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Posted at 11:08 AM ET, 03/ 4/2011

Is Paul Ryan really a 'fraud'?

By Jennifer Rubin

Matt Miller has been going after the only man in Washington working on a proposal to reform entitlement programs. Miller laced into Rep. Paul Ryan (R-Wis.), with the sort of invective liberals usually reserve for Republican presidents:

Thanks to House budget chief Paul Ryan, it's possible to measure the size of this fraud. And it's colossal. As can never be said often enough, Ryan is absurdly hailed as a fiscal "conservative" for a "roadmap" that doesn't balance the budget until the 2060s and that adds an unthinkable $62 trillion to the national debt between now and then. How can this be the case when Ryan puts forward trims for Social Security and Medicare so "bold" that most Republicans wouldn't dream of supporting them? Because Ryan also pretends we can keep federal taxes at their recent historic levels of 19 percent of gross domestic product as the boomers age.

Ryan isn't "pretending," of course. He really thinks raising taxes will retard economic growth that is essential to bring unemployment down and dig out of the trillions in debt added by this president. But more to the point, Miller is simply wrong.

Let's take his point on taxes for starters. Historical tables examining taxes as a percentage of GDP tell us that 19 percent is hardly unprecedented. Moreover, raising tax rates doesn't make any difference. W. Kurt Hauser, chairman emeritus of the Hoover Institution at Stanford University, wrote in the Wall Street Journal:

Over the past six decades, tax revenues as a percentage of GDP have averaged just under 19% regardless of the top marginal personal income tax rate. The top marginal rate has been as high as 92% (1952-53) and as low as 28% (1988-90). This observation was first reported in an op-ed I wrote for this newspaper in March 1993. A wit later dubbed this "Hauser's Law."

Over this period there have been more than 30 major changes in the tax code including personal income tax rates, corporate tax rates, capital gains taxes, dividend taxes, investment tax credits, depreciation schedules, Social Security taxes, and the number of tax brackets among others. Yet during this period, federal government tax collections as a share of GDP have moved within a narrow band of just under 19% of GDP.

So Ryan, far from "pretending" that taxes will remain about 19 percent of GDP, is recognizing reality. It's not clear why Miller thinks 19 percent is some fantasy figure cooked up in Ryan's office.

Then there is Ryan's plan. Ryan spokesman Conor Sweeney responded to my inquiry via e-mail:

With all due respect, the crux of his claim is false. The tidal wave of debt before us is the result of politicians making empty promises, accelerating the explosive growth of government spending. Ryan's reforms seek to put an end to years of empty promises from a broke government, offering instead real security with real reforms. Ryan's legislative reform proposal not only puts the Federal budget on a path to balance and our economy on a path to prosperity, but would in fact PAY OFF the debt.

He points to the favorite refuge of cheerleaders for ObamaCare, the Congressional Budget Office.

The CBO tells us that if we do nothing to alter our current trajectory, "debt held by the public" will exceed 700 percent of GDP in 2080. By contrast, in 2080, the CBO estimates that Ryan's proposal will eliminate the debt. Sweeney reiterated that Ryan's plan "does not merely pay down the debt -- Ryan's plan pays off the debt."

Could Ryan seek to reform current benefits to accelerate the pace of debt reduction? Sure, but as it is he's run into a firestorm of opposition by Democrats. Aside from the politics, Ryan has shielded those 55 years and older for policy reasons. Sweeney explained that "while there is an urgency to act, the reforms themselves can -- and should -- be gradual, modest and sensible. The key for credit markets is confidence that we're getting the trajectory right. The key for economic growth today is certainty that tomorrow's investment climate won't be overwhelmed by debt and taxes."

Could Ryan decide to hike taxes dramatically? Sure, that would be an option, although not even President Obama could hike taxes enough to wipe out the trillions in debt. And history shows we wouldn't get more revenue as a percentage of GDP anyway.

But none of this constitutes a "fraud." To the contrary, Ryan -- unlike congressional Democrats and the president -- is trying in earnest to address our fiscal mess. Based on my recent conversations with Ryan, I know he's not expecting liberals to applaud. But they can at least be accurate and fair in their critiques.

By Jennifer Rubin  | March 4, 2011; 11:08 AM ET
Categories:  Budget  
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Comments

We were on a glidepath to paying off the debt in 2000. Then we were told that the Bush taxcuts were affordable, and would lead to economic growth. Neither happened, and now Ryan is selling the same old snake oil. That is why he is widely considered to be a fraud, except of course amongst those who like to pretend the foregoing history never happened.

