By
DAVID A. STOCKMAN

Published: August 13, 2012 PAUL D. RYAN is the most articulate and intellectually imposing
Republican of the moment, but that doesn’t alter the fact that this
earnest congressman from Wisconsin is preaching the same empty
conservative sermon.
Thirty years of Republican apostasy — a once grand party’s embrace of
the welfare state, the warfare state and the Wall Street-coddling
bailout state — have crippled the engines of capitalism and buried us in
debt. Mr. Ryan’s sonorous campaign rhetoric about shrinking Big
Government and giving tax cuts to “job creators” (read: the top 2
percent) will do nothing to reverse the nation’s economic decline and
arrest its fiscal collapse.
Mr. Ryan professes to be a defense hawk, though the true conservatives
of modern times — Calvin Coolidge, Herbert C. Hoover, Robert A. Taft,
Dwight D. Eisenhower, even Gerald R. Ford — would have had no use for
the neoconconservative imperialism that the G.O.P. cobbled from policy
salons run by Irving Kristol’s
ex-Trotskyites three decades ago. These doctrines now saddle our
bankrupt nation with a roughly $775 billion “defense” budget in a world
where we have no advanced industrial state enemies and have been fired
(appropriately) as the global policeman.
Indeed, adjusted for inflation, today’s national security budget is
nearly double Eisenhower’s when he left office in 1961 (about $400
billion in today’s dollars) — a level Ike deemed sufficient to contain
the very real Soviet nuclear threat in the era just after Sputnik. By
contrast, the Romney-Ryan version of shrinking Big Government is to
increase our already outlandish warfare-state budget and risk even more
spending by saber-rattling at a benighted but irrelevant Iran.
Similarly, there can be no hope of a return to vibrant capitalism unless
there is a sweeping housecleaning at the Federal Reserve and a thorough
renunciation of its interest-rate fixing, bond buying and recurring
bailouts of Wall Street speculators. The Greenspan-Bernanke campaigns to
repress interest rates have crushed savers, mocked thrift and fueled
enormous overconsumption and trade deficits.
The greatest regulatory problem — far more urgent that the environmental
marginalia Mitt Romney has fumed about — is that the giant Wall Street
banks remain dangerous quasi-wards of the state and are inexorably prone
to speculative abuse of taxpayer-insured deposits and the Fed’s cheap
money. Forget about “too big to fail.” These banks are too big to exist —
too big to manage internally and to regulate externally. They need to
be broken up by regulatory decree. Instead, the Romney-Ryan ticket
attacks the pointless Dodd-Frank regulatory overhaul, when what’s needed
is a restoration of Glass-Steagall, the Depression-era legislation that
separated commercial and investment banking.
Mr. Ryan showed his conservative mettle in 2008 when he folded like a
lawn chair on the auto bailout and the Wall Street bailout. But the
greater hypocrisy is his phony “plan” to solve the entitlements mess by
deferring changes to social insurance by at least a decade.
A true agenda to reform the welfare state would require a sweeping,
income-based eligibility test, which would reduce or eliminate social
insurance benefits for millions of affluent retirees. Without it, there
is no math that can avoid giant tax increases or vast new borrowing. Yet
the supposedly courageous Ryan plan would not cut one dime over the
next decade from the $1.3 trillion-per-year cost of Social Security and
Medicare.
Instead, it shreds the measly means-tested safety net for the
vulnerable: the roughly $100 billion per year for food stamps and cash
assistance for needy families and the $300 billion budget for Medicaid,
the health insurance program for the poor and disabled. Shifting more
Medicaid costs to the states will be mere make-believe if federal
financing is drastically cut.
Likewise, hacking away at the roughly $400 billion domestic
discretionary budget (what’s left of the federal budget after defense,
Social Security, health and safety-net spending and interest on the
national debt) will yield only a rounding error’s worth of savings after
popular programs (which Republicans heartily favor) like cancer
research, national parks, veterans’ benefits, farm aid, highway
subsidies, education grants and small-business loans are accommodated.

Like his new boss, Mr. Ryan has no serious plan to create jobs. America
has some of the highest labor costs in the world, and saddles workers
and businesses with $1 trillion per year in job-destroying payroll
taxes. We need a national sales tax — a consumption tax, like the
dreaded but efficient value-added tax — but Mr. Romney and Mr. Ryan
don’t have the gumption to support it.
The Ryan Plan boils down to a fetish for cutting the top marginal
income-tax rate for “job creators” — i.e. the superwealthy — to 25
percent and paying for it with an as-yet-undisclosed plan to broaden the
tax base. Of the $1 trillion in so-called tax expenditures that the
plan would attack, the vast majority would come from slashing popular
tax breaks for employer-provided health insurance, mortgage interest,
401(k) accounts, state and local taxes, charitable giving and the like,
not to mention low rates on capital gains and dividends. The crony
capitalists of K Street already own more than enough Republican votes to
stop that train before it leaves the station.
In short, Mr. Ryan’s plan is devoid of credible math or hard policy
choices. And it couldn’t pass even if Republicans were to take the
presidency and both houses of Congress. Mr. Romney and Mr. Ryan have no
plan to take on Wall Street, the Fed, the military-industrial complex,
social insurance or the nation’s fiscal calamity and no plan to revive
capitalist prosperity — just empty sermons.
David A. Stockman, who was the director of the Office of Management
and Budget from 1981 to 1985, is the author of the forthcoming book “The
Great Deformation: How Crony Capitalism Corrupts Free Markets and
Democracy.”


http://www.nytimes.com/2012/08/14/opinion/paul-ryans-fairy-tale-budget-plan.html?_r=2&;ref=opinion