The Path to Ruin – a Review of New Republican Budget Proposal

On Tuesday [4-5-11]America got a glimpse of just exactly what Republican legislators think of the very people they were hired to serve.  Congressman Paul Ryan of Wisconsin—chairman of the House Budget Committee and designated Republican budget savant– released his much anticipated budget proposal for 2012, telling reporters that it wasn’t a budget, “it’s a cause.”

It’s a cause all right……..a cause to make one wish he or she lived in Canada.

In his budget proposal, Ryan put in writing his plan to dismantle Medicare by turning it into a voucher system, which according to the non-partisan Congressional Budget Office will require seniors to become responsible for 61% of the costs of their medical care out of their own pockets by 2022, and 68% by 2030.  So if you’re not rich and you can’t afford medical care, too bad.  You’re on your own.

Ryan also wants to essentially eliminate all Medicaid programs, turning them into block grants for the states.  Under his plan each state will receive a set amount of money from the federal government to apply to in-state Medicaid programs (MediCal in California).  States will ultimately end up having to spend more on Medicaid just to keep them running, if they opt to keep them at all.  There is also no provision in Ryan’s plan that mandates that any block grants be used for such purposes, so in theory, states can use the money for whatever they want, including to fund corporate tax cuts.

I suppose we should thank Congressman Ryan for putting this out there and exposing the true intentions of the Republican Party:  To dismantle the entire social safety net, eradicate the middle class, and recreate a medieval caste system by putting all the wealth and power into the hands of the social and economic elite.

Or, as one Washington Post columnist puts it, what this Republican plan really seeks is to “repeal the 20^th Century.”

The farce of a proposal, Ryan claims, is aimed at streamlining government; at reducing the deficit; and reducing the national debt.  But the plan does none of these.  In fact, according to the CBO, Ryan’s plan increases the national debt in the first 10 years, only producing real progress on the debt and deficit 30 years from now.

Republicans across the board have applauded Congressman Ryan for his efforts, and have lauded this proposal as a “roadmap to prosperity.”  It’s not.  It’s a roadmap to ruin.  It places even broader burdens on the backs of the elderly and the poor, while making the rich even richer.  The middle class that was built by FDR’s New Deal, unions, and Lyndon Johnson’s Great Society is all but disappearing.  Fifty years ago there wasn’t a huge gap between the wealthiest Americans and the middle class.  But Republican politics and “Voodoo Economics” have changed all that.

Ryan and his contemporaries really just don’t get it.  By so zealously pushing this profligate plan, by demanding a cut in the top tax rate from the current 35% down to 25%, all they’re really doing is perpetuating the false notion that by making the rich even richer it’s good for the American economy and brings prosperity to us all.  We know from the last 20 years that this is a pure fantasy created by Ronald Reagan and his “trickle down” economic policies.  And by shifting even greater wealth to the wealthy, the only thing we really succeed in doing is to create an even greater disparity between the haves and have-nots.

The Republican argument goes like this:  It is small businesses that drive the American economy.  The more money business owners have, the more jobs they can create, the more vibrant our economy will become, and the better off we’ll all be.  And that sounds great and reasonable on the surface.

The only problem with that theory is that they have it completely backwards.  It is the middle class that makes an economy run efficiently.  Business and industry thrives when there is a demand for their goods and services.  The way to create demand is by putting more money in more people’s hands, thereby allowing them to buy the very goods and services these businesses supply.  And when there is a demand for the products and services businesses provide they often have to expand to meet the increased demand, creating more jobs, which puts more money in even more people’s pockets, which perpetuates a higher quality of life………. In short, the economy grows.

When examined carefully enough, Paul Ryan’s “Path to Prosperity” is exposed for the path to ruin that it really is.  It not only decimates the healthcare safety net that elderly and poor Americans depend on, it cuts taxes on the wealthiest Americans while raising the burdens on everyone else.  And by putting more money into the hands of the wealthy and out of the hands of the middle and lower classes, it actually brings harm to the economy by suppressing demand for all but the bare essentials.

When there is no demand, there is no reason for business owners to produce more, and thus no reason to reinvest in their businesses.  People who don’t have money can’t spend it.  People who have a lot of money don’t spend it.

Ryan’s budget plan is nothing more than a fairytale of the future.  It is pure budgetary fiction.  For example:  Ryan claims that, by his figures (actually, figures provided by the conservative think tank The Heritage Foundation, which Paul Krugman ridicules here) he will have unemployment magically reduced to 4% by 2015, and all the way down to 2.8% by 2021.  This would truly be a heroic feat, since 5% unemployment, by statistical standards, is considered to be full employment.  And the U.S. hasn’t seen employment levels that low in over 50 years.

But wait!  There’s more!  The Heritage Foundation—through Ryan’s budget—projects that the housing market will suddenly return to the same levels last seen at the height of the housing bubble in 2006.  By their reckoning, people will be making less money, will be even more burdened by healthcare costs, will see education decimated, but they’ll be buying more houses.  Makes sense, I guess.  Well, no, actually it doesn’t.

It’s difficult to believe that American voters are really this gullible.  Republicans hate government.  They’re convinced that it can never work; that government is inherently bad.  Yet we’ve entrusted these people to run the very government that they hate so much.  We’ve entrusted our future to people who want to turn it over to the corporate elite to do with what they please.

If we’re really that dumb and apathetic, then perhaps we deserve the future they’re leading us toward.

Tagged as: budget, Medicaid, Medicare, Paul Ryan