Chicago, Athens, and Jerusalem

Paul Ryan is a Republican United States Congressman representing Wisconsin’s 1st congressional district. Over the past two years, he has become a leading voice among the Republicans on the subject of fiscal policy (government taxation and spending). Yesterday, superblogger Andrew Sullivan echoed economist Paul Krugman by accusing Ryan of being a fraud, writing:

I have to say that Paul Krugman made a very strong case that the young GOPer is still drinking supply-side Kool-Aid.

…I remain pretty much persuaded by Krugman’s broad critique, however. Cutting taxes at this point in American history, in the face of this much debt, strikes me as loony.

From my vantage point, it is Sullivan who is drinking Krugman’s hyper-partisan left-wing Kool-Aid. I understand that Sullivan is angry about Republicans who propose tax cuts without recognizing the need for substantial spending cuts and tax increases to put America’s fiscal house in order (and on that account I agree with him). But that’s not what Ryan is doing. Ryan developed his plan for across-the-board reductions in government spending as a way to ease the US debt burden without having to employ extremely high tax rates. Ryan further contends that we can climb out from under the debt through economic growth if we stimulate the economy with carefully-targeted tax cuts. There is a legitimate debate to be had about whether we could bolster economic growth and help claw our way out of the current recession with tax cuts, just as there is a continuing debate about the need for additional stimulus in the form of increased government expenditures (some in the form of aid to the states, which Congress is considering this week). While I am probably closer to Sullivan than to Ryan on the subject of whether or not we need tax cuts right now, it inefficient, ignorant, and just plain rude to label anyone who favors tax cuts as “loony”–we are, after all, still reeling from the effects of one of the largest recessions in history. It may be silly to think that we can tax-cut our way out of a recession, but from the standpoint of economic theory it’s no sillier than thinking we can government-spend our way out of a recession, which has been the policy of the Obama Administration and the Democrat-controlled Congress for the past two years.

Furthermore, Paul Krugman’s attacks on Ryan are at least somewhat spurious. Krugman alleges that Ryan was being disingenuous by having the Congressional Budget Office (CBO) only score the part of Ryan’s “Roadmap” involving spending cuts, while ignoring Ryan’s proposed tax cuts, which would understandably eat away at much of the savings that Ryan’s spending reductions would create. The only problem with this line of attack is that the CBO doesn’t, as part of its operations, score tax cuts. As Megan McArdle, the business and economics editor for the Atlantic, points out in an excellent blog post entitled “Krugman is Wrong on Ryan and the CBO”, scoring tax cuts is the responsibility of the Joint Committee on Taxation (JCT). And Ryan did ask the JCT to score his tax cut proposals, although the JCT turned him down–possibly due to its heavy workload scoring the tax provisions of healthcare reform.

As an aside, I should say that I agree with a few of Krugman’s criticisms of Ryan’s plan, notably that Ryan fails to specify precisely what programs he would cut to achieve some of his spending reductions, and that other spending reductions rely on cuts in politically-sensitive Medicare, which are unlikely to ever be enacted.

However, Krugman writes:

The Ryan plan is a fraud that makes no useful contribution to the debate over America’s fiscal future.

This, of course, is just partisan vitriol. Ryan’s plan makes several useful contributions to the debate, even if it is not the most realistic or workable plan that has ever been proposed. Paul Ryan may not be the fiscal prophet that some on the right wish him to be, but he certainly doesn’t fit Paul Krugman’s caricature of a scammer, charlatan, or “flimflam man”.