Paul Ryan’s vision for America

Matt Continetti has a good piece up on Paul Ryan’s alternative budget proposal over at the Weekly Standard.

Obama, White House budget chief Peter Orszag, and Democratic Congressional Campaign Committee chairman Chris Van Hollen have all attacked Ryan’s proposal as hurting the elderly. So has the Democratic National Committee and the White House-friendly media. In his latest column, Time magazine’s Joe Klein writes that the Roadmap is “an all-out assault on the financial security of the nation’s most devout voters.” The Washington Post’s domestic policy blogger wrote last week that “Ryan’s budget proposes reforms that are nothing short of violent.”

Not so. Ryan preserves the current entitlement system for everyone over the age of 55. Nor do the critics mention that the only way to avoid a fiscal crisis decades from now is by means-testing benefits, raising the retirement age, and otherwise reducing the government’s future obligations. The alternative is insolvency and “austerity plans” imposed by the IMF.

Liberals accuse Ryan of cutting future Medicare benefits. True enough—but they’re missing the point. “Any reform would do that,” he says. “They want to do it by a government monopoly and rationing. We attack the root cause of health care inflation by introducing free-market mechanisms into the system.”

The fundamental trade-off that we’re talking about here is not between entitlements and a free market. That’s not even the right way to phrase it.  The real trade-off, down the road, is between entitlements we have to find a way to pay for and jobs.  Either the tax rate is going to go up high enough to pay for everything everybody says they want, directly impacting investment in the private sector and the joblessness rate, or spending needs to be curtailed.  In a big way.

Realistically, what this means is a combination of a broad-based consumption tax (or VAT), the means-testing of benefits, and a focus on paying down the country’s soaring debt.

What we need to avoid is over-taxing what would otherwise be money invested in the American economy, and in American jobs.

Paul Ryan’s budget may not be politically feasible, but it should definitely be a wake up call to both parties.  If less drastic measures aren’t taken soon, it’s not at all unrealistic to imagine something as sweeping as Ryan’s budget being enacted.  Healthcare sits at the heart of this mess, and there’s no way that simply increasing the government’s share of the problem will lead to it being resolved – anymore than federal involvement in education has led to soaring test scores (though it has led to a soaring number of new standardized tests…).  This is not to say that government has no roll to play in healthcare.  That is a foregone conclusion at this point.  However, if we don’t find ways to involve the government in a limited way, the problems with cost-containment will become precarious indeed.