Dana Milbank doesn’t like Paul Ryan’s budget proposal that was released this week. Why? Well, Ryan cuts spending on the poor in order to pay for tax cuts for the rich. Milbank writes:
Paul Ryan, outlining his latest budget proposal in the House TV studio Tuesday morning, said the policies of the Republican presidential nominees “perfectly jibe” with his plan, which slashes the safety net to pay for tax cuts mostly for wealthy Americans.
In case we don’t get his point, he later repeats it:
Taken together, Ryan would cut spending on such programs by $5.3 trillion, much of which currently goes to the have-nots. He would then give that money to America’s haves: some $4.3 trillion in tax cuts, compared with current policies.
And later again:
To protect poor Americans from being demeaned, Ryan is cutting their anti-poverty programs and using the proceeds to give the wealthiest Americans a six-figure tax cut.
It would appear that Milbank believes in a sort of fiscal Brezhnev Doctrine, in which whatever claim on the percentage of GDP made by the Feds is considered permanent, while the status of unclaimed GDP is considered up for grabs. In Dana’s world, the current level of redistribution is optimal (until next year, when a greater level of redistribution will assume that status).
Quite aside from whether Ryan proposes actual cuts, as opposed to decreases in an arbitrarily projected rate of increase, notice Milbank’s fallacy regarding reducing real wealth transfers to the “poor” in order to increase them to the “rich”—or of robbing poor Peter to pay rich Paul. Instead, it’s a case of robbing Paul less (by reducing his taxes) while paying Peter less (by reducing his claim to coercive wealth transfers).
Which is not to defend the Ryan budget for reduced taxation and redistribution. He and Milbank are just on opposite sides of a typical D.C. debate among welfare-ists, in which the Republican budget increases the national debt by a $4 trillion over the next ten years and the Democratic one increases it by $3.5 trillion, with both budgets relying on rosy scenarios including the assumption that future Congresses will be constrained by the dictates of the present one.
Follow Circle Bastiat
Where did you get the $4 trillion number you attribute to Ryan and/or Republicans? I missed that development.
Click the Milbank article link.
Mr. Westley:
The number you quote is traced back to this, a phone converstation with some unknown individual with obvious animosity towards Ryan:
@Christopher Westley March 23, 2012
Perhaps. But maybe not. I think it is more about tactics and intermediate objectives. Strategy is aimed and ultimate goals, and we may well disagree at that level. My point is simple: a friend of my enemy is a friend indeed.
Where we certainly agree, I think, is that socialism is the enemy, and Mises has the middle road argument properly drawn. I often think about the world when he was writing these things; socialism was on the rise across the world, and advocated openly by many Americans, too. In this regard, his legacy is tied to our times. Hayek too.
It is a good song, and makes a good slogan. But slogans tend to make it more difficult to distinguish one thing from another, not easier.
Rothbard’s little book, “The Betrayal of the American Right” is an interesting historical analysis of what you are pointing out. I don’t have to disagree in order to make my argument. This is not an argument, really, between democrats and republicans. They have both failed America, in my view. But here we are.
I am saying this, to borrow from Hayek: If we are on the road to serfdom, any off-ramp will do, even if it doesn’t lead directly to our eventual, most desired destination.
Yes, and you reached this conclusion by way of this premise:
If you frame the question like this, or use the dog poop/brownie analogy, you assume your conclusion and make that rhetoric work for your argument, but your argument defeats your principles. If you believe X is preferable to Y, and Z looks more like X than Y, what do you choose? This is not an abandonment of X; it is an understanding teleology. That is the nature of history, not the selective recital of supporting facts. It is a long view.
Yes, I have read this, and you have given me the occasion to read it again. You are mistaken if you think by what I’ve written here that I carry a Republican party card. I have recently stopped referring to myself as libertarian, too. I prefer the categorization, if there must be one, classical liberal. Does that change anything?
Here is one of Hayek’s concluding lines from this essay:
Yes, but we must also, and do act. In this regard, inaction is action as much as any other. In a crisis, you make the best choice among those possible. It is rarely a choice between the best and the ideal.
Here is the same sentiment from the words of Dick below:
It’s worth thinking about. Certainly, we are not, in the end, above the fray.
It’s a sad state of affairs when a wishy washy attempt at a budget, that does not balance until 2040 (If reports I’ve heard are true) is considered radically Right Wing.
Is our Republic doomed?
God help us if transfer payments ever get established to puppies and/or kittens. We will never overcome the mass emotional appeal to charity toward the “disenfranchised” by the logical explanation that it is theft. Being right doesn’t matter in a democracy if you look mean on the surface.
How about laws against animal cruelty? Do puppies and kittens have any rights independent of the will of their human owners?