Posted by: oldabandonedbeachhouse | March 4, 2011 11:50 AM | Report abuse

It's always soooo convenient forgetting or not factoring in 9/11, etc. as to part of the problem. Of course raising the minimum wage and higher energy prices have absolutely no effect on recovery, or raising health care premiums to cover approx. 10% of the population - Obamacare could have been done 4 a lot less -- plus the myriad of taxes & fees raised because the beast may be a little hungry.

In the future.

I'm delighted you returned yours to the government. Every year since the Bush tax cuts went into effect.

Posted by: gopthestupidparty | March 4, 2011 12:05 PM | Report abuse

Also, do we have to continually put up with the liberal simplicity of taxes as a share of GDP are low, ergo, higher taxes are part of the solution.
(1) Completely ignores the distributional aspect of the tax system as the % of taxpayers not paying income taxes has doubled
http://www.cbsnews.com/stories/2009/04/15/politics/otherpeoplesmoney/main4945874.shtml
The whole looks like the burden is low, but that ignores that half of the whole pays nothing or gets money.

(2) People avoid economic activity to circumvent high rates, if marginal rates are above 60 and 70%, people may pay the lower rate of 30%, but economic activity that would have occurred simply isn't occurring. Would anyone suggest , other than liberal ponces like Matt Miller, that a two tiered tax rate system of 20% and 85%, has low taxes, if taxes as a share of output were 25%?

Posted by: cdosquared5 | March 4, 2011 12:38 PM | Report abuse

Are all conservatives dishonest? Rubin writes, "By contrast, in 2080, the CBO estimates that Ryan's proposal will eliminate the debt."

But, what happened in CBO's analysis? They didn't include Ryan's own Tax Proposals on instructions of his staff. How big is the debt in 2080 if Ryan's own tax proposals are enacted? He wouldn't allow CBO to make those estimates. Therefore both Ryan and Rubin are conservatives and, by definition, dishonest.

Posted by: steveh46 | March 4, 2011 12:40 PM | Report abuse

It's hard for a lefty to acknowledge that above a certain level, tax rates don't generate more revenue. That at a certain point, the productive will shift their focus from generating wealth to reducing tax liability.

Posted by: gord11 | March 4, 2011 12:49 PM | Report abuse

Yeah,he's a fraud and I can prove it. Jennifer has a good friend named John Steele Gordon who writes economic opinions for Contentions/Commentary. I'm going to quote from his piece today.
"Enron Would Blush’John Steele Gordon 03.04.2011 - 9:25 AM
"I have been arguing for quite some time (at least since I first wrote Hamilton’s Blessing, a short history of the national debt, in 1997 — when the debt was only a third of what it is today) that as long as governments can keep their books as they please, there will be no solution to the problem of chronic government budget deficits. Accounting causes near instant MEGO (My Eyes Glaze Over) in most people — and in the entire political press corps — so unless governments are constrained by law, politicians know that they can get away, in the short term, with budget gimmicks to hide deficits. And of course, in the long term, it will be someone else’s problem. Budget gimmicks are easy, saying no to political allies is difficult, so budget gimmicks it will be until fiscal disaster looms"
http://www.commentarymagazine.com/2011/03/04/bill-gates-on-government-budget-gimmicks-enron-would-blush/
(1)Have you ever heard Ryan or any other "Adult" fiscal conservative discuss any kind of government accounting reform?
(2)Neither Ryan nor any of his colleagues have anything to say about monetary policy,and without Monetary policy reform,fiscal reform is a circle jerk.
JFYR:I refer to Ron Paul's cross examination of Bernanke:
http://www.nysun.com/editorials/the-eclipse-of-ben-bernanke/87250/

Posted by: rcaruth | March 4, 2011 1:01 PM | Report abuse

(2)Neither Ryan nor any of his colleagues have anything to say about monetary policy,and without Monetary policy reform,fiscal reform is a circle jerk.


Since I haven't read the pertinent portion of The Constitution lately, which branch is responsible for monetary policy?

I know they go in front of Congress, but is that office the Executive Branch's responsibility & Congress the overview?

If it is the Executive Branch's responsiblity, shouldn't they lead -hehehehe - lead not vote PRESENT - on reforming monetary policy? Or LEAD/bully and start pushing Congress? Like Geitner did in Feb w/total corp tax reform and revisiting Sub-S's and LLCs?

Ohhh, lead, I sense a pattern........

Posted by: gopthestupidparty | March 4, 2011 1:18 PM | Report abuse

Ohhh, lead, I sense a pattern........

