Obama vs. Ryan and the Republicans?

"This is why I placed a question mark in the title to this blog. Is this a really meaningful debate between Obama and the Republicans? Shall Americans drink a lethal brew that is dyed red or dyed blue? What difference does it make?"

Obama vs. Ryan and the Republicans?
Posted by Michael S. Rozeff on April 6, 2012 11:22 AM

Obama has opened fire on Paul Ryan's plan for government spending. Romney has endorsed the Ryan plan. This debate will go on until election day.

Both parties view the nation as "one". Both parties view the economy as "one". Both assume that the powers of government over the nation and the economy are legitimate. Therefore, they both frame the debate in terms of the size and disposition of government revenues and spending in how well they create economic growth and wealth in some macro or national sense.

The heart of the debate, in their terms, is very simple. Is government taxing and spending productive for the economy? Obama over and over says that government taxing and spending is productive for the economy, but of course he soft-pedals tax increases and burdens.

The Republican position is cloudier and weaker in one aspect of this debate because Republicans support government spending too and have initiated many substantial programs as Obama correctly points out. In another aspect, their position is stronger. They argue basically that government spending is productive but subject to diminishing returns. If deficits are huge, that is, in their view, a signal that previous government spending (which the Democrats are fond of calling investments) is not generating increased wealth, and thus income, and thus tax revenues. And so the Republicans propose federal budgets that bring the government budget into balance, not that they ever will enact such measures.

Obama claims that his budgets will result in growth and balance, but that claim is his weak spot and open to heavy criticism from the Republicans, although they walk a tightrope because they too favor lots of government spending. Obama is cloudy (evasive) on when, if ever, government spending becomes unproductive and when, if ever, deficits are brought down by the higher taxes generated by higher economic growth (without raising tax rates).

So, in sum, Obama's strongest debating point is that Republicans admit that some (indeed much) government spending is good for the economy, and he then criticizes them for not spending enough. Ryan's and the Republicans' strong point is their claim that too much government spending runs into diminishing returns. This shows up in huge deficits, slow economic growth, high unemployment, burdens on future generations, and higher tax rates. Obama counters that by blaming all of this on his predecessors.

Two sentences from a 2009 Congressional Budget Office (CBO) report crystallize the bounds of the debate:

"Under current laws and policies, rapidly rising health care costs and an aging population will sharply increase federal spending for Medicare, Medicaid, and Social Security. Unless increases in revenues kept pace with escalating spending, or spending growth was sharply reduced, soaring federal debt would weigh heavily on economic output and incomes."

Obama claims that revenues will grow because more government spending now and in the future is more productive, especially as he is the Wise Man who, when re-elected, will eliminate waste and redirect that spending into productive channels.

Ryan and the Republicans don't believe this, of course. Their claim is that the federal debt is already soaring and already weighing on wealth creation, although of course, in their view, not (and never) that part of it that supports  military spending or that part of it that they concede is "good" spending. And of course they disavow their responsibility in bringing government finances into such a sorry condition in their past administrations and votes.

Unlike these two parties, the anti-state contingent, which includes libertarians (one would hope), anarchists of many stripes, anarcho-capitalists, voluntarists, panarchists, minarchists, Ron Paul and his many supporters, secessionists, small government supporters, freedom-lovers, supporters of a constitutional republic, etc. (these categories not being mutually exclusive or exhaustive), all of these I say recognize or should recognize that existing government as conducted by the existing state is raising (robbing) and wasting vast sums of money in unproductive ventures, indeed counterproductive ventures that destroy wealth, impede the production of wealth, not to mention destroying lives in the most blind, cruel, and insensitive ways. Similarly, it is regulating behavior with the same effects. It is only through the ability of Americans to work around all of this, openly and underground, with a strong heritage of invention and entrepreneurship, that has allowed them to make headway against the state's onslaught.

So, getting back to the central question: Is government taxing, regulation, and spending productive for the economy? Instead of citing mountains of research done by libertarians, this time around I will cite a short summary written by Brian M. Riedl at the Heritage Foundation. He makes the case quite well as to why government spending does not stimulate economic growth. He references studies that find this empirically. He comes right out and says "Mountains of academic studies show how government expansions reduce economic growth."

Are either Obama or the big spending Republicans (which is nearly all of them) listening? Do they read? Are they seriously interested in the progress and freedom of Americans? They condemn themselves by their own votes. How many have the courage to lead, which means telling Americans truths that are unpleasant as well as going against the accepted currents of false thoughts and beliefs? How many are willing to educate themselves, admit their errors, and change their positions?

Are journalists interested? Do they read and think? Are they willing to challenge both parties the way that Ron Paul has?

We are going to hear a debate on government and the economy for the next 7 months. Americans will be asked to make a choice between Romney and Obama. This is a  choice between ingesting a lot of poison and a lot more of poison. Both sides support poisonous policies.

This is why I placed a question mark in the title to this blog. Is this a really meaningful debate between Obama and the Republicans? Shall Americans drink a lethal brew that is dyed red or dyed blue? What difference does it make?

Debate is one thing. Governing is another. Once in office, the two plans of the two parties will end up converging through compromise and politics. Voting in elections won't matter.

The more meaningful debate is on other grounds: pro-state or anti-state. Or: pro-taxes versus anti-taxes.

What did Lincoln say, "Can we, as a nation, continue together permanently­forever­half slave, and half free?" Can domestic tranquility be maintained if half of us Americans pay income taxes to the other half that doesn't? How long before that erupts into debate or serious friction? How long before that alone divides the supposed nation? What happens if those who pay income taxes for the benefit of others begin to become anti-state in large numbers while tax recipients become pro-state?