No. Animals have no rights and there shouldn’t be laws against animal cruelty. That doesn’t mean animal cruelty is good and should be tolerated. But there are other ways to fight it. Methods of social pressure like ostracism, boycotts, shunning. In a really free society such methods would be very effective.
Just speaking of myself. If my neighbour is cruel to his dog he’ll never get smiles, “good morning” ‘s, and invitations from me. If his cruelty reaches the level of sadism I’ll steal his dog and kick the bastard’s ass. Knowing perfectly that I’ll be punished. But it is my free choice.
Martin, you should understand that people living in free society would be very brave men and women. Not like the trembling law-abiding sheep we can see around.
Alexandra;
You say how people will be with such certainty;
have you been to the mountain top?
Alexandra, “Animals have no rights” is an assumption you make. You could also assume that Australian Aborigines have no rights, but the Aborigines and others disagree.
In a true anarchy, ostracism, shunning and personal self-defense are the only forces in general. The rights of children vis a vis their parents and other adults, for example, are also enforced by ostracism and shunning. Anarchy doesn’t last for this reason. People aren’t content with ostracism and shunning, so they form states.
Let’s do something really radical and actually look at the Ryan plan on taxes.
Footnote 76 in the Republcan budget, The Path to Prosperity. directs us to a letter Congressman Dave Camp sent to Paul Ryan outlining the principles used to craft the tax plan.
The letter is not long so I encourage you to read it. Below are Camp’s major proposals as listed in the letter.
If you have studied Professor Roger Garrison’s PowerPoints on Keynes versus Hayek you will quickly recognize that the Republicans are using Hayekian principles of capital versus Keynesian principles of consumption versus monetarist principles of monetary manipulation.
Certainly the Ryan/Republican budget is not perfect, but it is such a huge step in the right direction that it deserves our support. Ryan is a supply side economist who worked with Jack Kemp. He has said that this budget is a first step. He is working the politics of the issue. If the supply side changes in Ryan’s budget are as effective as they were in the Reagan Administration Ryan will be back next year and the year after moving us more and more toward a true Austrian capitalist society.
Do not crucify the good on a cross of the perfect.
Dick,
Exactly. Heaven forbid anyone should actually take a look and make a distinction.
Thank you for this.
http://www.youtube.com/watch?v=w3XH3EhOkHM
Dick,
You need to ask yourself why it is that the Republicans always seem to discover Hayek whenever they are out of power. This is the party, after all, that doubled the national debt the last time it controlled the White House and whose likely standard bearer this fall is a Big Government protectionist famous for socializing medical care the last time he held elective office. Meanwhile, those of us who may find the Republicans’ out-of-power rhetoric something less than credible—many of whom know that no Republican president has actually reduced the size of government since Warren Harding—are told to be pacified by efforts like Ryan’s. But why should we? Haven’t we seen efforts like Ryan’s before?
Of course we have. In the 1980s, supply-side policies did promote economic growth, but to what effect? Taxes revenues and debt increased, the Carter-era cabinet departments became permanent, and the warfare state swelled. All of this makes much sense when you consider Parkinson’s Law, which states that expenditures rise to meet income. This explains why government officials embraced supply-side policies at the time. It filled their pockets and allowed their bureaucracies to grow.
That’s the key here. We don’t want a plan that simply promises economic growth. We want a plan that will promote a free society first, and if we do that, economic growth will surely follow. You showed your hand when you invoked Jack Kemp (of all people) to defend the Ryan budget—essentially arguing that we need to dump the current demand-side management regime for a supply-side management regime. But what if we don’t want a regime at all?
You’d say all this talk is harmful because it makes the perfect the enemy of the good. But there is a history of plans like Ryan’s and it’s not that positive. Besides, the perfect is not the enemy of the good. The perfect is the enemy of evil. How much are you willing to tolerate in the hope for an (unlikely) balanced budget in 2020?
Christopher,
Pardon my intrusion but I have to inquire.
If all you say is true, and if Ryan only is discovering Hayek as a way to some other nefarious goal, a political platform based on Hayek is still superior to on derived from Keynes, and though it may not warrant your unqualified support, doesn’t some amount of support make sense, even with your preferences for “none of the above”?
I object to the attitude that there is no path, no compromise, no cooperation short of total, absolute compliance with ones political philosophy, religion, or whatever.
When I choose a restaurant, I don’t insist that I approve of every single item on the menu, only that I can find something there I like.
My question to you is: how much approval do you require before you are willing to sit at the table?
Dear Mr. Wildberry,
I wish we were talking about restaurants, and I wish we could treat states like restaurants (and shut them down when they stop serving the social good). In the market, there is at least a strong incentive to cater to minority interests, even to a minority of one. (If you doubt this, ask me sometime about my daughter’s music collection.) So chances are, if I voluntarily enter a restaurant that I like, we can assume that there is at least one item on the menu that I will like very much, while I can reject the remaining items.
