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Posted at 11:15 AM ET, 12/17/2010

Why Paul Ryan excites conservatives

By Jennifer Rubin

On the floor of the House last night, the incoming House budget committee chairman Rep. Paul Ryan (R.-Wisc.) systematically dismantled the arguments against the tax agreement. It's worth watching.

Ryan's arguments were addressed to both the left and the hard right. He reminded those on the left:

I'm hearing some of my colleagues from the other side of the aisle saying "We just can't afford these tax cuts." Only in Washington is not raising taxes on people considered a "tax cut". What we're talking about here is not cutting taxes; we're talking about keeping taxes where they are and preventing tax increases.

Second point: "We - meaning the government - can't afford this?" Whose money is this after all? Is all the money that is made in America Washington's money, government's money? Or is it the people's money who earned it? I hear all this talk about the death tax, the estate tax: "This is going to give a windfall to these people. All this money going to these privileged people who have built these businesses, made all this money." It's their money!

And to conservatives who find a deal cut with a liberal president less than ideal, Ryan reminded them that this is the beginning, not the end:

Let's cut the spending next year when were in charge. There is junk in the tax code, everybody agrees with this. This is advancing some of the junk in the tax code and what I say to my friends on the other side of the aisle next year: let's get rid of the junk in the tax code when are in charge. Right now - let's not hit the American people with a massive tax increase.

If we want to get this debt under control, if we want to get our deficit going down, there are two things we need to be doing: we need to cut spending and we need to grow the economy. We need prosperity in the country. We need job creation. We need people going from collecting unemployment to having a job and paying taxes.

Either innocently or for partisan advantage, the few Republican lawmakers opposed to the bill and the talk show critics railing against another "sell out" created a strawman argument, complaining this wasn't a "growth bill." Of course not, replied Ryan:

It's only a two year extension [of current tax rates]. We're not talking about a pro-growth economic package. We're talking about preventing a destructive economic package from being inflicted on the American people in about two weeks. The last thing you want to do is put more uncertainty in the economy, hit the economy with a huge tax increase, trigger a stock market sell-off and lose jobs. So do we want to make these permanent? You bet we do and that is exactly what we are going to be advancing.

Ryan is among the most articulate spokesmen for the principled conservative lawmakers who are serious about moving the agenda, not just their careers, in the right direction. You can understand why many conservatives are hoping he'll run in 2012.

By Jennifer Rubin  | December 17, 2010; 11:15 AM ET
Categories:  House GOP, Taxes  
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Comments

It astonishes me that there is such a sizable, vocal minority in this country that is so intent upon visiting 'justice' on 'the rich,' that they would like to do economic harm to all of us.

I don't deny that some really rich people are going to have their tax rates extended. But if you hit them with a tax increase, you're also nailing millions of small businesses at the worst possible time. It's madness! Thank God the tax rates are being extended. And, we'll have Hopenchange arguing for a tax increase in 2012. Great!

Posted by: jmpickett | December 17, 2010 11:23 AM | Report abuse

"So it is now, with Representative Ron Paul about to take over as chairman of the Domestic Monetary Policy Subcommittee of the House Financial Services Committee. Mr. Paul campaigned against big banks, arguing that concentrated financial power goes hand in hand with concentrated political power"
http://www.nytimes.com/2010/12/17/business/economy/17norris.html?_r=1&ref=business

This is the Big story of the 2010 election. The arena is monetary policy,which is the key to our economic disarray. I have never heard Ryan discuss Monetary Policy,because changing Monetary Systems is real change,and it makes everyone uncomfortable. IOW,a discussion of our currency is not a "SMART" topic for an ambitious politician.

Posted by: rcaruth | December 17, 2010 11:40 AM | Report abuse

As I wrote the other day, Ryan is easily the most charismatic member of the Republican Party. He is not ready this year, and he has to get the heck out of the House for sure. Other wise, look for him to be the nominee in 2016.

