Paul Ryan’s Budget is Good for America

WASHINGTON, DC - March 24: Rep. Paul D. Ryan, ranking Republican on the House Budget Committee, criticizes the amount of spending and debt in President Obama's budget proposal.

When considering Representative Paul Ryan’s (R–WI) budget plan, it goes without saying that if one disagrees with Ryan’s vision, then of course he or she won’t like his plan, regardless of whether it fixes our budget problems.

It is important, then, to consider his vision: Is smaller government a worthy goal?

In the words of Dennis Prager, “the bigger the government, the smaller the individual.” Government depends on its citizens for revenue in order to provide services. The more government grows, the more revenue it must generate and the less workers are paid. But not only that, the more government grows and provides, the less individuals are needed to provide. Consequently, as government grows, not only is there less personal freedom and fewer resources available, but people become less needed as they depend on the state.

As one example, men are increasingly less needed to provide for families when there are ever-larger welfare programs provided by the state to take care of women and children. Would anyone argue that the incentive to rely on a man is unaffected when program after program is produced by government to provide instead?

And, if there’s any doubt about government providing too many programs, consider these findings from a recent Government Accountability Office report. The federal government currently operates:

  • 80 economic development programs across four agencies,
  • 100 separate programs run by five Department of Transportation agencies,
  • 56 programs run by 20 different agencies dedicated to provide financial literacy,
  • 18 domestic food assistance programs,
  • 20 programs for the homeless, and
  • 47 programs for job training and employment.

And the list goes on.

Certainly a social safety net is desirable, but with so many duplicative programs providing welfare in all areas of life, if not now, at what point are these programs encouraging the very dependency they’re designed to combat?

That’s why the bigger the government becomes, the smaller the citizen becomes.

However, the left generally supports big government, though few will say so. Indeed, even now, few on the left think that government is too big, just as few are able to identify a program that should be eliminated.

Consequently, instead of defending big government, the left has mainly attacked Ryan’s plan on grounds of social justice and efficacy, framing the debate in terms of those who care about others (liberals) and those who don’t (conservatives). Hence common accusations amount to calling the Ryan plan a ludicrous, cowardly, cruel joke.

First, in response to the fact that Ryan’s plan cuts $5.8 trillion from our current spending projections, the left claims that these cuts won’t affect the wealthy. “But for working families, whose living standards have stagnated in recent decades, Ryan’s plan seems designed to make it harder for them to help their children have a better life.”

But the truth is just the opposite. Ryan’s plan is designed precisely to make it easier for our children and future generations. As our current deficits and debt stand, we are strapping our kids and grandkids with a worse standard of living and a bleaker future, as they’ll be stuck with the tab we’re amassing. While we go on spending binges, they’ll be crushed with confiscatory tax rates—after all, as of right now, every man, woman, and child is $200,000 in the hole to the U.S. government (when including unfunded liabilities).

Ryan’s plan, however, tries to reverse that, cutting over half a trillion dollars per year from federal spending. Cutting at this pace would put us on a path to balance the budget.

So, the question really is: Do we have a responsibility to repay what we’ve spent, or do we continue spending now and stick our children with the bill?

Second, and most significant, regarding Ryan’s reform ideas for Medicare and Medicaid, the left claims that “the plan would deprive many and probably most seniors of adequate health care.”

This is false. Under Ryan’s plan, to deal with Medicare, starting in 2022, people would be given vouchers worth what Medicare will then cost, allowing people to shop for their own insurance plan (approved by the government, of course). In future years, government assistance will be linked to the rise in prices of consumer goods and services—the consumer price index (CPI). Nowhere would benefits be slashed. Nowhere would Medicare spending even be cut. Rather, come 2022, tying government assistance to the CPI will slow the rate of increase in Medicare spending by government.

As for Medicaid, Ryan would turn the program over to the states, allowing them to dictate how the program would run most effectively. Like Ryan’s reform for Medicare, no Medicaid spending would be cut.

The left’s accusation, then, is based on the assumption that more consumer choice won’t work in the health care market to bring down costs. (Government currently spends approximately 50 cents out of every dollar spent on health care.) Yet in every market where consumer choice exists, it creates more competition, and ultimately prices come down. Donald Berwick, the administrator of the Centers for Medicare and Medicaid Services, points this out: “Improving quality while reducing costs is a strategy that’s had major success in other fields. Computers, cars, TVs and telephones today do more than they ever have, and the cost of these products has consistently dropped.”

In fact, Cato economist Dan Mitchell adds:

Defenders of the status quo argue that the market for healthcare somehow is different than the market for things such as computers. But here’s a chart showing that relative prices are falling in one of the few areas of the healthcare system where consumers spend their own money.

And I’ve previously noted that the same thing applies with abortion, where prices have been remarkably stable for decades. Regardless of one’s views on the procedure, it does show that costs don’t rise when people spend their own money.

So it’s appropriate to ask skeptics: Given that, in the few areas of health care where prices haven’t risen even though markets exist, why wouldn’t market forces bring prices down in the rest of the health care system?

Even if one disagrees with everything in it, Ryan’s plan is serious for the simple reason that it is a plan. So far, it’s the only one our federal officials from either party have presented. It’s fair to criticize it, but whoever does so should explain why we’re better off with bigger government and why bringing more market forces to health care would fail to bring down costs.

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