents rely on the claim that austerity will make the “Confidence Fairy” appear and simultaneously reduce the deficit and spur a recovery.  The invisible Confidence Fairy, sadly, has failed to show up in Europe.  Austerity has thrown the Eurozone back into recession and much of the periphery into depression.)

Second, Saletan says that because Ryan’s budgetary non-plan specifies more numbers than any other Republican non-plan he’s the least dishonest Republican.  That is quite an indictment of the Republican Party (and Saletan is a Republican), but it is still a huge slam on Ryan’s candor and competence.

Saletan then states that he loves Ryan because he exposes the budget lies of the Democratic Party.

Ryan refutes the Democratic Party’s bogus arguments. He knows that our domestic spending trajectory is unsustainable and that liberals who fail to get it under control are leading their constituents over a cliff, just like in Europe. Eventually, you can’t borrow enough money to make good on your promises, and everyone’s screwed. Ryan understands that the longer we ignore the debt crisis and postpone serious budget cuts—the liberal equivalent of denying global warming—the more painful the reckoning will be. There’s nothing compassionate about that kind of irresponsibility.

OK, right idea – Europe has just run an experiment with austerity.  It was a disaster.  It has thrown the Eurozone back into recession.  This is what even mainstream economists predicted.  We should learn from that experiment and not mimic their foolishness.  But Saletan, Ryan, and Romney all want us to follow Berlin’s failed strategy.  In fairness, Romney has twice strayed from his message and admitted that austerity at this time would throw the U.S. back into recession.  He quickly fled from candor when his honesty about austerity led Republicans to denounce him.

Saletan’s simile (“just like in Europe”) is premised on the twin false assertions that European nations caused the Great Recession by adopting an “unsustainable” “domestic spending trajectory” and his version of Angela Merkel’s claim that “there is no alternative” to austerity.  Saletan’s version is that any alternative policy constitutes “leading their constituents over a cliff.”  The reality is that nations like Ireland, Iceland, and Spain had several years of budget surpluses as their massive frauds and bubbles grew.  Conservatives regularly praised these nations as the exemplars of neo-liberal rectitude, including fiscal responsibility, and success.  Severe recessions and depressions cause huge budget deficits – not the other way around.  Even Greece is primarily a story of the criminal refusal of their wealthiest elites to pay their taxes.

The Ryan and Romney non-budgets recreate aspects of Greece’s fiscal policies by sharply cutting taxes for the wealthiest Americans (shifting the tax burden toward the working class and exacerbating income and political inequality) and asserting that cutting taxes for the wealthy will increase tax revenues – massively.  The CBO, under normal “scoring” rules would have rejected Ryan’s fantasy assumptions about his tax cuts.

Saletan knows that Ryan is not a “fiscal conservative” on taxes, but a quasi-Greek politician protecting the wealthiest citizens from paying even a remotely fair share of taxes.

[Ryan] has serious flaws. His discipline on spending isn’t matched by restraint on tax cuts. He was wrong to oppose the Simpson-Bowles plan. Democrats will hammer him on the tax side, and he’ll deserve it.

The CBO also would have normally rejected Ryan’s claims that he would slash spending to levels that would (if you credit his claim that he would “protect” defense spending and Romney’s promise to increase defense spending) essentially eliminate federal spending for virtually all non-entitlement spending.  Saletan knows that Ryan’s claims that he would eliminate virtually all discretionary domestic spending is false (and Saletan would be horrified by the results if Ryan’s claims were true).  Saletan says that he loves Ryan because Ryan would cut defense sharply, but Ryan and Romney have subsequently declared defense off limit for budget cuts and Romney has promised to increase defense spending.

(Note: my colleagues in UMKC economics have explained why we do not endorse the CBO’s budget estimation methodology or believe that any reliable projections of this nature can be made over 30 year time periods.  The CBO, during the Clinton-era budget surpluses, was projecting surpluses without end and the retirement of the entire national debt.  But Saletan purports to believe in this process, so it is fair to critique his consistency in having a love affair with Ryan’s given Ryan’s dishonest manipulation of that process.  We have often explained why we find Obama’s fiscal policy explanations incoherent and his support of Simpson-Bowles to be a grave threat to Social Security, Medicare, and Medicaid.)

Saletan rests his final basis for his love of Ryan on a creation myth:  “But this is why God made Republicans: to force a reality check when Democrats overpromise and overspend.”  Ryan voted for Bush’s (as Saletan defines these terms) “overpromise[ing] and overspend[ing].”  Note that Saletan has again conveniently forgotten about the revenue side – where Ryan consistently voted in favor of Bush’s tax cuts for the wealthy that produced large budget deficits.  Under his own creation myth, Saletan should hate Ryan as a traitor to God’s plan for Republicans.  Ryan consistently failed “to force a reality check” on Bush.