Posted by: 54465446 | December 17, 2010 12:11 PM | Report abuse

"I have never heard Ryan discuss Monetary Policy,because changing Monetary Systems is real change"

Well, that's because (a) the Federal Reserve controls monetary policy, and (b) the Treasury Department controls policy on the US dollar.

The legislative branch's influence on either is more or less limited to confirming Presidential nominees and Humphrey Hawkins.

Posted by: sold2u | December 17, 2010 12:13 PM | Report abuse

Paul Ryan -- the big spender who voted for no child left behind, the prescription drug benefit, and TARP -- now tells us he will take out the $300+ billion of "junk" spending in the Tax Bill next year. How? Over Obama's veto? Ryan and the Republican's gave up all their leverage with Obama by caving in three weeks early.

Posted by: Inagua1 | December 17, 2010 12:41 PM | Report abuse

"Rah! Rah! Sis Boom Bah!!"...Jennifer Rubin

Posted by: danw1 | December 17, 2010 12:53 PM | Report abuse

Well, that's because (a) the Federal Reserve controls monetary policy, and (b) the Treasury Department controls policy on the US dollar.
Posted by: sold2u

I guess first of all why then does Congress bother having a committee on Monetary policy,and why bother putting the anti-Fed Ron Paul in charge of that irrelevant(according to you) committee.
Also,then who does the Fed report to? What if the Fed is the cause of the Economic crisis,will it repair itself?LOL
Next,what if Treasury has a disagreement with the Fed on Monetary/Dollar issues,who trumps who? or is it a perpetual stalemate?

Posted by: rcaruth | December 17, 2010 12:57 PM | Report abuse

Ryan discusses monetary policy frequently and has been explicitly critical of QE2 and other Bernanke misadventures.

Ryan in 2016 presumes and Obama re-election. To be sure, the horrendous devastation he will do in a second term will make an election of another Democrat prohibitive but the possibility of every actually extracting us from this devastation will be very greatly diminished if not completely gone, full implementation of the Ryan road map at that point or no.

Posted by: cavalier4 | December 17, 2010 2:44 PM | Report abuse

I guess first of all why then does Congress bother having a committee on Monetary policy,and why bother putting the anti-Fed Ron Paul in charge of that irrelevant(according to you) committee.


Humphrey-Hawkins testimony comes from the 70s when we introduced the dual mandate for the Fed - Control inflation and maximize unemployment. It was felt that the Fed was maintaining interest rates at too high of a level in order to protect holders of Treasuries and to screw over the working class. So Congress basically mandated that the Fed had to maximize unemployment while managing inflation and the Chairman of the Fed had to come to the Hill and take questions from Congress. If you ever doubted our leaders are financial simpletons, listen to a Humphrey Hawkins session. You will leave convinced our Congressional leadership is filled with morons.

Second, the effect of the policy has been to allow the fed to lower interest rates as low as they dare, and in the process created this series of bubbles we have been experiencing.

The longest running Federal Reserve chairman, William McChesney, once said the role of the Fed was to "take away the punch bowl just as the party is getting going." Greenspan and Bernake have completely abdicated this responsibility. Humphrey Hawkins gave them the cover to do it.

___________________________________________

Also,then who does the Fed report to?

The White House. The Chairman of the Fed can be fired. I believe Carter fired one after just over a year.
__________________________________________

What if the Fed is the cause of the Economic crisis,will it repair itself?LOL


IMHO, the Fed was a huge cause of the economic crisis, starting with Alan Greenspan in the late 90s, when he came to the Street's rescue during the Asian crisis, then the LTCM fiasco, and even rescuing the financial system from Y2K (yes). Of course this inflated a bubble in tech stocks, and when that burst, the Fed cut rates to zero and inflated a residential real estate bubble. And now that the real estate bubble has burst, QEII appears to be creating a bubble in commodities, and another bubble in Chinese assets has been brewing for some time. Plus ca change......
___________________________________________

Next,what if Treasury has a disagreement with the Fed on Monetary/Dollar issues,who trumps who? or is it a perpetual stalemate?


The Fed controls interest rates. Treasury controls the dollar. If asked for commentary regarding either Bernake and Geithner will defer to the other.