So again, I wish we were talking about restaurants.
BTW, I do not think that Paul Ryan has nefarious intentions. Perhaps he is sincere. But his plan is hardly Hayekian. Indeed, it’s quite Keynesian to the extent that it projects budget deficits for the next several years. (Even so, I noticed that Ron Paul is saying that it doesn’t even balance the budget for 30 years!) What’s more, it maintains the growth of the military socialism of which Hayek was a huge enemy.
Furthermore, as someone who has studied under Roger Garrison and likes him very much, I wonder where is the detail in the Ryan plan about reining in the Fed (which lowers interest rates and creates the malinvestments during the boom). Perhaps that option is on another menu yet to be released to the public?
Here’s the deal. We have seen efforts like Ryan’s before. They have the effect of allowing an overweening state to pacify large numbers of people who would otherwise agitate against it. If they are successful in increasing output and income, they provide opportunities for future state growth. I would prefer a bias for freedom over growth. This would involve cutting the size of government now, and not assuming that a future Congress 10 years from now will do it to make your projections politically appealing.
But I guess wondering these things, to some people at least, makes the perfect the enemy of the good.
Dear Christopher Westley, March 22, 2012
It was just an analogy, and a pretty darn good one I might add.
Markets serve consumers. If a given enterprise has no customers, it goes under. Not all are huge; some can specialize and serve a unique constituency to make a go. If you are talking major franchise, say House of Pancakes, you have to have some general appeal. Billy Bob’s Indian food and Pizza is carving out a unique niche.
Apparently this little restaurant we call USA has some loyal fans. It’s still here. You don’t like some things about it. Me too. But we are competing with a loyal constituency who have widely differing opinions on many things. That is one way to look at this conversation. It is a might big restaurant with lots of things on the menu. We’re just advocating for a healthy choice, hold the pork fat.
I am merely pointing to the fact that we have some things in common, like say, we all eat. We may have diverse preferences, but we do have that in common. In general, we might agree that having a full belly is better than an empty one. That says little about our preferences for pancakes over carrot juice, for example.
If one’s vision is of a small government (or none at all, if I may anticipate yours), it seems a good start to support smaller government. If we want to eliminate taxes, and thereby the means to wage unpopular and costly wars, it seems like a good start is lower taxes, not raise them more. Can we agree on that, or do we have to reach agreement on every problem you can think of before you’ll play along with something we can agree upon? How pure of heart must I be before you will join against a common enemy? Perhaps after that particular monster is slain, we can carry on our separate ways. But joining for a common cause, even if only temporarily, seems an important human custom.
Yes. But it does strive to reach a point of paying off the debt. Do you fundamentally disagree with that goal? Are you saying your ends are better served by driving the debt deliberately beyond recovery? That sounds a little bit like Iran’s nuclear policy.
Again, you want more? I understand. I even support the idea. But you and I commiserating about how small a single little step is, neglects the fact that any step in the right direction is the beginning of a journey to somewhere we want to go.
We are competing with monstrous inertia that has build for many, many years. Even a small ship cannot change direction without room and time. Bigger projects take longer. Is this a consideration worth examining?
Yea, yea yea. I get all that. But this is not a declaration of complete reversal of all that ails us, it is a federal budget proposal that has drawn a distinction that is worth noticing. That’s all. Of course you have objections and complaints about the many omissions, but it does have some kind of chance to put this behemoth on a different course. Or maybe not. But to expect such inertia to instantly change direction on all issues of importance is a bit unrealistic. Does picking your battle have any meaning for you? How about timing, incrementalism, teleology, etc. etc.? Anything there?
Look, here’s the real deal. Maybe you are right (you are), but this is what we have right now. Somebody is going to be elected President, and Congresspersons and Senators and Governors in 2012. This is the only time I’m going to be alive. You? Should we leave it to our kids, because we didn’t find this time good enough to call us up?
I’m not saying this is the second coming. I’m saying that Ryan’s plan is better than Obama’s plan, and could be a step in the right direction. It seems self-defeating to take the position that it might be better, but not better enough, so let’s go with something that is clearly worse. Does that logic work for you?
You have some valid points. Some of which I may actually agree with, but I suspect we have some major differences, too. I can live with that. As such, we can continue to wonder about what is good and what is perfect.
But we shouldn’t sit on the sidelines waiting for the one, perfect savior. That seems like a ticket to annihilation to me.
I’m not saving myself for 40 virgins or perfect harmony, or anything else. I’m just saying, making a little sense is better than making no sense. I’m willing to get behind that to the extent I can. You?
In these discussions, it’s good to remember that we are mostly on the same sides of these issues. Our disagreements lie mostly in strategy.
