Paul Ryan puts together a budget like most Republican, frat-boy types; he lies, cheats, and steals.
Poster boy for “the Republican new-breed conservative”, Ryan is many things, but suspicious that the public-at-large will see through his economic cow pies is not one of them. One would think that after the public plastering his 2012 budget took he would have at least learned to be a bit more creative.
Same Old Song
In reality, Paul Ryan’s 2013 budget is a bad cut-and-paste attempt from last year. He wants to repeal parts of Dodd-Frank that give new power to federal regulators to break up big banks, and argues that the regulations actually make bailouts more likely, rather than less likely. Not that he would posit an alternative. That would require thoughtful consideration of the bigger picture, or even less likely, to good of the American people. His plan would repeal the government’s “resolution authority” and take us back to the pre-Dodd Frank era. You know, the one in which bank bailouts proved necessary to begin with.
The same regulatory reform that forces financial institutions with insufficiencies deemed “systemically significant” be subject to a host of new regulations in order to avert another train wreck like the one from which the U.S. economy is still trying to recover. Dodd-Frank includes a new rule that requires those banks to submit written contingency plans in the event the firm went belly up. They are also required to submit such plans to the Federal Deposit Insurance Corporation, which has new authority to help liquidate troubled firms so as to avoid another systemic catastrophe prompting taxpayer bailouts and more economic mayhem.
The Ryan Budget 2.0 would actually repeal the FDIC’s new resolution authority, arguing that it would have the opposite effect by granting bank regulators “access to taxpayer dollars in order to bail out the creditors of large, ‘systemically significant’ financial institutions.” By doing so, Ryan says his proposal would “end the regime now enshrined into law that paves the way for future bailouts.” Coughcoughcoughbullshitcoughcoughcough.
Naturally, he never goes into further detail to explain why he feels this is the case. Just a gut pain brought on by the off-chance that banks be held accountable I suppose. Other critics of Dodd-Frank have similarly posited that this enables the FDIC to take control of failing firms and rely on taxpayer funds to keep the systemically important parts operational through a government-run “bridge” financial mechanism. Geez, horrors.
Not to confuse Congressman with facts, but The Congressional Budget Office estimated in its report that Dodd-Frank would save the taxpayers over $3.2 billion over the next ten years.
I’m certainly not claiming that independent analysts across the political spectrum have shared Ryan’s concerns that Dodd-Frank doesn’t do enough to stop Too Big to Fail, but their specific worries relate vastly different reasons than Congressman Ryan’s. The independent analysts worry that bank regulators have too little authority to take down failing firms quickly enough.
Repealing that authority, as Ryan proposes, completely eliminates the new government channel for intervention while explicitly prohibiting future bailouts, which certainly becomes more likely if systemically risky banks aren’t wound down in an orderly fashion.
Look Inward Congressman Ryan and Clean Your Own House
In the very first paragraph of the Congressional Budget Office’s analysis of Congressman Ryan’s budget plan, an interesting disclaimer appears.
Rather than bore you with government-speak, the translation is that the CBO hasn’t determined whether Ryan’s budget will achieve the results Ryan says it will. Rather, it looked at what can reasonably be expected assuming Ryan’s budget actually achieves the results that Ryan says it will.
Ryan asked the CBO to assume his tax plan will do the following:
- Raise revenues to 19 percent of GDP and then hold them there.
- He also asks them to assume his Medicare plan will hold cost growth in Medicare to GDP plus 0.5 percentage points.
- He asked them to assume that spending on Medicaid and the Children’s Health Insurance Program will not grow any faster than inflation.
- Lastly, he asked them to assume that all federal spending aside from Medicare, Medicaid and Social Security will fall from 12.5 percent of GDP in 2011 to 3.75 percent of GDP in 2050.
That last assumption is where the Ryan “Budget” Plan really begins to smell worse than three-day old roadkill in a hot Mississippi sun.
Congressman Ryan’s wildly unrealistic calculation is that in 2050, spending on welfare (food stamps) defense, infrastructure, education, research and development, the federal workforce, and everything other non-entitlement program combined will be less than four percentage points of GDP!
Defense spending alone has never fallen below three percentage points of GDP and the likelihood that it will is remote ( candidate Romney himself vows to never let defense spending fall below four percentage points of GDP)
Now, please don’t get me wrong. Politicians from both parties routinely exaggerate spending limits then boast about the results that will result from them. But Congressman Ryan’s budget strains any sense of reality the way Andy Dick strains any sense of public decorum.
Not that any member of the general public will take the time to read, much less understand the underlying delusions of this pile of rubbish. No one will.
And it will surely make Joe Scarborough wildly ecstatic to be able to screech again that “at least the Republicans have put forth a plan!”
Yes, Joe, Paul Ryan has put forth another “plan”. The Bay of Pigs was a “plan” too.
Congressman Ryan’s Budget Plan is just about as realistic, would have worse results, and depends on dunderheads like you to promote it though never having read or understood it.