Nixon was a leader,and he,in unitary executive fashion,lead us off the Gold Standard in 1971. Leadership can be priceless.
Currently,only two individuals in our government believe we need a review of monetary policy,Rand and Rand. To put this another way,EVERYONE in our government except the Rands,are opposed to even having a serious discussion about monetary policy.
AND, Is Ryan in favor of reforming Government Accounting Policies? To my knowledge,this economic charlatan,has never brought it up.

http://www.google.com/search?hl=en&source=hp&biw=1020&bih=534&q=gold+standard+nixon+1971&aq=f&aqi=g1&aql=&oq=

Posted by: rcaruth | March 4, 2011 1:30 PM | Report abuse

Stupid Party,
Here's your homework assignment:
http://www.google.com/search?hl=en&source=hp&biw=1020&bih=534&q=gold+standard+nixon+1971&aq

Posted by: rcaruth | March 4, 2011 1:32 PM | Report abuse

Didn't answer my question. Which branch is responsible?

Posted by: gopthestupidparty | March 4, 2011 1:33 PM | Report abuse

Didn't answer my question. Which branch is responsible?

Posted by: gopthestupidparty

No Branch,it's the FED, Jesus Christ

Posted by: rcaruth | March 4, 2011 1:35 PM | Report abuse

Nixon gave us the EPA -

Don't care about the gold standard.

But does it suggest that the President had the power to do that, that the Executive Branch would start the discussion?

I really don't understand what you're trying to say?

Do you want the President to lead or don't U?

He led on Obamacare, do you want that or not?

Posted by: gopthestupidparty | March 4, 2011 1:36 PM | Report abuse

Don't care about the gold standard./I know

But does it suggest that the President had the power to do that, that the Executive Branch would start the discussion? /He had the power if he did it and it stuck/DUH

I really don't understand what you're trying to say? /I know

Posted by: rcaruth | March 4, 2011 1:40 PM | Report abuse

LOLOL

Posted by: gopthestupidparty | March 4, 2011 1:51 PM | Report abuse

To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures

Congress....Maybe U should write him

1)Have you ever heard Ryan or any other "Adult" fiscal conservative discuss any kind of government accounting reform?


Overall accounting reform no, but Bush did put mgmt practices in place for all the departments, Ag found over a Billion in errors alone. I even remember it being explained on TV. With a chart.

Posted by: gopthestupidparty | March 4, 2011 1:57 PM | Report abuse

But they can at least be accurate and fair in their critiques.
=================================
After reading her articles that's the funniest thing I have ever heard!Just this should get her fired:"Ryan isn't "pretending," of course. He really thinks raising taxes will retard economic growth that is essential to bring unemployment down and dig out of the trillions in debt added by this president. But more to the point, Miller is simply wrong."

How the hell does she know whats in Ryans head,he is putting it off for 50 years and she has the balls to say Obama's Debt?She skips the $12 TRILLION ADDED BY THE REPUBLICAN FRAUDS THAT SHE AND OTHERS CALLED CONSERVATIVE ,GOVERNMENT COST CUTTERS?Well Jenny , REAGAN TRIPLED THE NATIONAL DEBT WHILE STILL RAISING TAXES 6 of 8 and GW DOUBLED IT ,BOTH GREW GOVERNMENT MASSIVELY WHILE THEIR DEREGULATION ALLOWED WALL STREETS CORPORATE PROFITEERS TO RUN HOUSING,INSURANCE AND DERIVATIVES SCAMS THAT FINALLY BANKRUPTED OUR COUNTRY!REPUBLICANS WANT TO BLAME AND SQUEEZE WORKERS, THE POOR,SICK AND OLD WHILE GIVING MORE TO THE RICH WALL STREET CORPORATE PROFITEERS WHOSE MALFEASANCE NEARLY DESTROYED THE WORLD! HORRID INDIVIDUALS ALL!

Posted by: sjo123452000 | March 4, 2011 2:20 PM | Report abuse

Ag found over a Billion in errors alone. I even remember it being explained on TV. With a chart.
Posted by: gopthestupidparty
A Billion is a good start. A Billion a year,In 1500 years,we will take care of the 2011 deficit. You and Jennifer,please read Monetary/Fiscal policy for Dummies. Here's your bonus question:how is Ryan going to prevent Bernanke from monetizing the debt,when,it is to Ryan's political advantage for that to occur?