Posted by: sold2u | December 17, 2010 3:05 PM | Report abuse

meant to say the dual mandate was to maximize employment (maintain full employment) consistent with controlling inflation.

Posted by: sold2u | December 17, 2010 3:08 PM | Report abuse

Cavalier:

I'm not presuming anything about 2012, only that Ryan won't be president in it. No House member in at least 125 years has gone straight to the presidency. The only ones who have made it, like Ford, Nixon, Bush sr. have been VP's first. Even the most outstanding House members have never achieved that goal.

You can discount that if you want, but that's the way to bet. Also if elected in 2012, Ryan would become the youngest president ever elected in his own right. It's just not going to happen.

Posted by: 54465446 | December 17, 2010 3:22 PM | Report abuse

Also,then who does the Fed report to?
The White House. The Chairman of the Fed can be fired. I believe Carter fired one after just over a year.

Nope,the Presidents appoints the Fed Chairman,but,then,he's autonomous. Carter appointed a new fed chief Volcker,when the previous guy's term was over.
It is hilarious that somebody thinks that there is a separation (in fact) between Monetary policy and currency policy. We have a Fiat/floating currency system,and that's the same damn thing whether your name is Geithner or Bernanke. But if your last name is Paul,you have a very different mentality at work.

Posted by: rcaruth | December 17, 2010 3:39 PM | Report abuse

rcaruth:

We differ on many things, but I admire the consistency of your approach. There is nothing hypocritical about you. Needless to say you would never make it as a politician!

Posted by: 54465446 | December 17, 2010 3:51 PM | Report abuse

rcaruth:
We differ on many things, but I admire the consistency of your approach. There is nothing hypocritical about you. Needless to say you would never make it as a politician!
Posted by: 54465446


I appreciate the kind words,and I want to share something with you that I'm proud of,and you may have an appreciation,(You may be the only one on this unholy Blog who has an appreciation for my comments) Anyway,Martin Wolf is an Economic writer for the Financial Times/London,and he and I had some back and forth email/blog conversations. He said that I had developed a concept that was original and potentially could make a novel contribution to Macroeconomics. Without a lot of detail,here it is,I've studied the role of Complex Derivatives in Macroeconomic Instability since the Bankruptcy of Orange County in the Ninties due to Derivative investments. I postulated that the US currency system/along with the other G-20 currencies that our currency floats with,has become a gigantic complex derivative,and the evolution of the floating Fiat system into a system of Derivatiuves is what has unhinged the world economic system.Anyway,there it is,I'll spare us the details because all our colleagues here want to discuss is taxes,not the underlying condition of our money.

Posted by: rcaruth | December 17, 2010 4:38 PM | Report abuse

rcaruth:

Deriavatives are a HUGE topic, but we have to live in the limitations of this format.

I personally was not surprised this week when the supply showed the biggest weekly drop in oil inventory numbers in 8 years, but oil essentailly stayed flat. That of course is how divorced the price of most commodities is from actual demand these days.

I have been looking into CLO's and private equity lately and the possibility of great turmoil if banking conditions don't allow for lower refinancing of the many loans that were used in buyouts before the crash, which start coming due late next year and through 2014.

Instead, let's just yell liberal and conservative at each other a few times, and say no matter what happens it's all Obama's fault!

Posted by: 54465446 | December 17, 2010 7:11 PM | Report abuse

Didn't he avoid the social security payroll tax cut?

He has already predicted permanent cash deficits in the social security system beginning in 2015 without this drop in income.

Maybe I just haven't run across his explanation as to why this payroll tax cut is really nothing to worry.

But, I'm more inclined to think he's avoiding an important issue and Michele Bachmann is more clued in when she says that the probable future will not be a restoration of the 2% after a year's "holiday", but a raising of the cap and employers being forced to assume the 2% on their "matching" share.

Meanwhile social security funding takes a hit it (and we) can't afford. Not good fiscal policy.

Posted by: TD01 | December 18, 2010 2:16 AM | Report abuse

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