The Ryan Road to Prosperity

The Paul Ryan Road to Prosperity is less of a radical thesis and more of the new consensus. The 2010 election showed that Americans were not ready for the Obama neo-socialist agenda and since then, several events have shown a new consensus has been formed or maybe we should say, forming.

When the Republicans forced Obama to extend Bush’s tax rates through 2012, Obama had to admit that his own plan was not working as advertised. While Republicans were forcing Democrats to continue the lower rates of the Bush’s era to keep the economy's recovery going, Obama’s own budget deficit commission report threw its own shock.

The report essentially supported a bipartisan version of Reaganomics by emphasizing lower marginal tax rates as part of reformed tax codes reducing deductions for both businesses and individuals, reducing government spending in real terms and as part of the overall GNP and finally, entitlement reforms. Obama ignored the recommendations of his own commission, but it was understood among Democrats outside of Washington, and some inside, that times change.

Within the Senate, Tom Coburn has been leading a bi-partisan group to get the budget commission recommendation passed and now Ryan has produced his own version of the commission report as it is similar to the commission report in that it promotes flatter tax rates with less deduction, entitlement reforms and reduces overall spending in real terms and as percentage of our overall economy.

The major difference between the commission and Ryan plan is two fold. The commission leaves federal spending at 21% of the GNP whereas the Ryan plans takes it even lower. Also, the Ryan tax plan considers revenue neutral when collecting revenues, whereas the Commission uses tax reforms to raise additional funds which is why many conservatives oppose the plan. Yet, there is a consensus outside of the hard left parlor that rejects class warfare and working on developing a more entrepreneurial America.

As for the left, they are about to unveil the “People’s budget” which includes massive tax increases on the wealthy, increased spending including yet another stimulus package (since the first one worked so well), add a Obamacare package on steroids including a public option and trillion of dollars of new debt as if we don’t have enough. (Okay, on the latter point, the progressive lobby ensures us that after spending all of this money; we will still balance the budget and grow the economy. They also add that the Easter bunny will bring children candy and the tooth fairy will leave freshly minted twenty dollars bills for missing teeth under children’s pillows. Of course, all money left for missing teeth better be reported as taxable income.)

What Ryan has done is introduced a budget for the future. In the 1990’s, Welfare reform was based on two premises. The first premise is that the Democrats accept the limitation of government spending and what government can do for the poor. The second premise, the Republicans accepted a safety net for the less fortunate, provided it was limited.

Ryan's budget does the exact same thing. Ryan is not ending Medicare or Medicaid but reforming it to save it. Ryan allows a government safety net for the less fortunate while building a more patient center health care overall. As Senator Coburn observed, Government bankruptcy will end our social net as certain as anything else.

Ryan has begun the debate that is as much cultural, since it is growth oriented budget that emphasizes economic growth and budgetary discipline plus changes the way we think about entitlement. It is the line in the sand for Republicans and conservatives to rally around, a budget that begins with the premise that it is the American people who are the master of their fate and not mere servants of their government.


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