You argue that Ryan’s incremental approach is better than the alternative, Obama plan. I would respond by asking where is the evidence in history that Republicans believe in deficit reduction. You have to go back pretty far, to the 1920s, and even then that president is considered an anomaly. More than anything, my post is an attempt to point out that this latest effort is the same old song. We know how it has played out in the past. Harvard economist Jeffrey Frankel has actually researched the records and find that government grows at a faster rate when Republicans control the White House, notwithstanding their rhetoric. He summarized his research here.
This is why, when I read about plans like Ryan’s, I think of that old Who song: Don’t Get Fooled Again.
Also, I once wrote about libertarian compromise and why this is never acceptable when it involves compromising the principles of the free society. Look where all of the compromises of the past have gotten us today. Here’s my conclusion:
I suppose a key difference between libertarians and conservatives is the willingness to compromise on these issues. This is why it’s all the more ironic when conservatives invoke Hayek when they engage these policy debates, since one of Hayek’s more famous essays is entitled Why “I Am Not a Conservative.”
Christopher,
I do not disagree with most of what you say, but politics is the art of the possible. Ron Paul figured this out and he is now a Republican who is revolutionizing the party.
Supply side is much more than the gross caricature expressed in the MSM. Brian Domitrovic is the best supply side historian alive today. His March 20, 2012 article in Forbes gives a good quick analysis of the supply side view of how monetary policy and tax policy are connected. Supply side monetary policy, as held by the real supply siders in the Reagan revolution, is much closer to your views than perhaps you realized. All expressed the importance of returning to a gold standard. After all it was Reagan who created the gold committee that included Ron Paul and Lou Lehrman and paved the way for “The Case for Gold.”
Most Republican administrations since Calvin Coolidge have been dominated by Keynesians. The least Keynesian was the Reagan administration, but it was significantly controlled by demand side monetarism with most real supply side economists finally leaving in frustration. Paul Ryan is far from Keynesian or monetarist. When your choice in the restaurant is chicken or fish but you want steak. choosing starvation is not a rational choice.
I understand Ron Paul’s frustration that Ryan’s plan is projected not to balance the budget for 30 years but we must understand that this is based on static analysis by government economists. Never forget that during the Clinton administration the budget was projected to be unbalance “as far as the eye could see” yet because of relatively small changes by the Republican congress revenue exceeded spending before the end of Clinton’s 8 years. Ryan knows that supply side free market policies will increase the revenue significantly more than the static analysis shows, but he also knows that debating this would side-track the real issue of reestablishing free market policies, so he simply accepts their projections.
You bring up a lot of issues that we could discuss sometime over a cup of coffee but for now I will let them rest.
Finally, we have a choice. We can sit on the sidelines and sulk and complain because things are not perfect as we see them or we can enter the fray and help move the party toward our idea of economic perfection. Of the viable options (a la Ron Paul) in party affiliation currently available, only the Republican Party has shown any willingness to allow Hayekian thought inside. If we refuse to go inside we cede control to others and power to Keynesians. Hayek said the worst decision he ever made was to not refute Keynes General Theory. We must not make that same mistake.
Sorry, I made a mistake with the Domitrovic link. It is http://www.forbes.com/sites/briandomitrovic/2012/03/20/christina-romer-fluffs-her-supply-side-economics/
Christopher,
On a continuum with complete evil on one end and complete good on the other then any compromise with evil is wrong because it leads to more evil. Ronald Reagan was criticized for compromis but he looked at it differently. On the same continuum he saw us at a point where we were not complete evil nor were we complete good. From this he saw any compromise that moved the point toward good as proper while any compromise that moved the point toward evil as bad. He recognized that rejecting anything accept total good was futile and guaranteed failure.
$3.5 trillion over 10 years? Check out current tax receipts. At the current monthly increase in debt, we should blow through $3.5 trillion in about 3 years. If Obama is re-elected, we will blow through it even sooner. Higher tax rates and exponentially increasing government regulation and overspending, Obamacare fantasy costs replaced by Obamacare actual cost … new wars to fund. The 4% GDP growth forecast will not materialize.
With the off-balance sheet bailouts of California, Illinois .. we will probably blow through the $3.5 trillion increase mark in 2 years.
Damn you. Now I have to go get a drink.
I don’t often watch “60 Minutes”, but there was a show a couple of weeks back on the problems people are having finding a job after their 99 week unemployment benefits expire. Apparently, most employers do not want to hire them. This is an example of how Federal Nanny Programs, designed to help people, actually hurt them in the long run. Yet both Democrats and Republicans are still voting for these programs. The Austrians seem to be the only group of economists who do not fall for the “taking from the poor to give tax cuts to the rich” canard.
@Chris W:
Please, don’t feed the wiki sysops.