Posted by: rcaruth | March 4, 2011 2:25 PM | Report abuse

Here is more from Ms.Jenny Fair and Accurate?
"Her political views are widely characterized as conservative and neoconservative.She was also called the supporter of Tea Party movement, She opposed Barack Obama on multiple occasions, calling him “the most anti-Israel U.S. president (ever),”and writing that “Obama isn’t moderate, doesn’t like the free market, and isn’t interested in waging a robust war on Islamic fundamentalists.”

When you Google unfair,inaccurate,lying shills this "persons" name should be the first ten results on the page!!!

Posted by: sjo123452000 | March 4, 2011 2:38 PM | Report abuse

Wow the commentary here is scintillating: Moonbats (liberals) against Loonbats (RonPaulistas). Much sound and fury, signifying squat.

Ryan is absolutely correct and aboveboard and smart. There will be further "Roadmaps" from smart conservatives that will solve the myriad problems liberals have created.

Posted by: jafco | March 4, 2011 5:08 PM | Report abuse

Per the Washington Post's Ezra Kline who actually analyzes the phony claims put out mostly by Republicans and by some Democrats:

As you all know by now, the long-term budget deficit is largely driven by health-care costs. To move us to surpluses, Ryan's budget proposes reforms that are nothing short of violent. Medicare is privatized. Seniors get a voucher to buy private insurance, and the voucher's growth is far slower than the expected growth of health-care costs. Medicaid is also privatized. The employer tax exclusion is fully eliminated, replaced by a tax credit that grows more slowly than medical costs. And beyond health care, Social Security gets guaranteed, private accounts that CBO says will actually cost more than the present arrangement, further underscoring how ancillary the program is to our budget problem.
http://voices.washingtonpost.com/ezra-klein/2010/02/rep_paul_ryans_daring_budget_p.html

Representative Paul is a Fraud. End of discussion.

Posted by: Lazarus40 | March 4, 2011 7:36 PM | Report abuse

Strong economic growth can make budget deficits in the range of 2 or 3% of GDP sustainable. That was our pattern throughout the post-WWII era up until the current recession. Deficits in the range of 10% of GDP, such as this year and last, will be sustainable for only a few years. Then our debt will become so high that we can't service it without drastically curbing other spending. People who care about that other spending should realize that it will be inexorably crowded out by interest payments. Also, the bond markets will soon quit lending to us at cheap interest rates no matter how much money Bernanke prints. We'll become very vulnerable to a Greek-style financial crisis, but with no bigger economy to bail us out.

Post-WWII economic history shows that the federal government can take 19% of GDP out of the economy without overburdening the productive sector. In fact, that's about as much as the federal government was able to extract regardless of how high tax rates were. With pro-growth economic policies and a streamlined, more efficient tax system -- broader base, lower rates -- 20% is probably possible. So instead of spending 25% of GDP, the federal government needs to spend about 22%.

Reducing federal spending back to 22% of GDP will be difficult due to the exploding costs of entitlement programs as the Boomers retire. Immediate reform of entitlements is therefore essential to restoring fiscal health and cannot wait until after the presidential election. Obama needs to be a responsible steward of the nation he leads instead of just another politician.

Posted by: eoniii | March 4, 2011 8:49 PM | Report abuse

"When you Google unfair,inaccurate,lying shills this "persons" name should be the first ten results on the page!!! "


Depending on what definition of "should" you're using, which would be a non-trivial exercise in natural language processing far beyond the IBM Watson's current capabilities, wouldn't that simply prove that the arguments on the left side of the blogosphere primarily consist of mr. monotony, one-note-johnie talking points, ad hominem attacks and infuriated name-calling? Especially since all HuffPo posts are required to have those front-loaded tags to game the Google algorithms??

Posted by: aardunza | March 6, 2011 1:48 AM | Report abuse

...broader base, lower rates -- 20% is probably possible. So instead of spending 25% of GDP, the federal government needs to spend about 22%....

"Needs?"

Wants - doesn't "need."


Posted by: gopthestupidparty | March 6, 2011 2:32 PM | Report abuse

Yes, Paul Ryan is a fraud like most "conservative" Republicans that only care about deficit spending and the growth of Government when a Democrat is in the White House. History sure always repeates itself, look at Reagan and how he criticized spending, the role, and deficit of Government. Promises prior to being elected, 180 degree turn once in office, then go back to the "principles" when the other party is in charge.

Paul Ryan is a hypocrite!
http://www.wtffinance.com/2011/02/paul-ryan-another-%e2%80%9cconservative%e2%80%9d-hypocrite/

Posted by: WTF_Finance_com | March 6, 2011 2:44 PM | Report abuse

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