Ronald Reagan ran the federal government at 22 percent of gross domestic product when the country’s population was much younger and health care consumed about 11 percent of GDP.
Put another way, Ronald Reagan ran the federal government at 22 percent of GDP when the country’s population was much younger, and health care consumed about 11 percent of GDP.
Did I mention that Ronald Reagan ran the federal government at 22 percent of GDP when the country’s population was much younger, and health care consumed about 11 percent of GDP?
Now Paul Ryan says we can run the federal government at 19 percent of GDP as the massive baby-boom generation retires and when health costs (largely for seniors) have already soared to 18 percent of GDP.
Sorry, but Ryan is either deeply confused or doing his best to snooker us.
In the sandstorm of commentary on what’s wrong with the Wisconsin Republican’s budget, its easy to lose sight of the few central facts that should make people of all political stripes scratch their heads. The most important is that Ryan wants to shrink government precisely when we have an unavoidably costly demographic tsunami bearing down on us and when per capita health costs have spiraled. (These costs must be challenged, but the medical industrial complex’s current level of loot has to be the starting point for the debate.)
In 1989, when President Reagan left office, there were 34 million people on Medicare and 39 million on Social Security. In 2025, according to these programs’ trustees, there will be 73 million on Medicare and 78 million on Social Security.
This is not happening because we’re stringing up the “hammock of dependency” that Ryan often invokes. It’s happening because our famously big postwar birth cohort is getting older.
Ryan obviously knows these facts. This means he’s disingenuously trying to use the aging of America to force a severe cutback in the non-elderly, non-defense portion of government, which is already headed toward historic lows as a share of GDP.
“I ... think that the historic size [of government as a share of GDP] is about right, or smaller,” Ryan told me in an interview 18 months ago.
“But how can that be if we’re doubling the number of seniors?” I asked.
“Because we can’t keep doing everything for everybody in this country,” he replied.
Huh? The Reagan comparison plainly irked him.
“If Reagan was at 22 [percent of GDP], how can we be at 20 when we double the number of retirees?” I asked (Ryan was talking of running government at 20 percent of GDP at the time).
“That’s sort of a non sequitur argument, the whole Reagan thing,” he said.
“Because that was then, this is now. That was a defense with a discretionary…
“We were a much younger population.”
“I think you’re turning to Ronald Reagan because we all adore Ronald Reagan,” Ryan said.
“No, I’m just saying it was a much younger population and he was a conservative icon. No one was screaming then, ‘Oh my God, you know, he’s running the government at…’”
“He was spending money on something that people liked him to spend money on, the conservatives did… to win the Cold War. So I think that’s what your point is.”
“But it was a much younger population.”
You see the impasse. Truth is, it’s Ryan who peddles non sequiturs. All through his new plan he insists that the existence of a budget gap means that government is too big. “An unbalanced budget is a sign of overreach,” he writes.
But it is no such thing. “Overreach” is a judgment. An unbalanced budget is math. It means that spending is greater than revenue. We could balance the budget at 19 percent of GDP, or at 15 percent, or at 25 percent. It’s refreshing that after years of make-believe, Ryan has finally decided to take a stab at becoming a fiscal conservative (though even his plan’s magic asterisks have magic asterisks — quite a feat). But the level of spending and taxes at which we fiscal conservatives seek to balance the budget depends on what we want government in an aging America to do.
At 19 percent, Ryan’s vision is an America with 50 million uninsured ... forever. Of infrastructure and R&D investment that trails other advanced nations ... in perpetuity. Of a nation that assigns its least effective teachers to poor children . . . permanently. (Amazingly, Senate Democrats have fallen prey to Ryan’s gravitational pull, with the budget they put out Wednesday coming in at 21.7 percent of GDP in the years ahead, a tad below Reagan-era spending.)
Ryan thinks we’re too dumb to see what he’s up to. Is $41 trillion really not enough for the federal government to spend over the next decade, he asks as he sells his new plan, exploding indignantly on the “t,” as if the Lira-like power of big-sounding numbers should scare us into submission.
It speaks volumes about today’s political culture that this thin gruel vaulted Ryan from obscurity to the “intellectual leadership” of his party and a national ticket. If all that was possible, imagine what a sensible plan championed by an intellectually honest Republican – Jon Huntsman, perhaps? – could do.
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