FacebookTwitterGoogle+RedditEmail

Paul Ryan’s Austere Future for America

by

Mark Twain once noted, that while “history does not repeat itself, it does rhyme.” Congressman Ryan’s budgetary rhyme is to suggest every year, without fail, that only by cutting government spending will the economy grow. It’s an annual argument for austerity that needs to be called out for the snake oil that it is.

Every year Ryan first bemoans the size of the debt, omitting to mention that relative to the size of the US economy, the US is in much better fiscal shape than most of Europe and almost all of the rest of the developed world. US net debt to GDP is down to 73 percent while Europe’s debt is getting bigger not smaller, why? Because when you cut spending, even government spending, the size of the economy shrinks (teachers eat and drive cars too) and the same amount of debt gets bigger not smaller. Paradoxically then, the more you cut the bigger your debts become. Ask Greece. They have cut 30 percent of GDP and increased their debts by 50 percent at the same time.

In fact, the world has been running a large natural experiment on austerity for the past five years and the results are in. When the rich countries of the world bailed out their banks, debts shot up as we turned private debt into public debt. That’s where “all the debt” came from. Now, to pay it back, the GOP aren’t going to ask Wall Street for the cash. They want Main Street to pay for it through cuts to government spending that directly benefit ordinary Americans. To sell such snake oil one has to forget that Europe has been trying to do exactly this “cutting your way to growth” since 2008, while the US refused to make the cuts apart from the idiotic sequester – God Bless Gridlock. The result? European joblessness is twice the US level while Eurozone growth is one fifth of that of the US. Yes, one fifth.

And what Ryan wants us to do is to not only to follow the European example, but to go much further, with even more severe cuts to social spending and research, of which the latter generates tomorrow’s innovations and economic growth. Really, it’s true. To take two examples, 40 percent of the drugs that US Pharma makes, and that all US seniors love, comes from NIH (government) funded research. And that iPhone in your pocket may have been assembled by Steve Jobs, but he didn’t invent the GPS and TCP-IP technologies at the heart of it: the wasteful ‘overreaching’ government did that.

In short, Ryan’s budget combines the harshest Greek-style social cuts and combines those cuts with nearly a trillion dollars of new military spending over the next decade – when we are already the biggest military spender in the world with the next nine powers added together coming nowhere near us. If there was ever a waste of money to be had, surely this is it? Ryan also asserts his budget cuts are in fact small and don’t represent austerity at all. This slight of hand trick results from arguing the budget is only modestly cut, but this fails to mention that his cuts to health and research are massive. Thus, overall spending cuts are only smaller because of his massive proposed increase to military spending. Moreover, Ryan’s ‘orange-alert’ warnings about Medicare drowning in debt have to be re-thought in light of rapidly declining growth of healthcare costs. Indeed, the past five years have shown the slowest increase in health costs since records were kept.

One would think we learned our lesson regarding tax cuts for the wealthy, simplistic supply-side nostrums that fueled Wall Street excesses, and ultimately caused the biggest crash of our economy since the Great Depression. And yet every year we hear this same argument regardless of the overwhelming evidence to the contrary. Facts, it seems, never get in the way of a ‘good’ ideology. Especially one that enables you to bail out your friends and pass the costs on to your enemies.

Mark Blyth is Professor of International Political Economy and Director of the International Relations and Development Studies Programs at Brown University’s Watson Institute for International Affairs. He is the author of the best selling Austerity: the History of a Dangerous Idea (Oxford University Press, 2013), soon in a new paperback edition.

Jeffrey Sommers is Associate Professor of Political Economy & Public and Senior Fellow, Institute of World Affairs of the University of Wisconsin-Milwaukee and Visiting Faculty at the Stockholm School of Economics in Riga. His new book new book (with Charles Woolfson), The Contradictions of Austerity: The Socio-economic Costs of the Neoliberal Baltic Model  is available from Routledge.

* A version of this article originally appeared in the Milwaukee Journal/Sentinel.

 

 

 

 

Weekend Edition
November 17, 2017
Friday - Sunday
Paul Street
Thank an Anti-War Veteran
Andrew Levine
What’s Wrong With Bible Thumpers Nowadays?
Jeffrey St. Clair - Alexander Cockburn
The CIA’s House of Horrors: the Abominable Dr. Gottlieb
Wendy Wolfson – Ken Levy
Why We Need to Take Animal Cruelty Much More Seriously
Mike Whitney
Brennan and Clapper: Elder Statesmen or Serial Fabricators?
David Rosen
Of Sex Abusers and Sex Offenders
Ryan LaMothe
A Christian Nation?
Dave Lindorff
Trump’s Finger on the Button: Why No President Should Have the Authority to Launch Nuclear Weapons
W. T. Whitney
A Bizarre US Pretext for Military Intrusion in South America
Deepak Tripathi
Sex, Lies and Incompetence: Britain’s Ruling Establishment in Crisis 
Howard Lisnoff
Who You’re Likely to Meet (and Not Meet) on a College Campus Today
Roy Morrison
Trump’s Excellent Asian Adventure
John W. Whitehead
Financial Tyranny
Ted Rall
How Society Makes Victimhood a No-Win Proposition
Jim Goodman
Stop Pretending the Estate Tax has Anything to do With Family Farmers
Thomas Klikauer
The Populism of Germany’s New Nazis
Murray Dobbin
Is Trudeau Ready for a Middle East war?
Jeiddy Martínez Armas
Firearm Democracy
Jill Richardson
Washington’s War on Poor Grad Students
Ralph Nader
The Rule of Power Over the Rule of Law
Justin O'Hagan
Capitalism Equals Peace?
Matthew Stevenson
Into Africa: From the Red Sea to Nairobi
Geoff Dutton
The Company We Sadly Keep
Evan Jones
The Censorship of Jacques Sapir, French Dissident
Linn Washington Jr.
Meek Moment Triggers Demands for Justice Reform
Gerry Brown
TPP, Indo Pacific, QUAD: What’s Next to Contain China’s Rise?
Robert Fisk
The Exile of Saad Hariri
Romana Rubeo - Ramzy Baroud
Anti-BDS Laws and Pro-Israeli Parliament: Zionist Hasbara is Winning in Italy
Robert J. Burrowes
Why are Police in the USA so Terrified?
Chuck Collins
Stop Talking About ‘Winners and Losers’ From Corporate Tax Cuts
Ron Jacobs
Private Property Does Not Equal Freedom
Kollibri terre Sonnenblume
Mass Shootings, Male Toxicity and their Roots in Agriculture
Binoy Kampmark
The Fordist Academic
Frank Scott
Weapons of Mass Distraction Get More Destructive
Missy Comley Beattie
Big Dick Diplomacy
Michael Doliner
Democracy, Real Life Acting and the Movies
Dan Bacher
Jerry Brown tells indigenous protesters in Bonn, ‘Let’s put you in the ground’
Winslow Myers
The Madness of Deterrence
Cesar Chelala
A Kiss is Not a Kiss: Sexual Abuse and Exploitation of Children
Jimmy Centeno
Garcia Meets Guayasamin: A De-Colonial Experience
Stephen Martin
When Boot Becomes Bot: Surplus Population and The Human Face.
Martin Billheimer
Homer’s Iliad, la primera nota roja
Louis Proyect
Once There Were Strong Men
Charles R. Larson
Review: Mike McCormack’s Solar Bones
David Yearsley
Academics Take Flight
FacebookTwitterGoogle+RedditEmail