We come not to praise Paul Ryan’s career, but to bury it.
None too soon, the most fiscally irresponsible politician America has ever seen said today that he will retire from Congress (at 48 yet) via not seeking re-election to either Congress or the House speakership he took over in 2015.
Here’s his legacy: He spent his career, first as chair of the House Budget and Ways and Means committees, and later as speaker, devoted to cutting taxes so much it would force deep cuts in popular entitlement programs, mostly Social Security and health insurance, that actually dominate the non-defense part of the federal budget.
Then he wanted to use those cuts to balance the budget, and leave behind a constitutional amendment forcing Washington to balance each year’s spending and taxation.
He failed, utterly. And he will leave behind a messy, stagnating economy if a report by the Congressional Budget Office is right, hampered and hamstrung by the very policies Ryan championed. And his focus on tax cuts over all goals means the poor sap who gets his job won’t be able to fix it, especially if Republicans hold control of the House in the fall election.
Headlines about the CBO report, released Monday, dwelled on the idea that the federal deficit will again top $1 trillion by 2020. That’s bad enough, not least since the economy has been doing reasonably well before Congress and President Donald Trump administered the twin stimuli of a very large tax cut for corporations and the rich, followed weeks later by a $1.3 trillion spending bill that boosted federal spending, mostly to expand a defense budget that was already bigger than those of the next half-dozen nations with big military establishments put together.
You’re not supposed to throw money at a full-employment economy like this one — it raises the threat of inflation, and leaves the government unable to respond much to a recession down the road.
Even Trump is smart enough to realize the spending bill was a mistake, goofball that he is.
But the real news was further down in the report — where CBO projected that the tax cuts and spending increases will only boost economic growth for about a year, after which things will stagnate.
Even as pure budgeting, though, Ryan’s vision went fatally off the tracks when the tax and spending bills passed in December and January. To understand why, you have to know a little (but just a little) about how the federal budget works.
Let’s put that $1 trillion deficit in perspective, especially since — unlike the trillion-dollar deficits in fiscal 2009 through 2013 — it’s happening when the economy is at full employment, rather than fighting off the worst recession since the 1930s.
Social Security costs about $900 billion annually to serve 54 million people, plus another $200 billion for 10 million disabled people and the 8 million who get help under the Supplemental Security Income program because they are blind, old, intellectually disabled and so on.
Medicare costs $593 billion for fiscal 2018, according to the Center for Medicare and Medicaid Services. Medicaid, even after its expansion under President Barack Obama, spends just over $400 billion. “Other health insurance programs” are projected at just over $7 billion.
Domestic discretionary spending — basically anything not mandated by law, less spending on, as I did the numbers, defense, homeland security and the Department of Veterans Affairs, which mostly runs hospitals for ex-warriors — is $381 billion.
So here’s Ryan’s legacy. To support his tax cuts and the rest, you don’t have to trim domestic spending. You have to eliminate it — all of it. And then, you have to take your pick of eliminating essentially all of Social Security, or all of Medicare and most of Medicaid (or vice versa). Or you can whack all of the disability and SSI program, all of Medicaid, and all of domestic discretionary.
And you still wouldn’t balance the budget.
So good luck. Hope you enjoy paying your Mom’s hospital bills out of pocket, right after helping your father-in-law with mortgage payments. Say toodles to low-rate student loans you use to supplement your kids’ college fund, and the monthly unemployment reports and other economic data that guide your investing.
If you have an autistic child or two who will never meaningfully work, hope you have a trust fund that will replace their SSI when you’re gone. And enjoy watching poor kids on TV die from lack of insurance, because it would happen — would have to happen — for anything like the nonsense vision Ryan has sold to come true.
The best part is that all this would not even deliver the growth Ryan has promised for years, like the shoe salesman he richly deserves to be.
According to CBO, even with just the cake-and-candy policies Ryan and Trump have passed already will produce relative stagnation by 2020, with monthly job gains slowing to just 62,000 on average, though unemployment will still be low. Growth will revert back to about 1.5% to 1.7% a year, CBO says.
So there will be no payoff to the middle class, in the form of new jobs, for all the succor thrown at the richest. It only gets worse if there’s a recession, as there eventually will be. And it would get much worse if you really whacked the whole non-defense, non-entitlement parts of the federal government, plus most of Social Security, and then headed into a recession.
That’s the massive fraud Paul Ryan always was, even before Trump. Fixing the budget damage he’s done is impossible if Republicans stay in control of Congress and cling to last year’s tax cut. Even if voters turn them out in November, it will be darn hard.
via MarketWatch https://on.mktw.net/2w6i9Ah
April 11, 2018 at 09:27AM