It was also Bush’s anti-regulatory policies (compounding Clinton’s anti-regulatory policies) and support for perverse executive and professional compensation that combined to form the criminogenic environment that led to the epidemic of mortgage fraud that hyper-inflated the bubble, drove the financial crisis, and caused the Great Recession and the large deficits.  Ryan and Romney were enthusiastic supporters of each of the perverse structures that caused the crisis and the deficits.  The Republicans never forced a “reality check” when the banks’ senior officers became wealthy by causing “their” banks to make and purchase millions of fraudulent liar’s loans annually.

The Three “R’s” – Romney, Ryan, and Republicans – inhabited Never Never Land throughout the developing crisis.  The budgets they created and supported were invariably Tinker Bell fantasy budgets.  Ryan’s faux budget is not the work of a green eye-shaded accountant crunching the real numbers.  Ryan found it so much more convenient to create fantasy numbers that had no basis in reality but aided his political ambition and his devotion to Ayn Rand’s devotion to Social Darwinism.  The great thing about being the Chair of the House Budget Committee is that Ryan could order the CBO to assume that the fantasy numbers he invented were true.  For someone who (1) was wealthy and wished to minimize his taxes, (2) whose principal donors were extraordinarily wealthy and wished to minimize their taxes, (3) who was an Ayn Rand devotee who believed that taxing the rich was an illegitimate confiscation of their wealth, and (4) had touted the “supply sider” nostrum that reducing taxes on the wealthy increases tax revenues the ability to order the CBO to accept his assertion that sharply reducing taxes on the wealthy would increase tax revenues was a dream come true.

It is easy to understand why Ryan abused the CBO process to create faux legitimacy for his faux budget.  It is difficult to see why even the most credulous journalist would be taken in by such a transparent abuse premised on self-serving fantasy numbers and deliberate disrespect for the truth.  Then there’s the matter of Ryan’s track record.  His predictions about Bush’s tax cuts and the resultant deficits have consistently been proven to be embarrassingly wrong and his endorsement of Europe’s austerity dogma has proven disastrous.  Ryan’s batting average would get him fired at a Single A minor league team.

2 responses to “Saletan’s elegy for Paul Ryan’s DOA budget fantasy

  1. Bayard Waterbury

    Bill, I love your characterization of Ryan’s budget strategy as “DOA” which it is, without a doubt. To me, the most depressing thing is the fact that we live in a Plutocracy where our elected representatives simply don’t represent the common citizen de facto. Because they are so concerned about continuation in office, i.e. winning elections, that they sacrifice anything representing responsibility for making clear-headed decisions to support the entire country, and instead make all their decisions based upon what their political financial supporters desire. Look at reality. Taxes: Overly complicated 16,000 page code vastly favoring the wealthy over everyone else. Military: Undieing support for the MIC, largely controlled by the biggest, most powerful contractors, corrupt, and growing for no good reason except political power and greed. Banking: Reregulated not by reinstating the Glass-Steagall separation between commercial banking and other business, but overly complex and failing to control the single biggest problem, derivatives. Regulators: Largely staffed by appointees who come from the industries they regulate and turn their backs on nearly every major problem, handling the most severe with nominal fines and hand slaps where the violators don’t even admit guilt as a part of such bogus settlements.

    And now we have a “wonky” (by reputation) Congressman submitting a thoroughly specious budget and corrupting the analysis of the theoretically independent CBO by dictating the rules of analysis. It’s like playing a game where one players gets to change the rules any time he is losing.

    The most tragic thing is that if we had a Congress of responsibly governing elected men and women, every problem we have could be overcome by rational actions. If we have a massive deficit, we must raise taxes and the government must take every action possible to encourage economic activity. We need to regulate effectively, efficiently and rationally. We need to prosecute those who would “game” the system for personal gain, like the Wall Street banks that destroyed our economic well-being (as we did in the S&L scandal and Enron, where accounting control fraud led to massive economic destruction).

    In today’s world, none of this or the many other things which should be done to foster honesty, integrity and economic health are pursued. The road to real wealth now has nothing to do with hard work, it has everything to do with manipulating the system without regard to consequences for others. In other words, the Golden Rule has gone the way of all good things. Machiavelli is having his day, and is on a great run, apparently perminently.

  2. “Sooner or later all our games turn into Calvinball”. CALVIN

    See Calvin and Hobbes Cartoon