The Ryan Budget Myth and Obamacare

Popular Economics Weekly

Representative Paul Ryan has come up with his latest Republican budget proposal, and it changes nothing. It neither promotes economic growth, nor reduces the budget deficit, as with past Republican budget proposals. That’s because its real target is to win some Senate seats by targeting Obamacare, for starters. And it can’t do that without telling some whoppers, including the claim that it can balance the federal budget by 2024.

Why do Ryan Repubs keep insisting on repealing Obamacare, even though they are conceding that with 7.1 million now enrolled as of March 31, it won’t be repealed? Because with fall midterm elections coming up and the prospect of winning some Democratic Senate seats looming, Ryan, et. al., want to keep up the myth that government supported programs can’t work, including health insurance, even though the Affordable Care Act, aka Obamacare will be a success.

We know this because Massachusetts’ Romneycare health plan has been working for both young and old, as well as employers. Employers haven’t cut and run, but instead opted to insure more of their employees, not less. For instance, the percentage of small businesses with more than 3 employees have increased their coverage from 70 to 76 percent.

Ryan has to cling to the Republican myth that cutting government spending—either by weakening the social safety net of pensions and health care, or weakening environmental protection and educational programs—will cause the wealthiest among us to invest in more jobs and growth, because that’s what the wealthy will do with the lower taxes and increased income that results from smaller government expenditures.

But we know that’s not what the 1 percent, and those who are paid by and support the 1 percent do. They have instead used those excess profits to speculate—in the financial markets, mainly. And that in turn has provoked the huge overinvestments in dot-com infrastructure and housing that brought on the last two recessions, which in turn has slowed job creation and overall economic growth.

This is no secret to most Americans. The wealthiest spend a smaller percentage of their income on necessities, and in doing so reduce the demand for the most essential goods and services. But Republican-dominated states would have their constituents believe the wealthiest are their benefactors, when in fact those Red states are most dependent on government aid because they are also the poorest states.

Ryan proposes to trim $5 trillion from government spending. He said it would bring federal spending and taxes into balance by 2024, through steep cuts to Medicaid and food stamps, and the total repeal of the Affordable Care Act just as millions are reaping the benefits of the law, according to the New York Times.

But with current programs the deficit would increase just 1 percent to 4 percent of GDP over the next 10 years, according to the Congressional Budget Office. So why cut the social welfare programs that benefit so many, including our seniors and retirees, when it isn’t necessary?

Raising doubts about the effectiveness of Obamacare is the real target of Ryan’s plan, as we said. That’s the real reason Republicans continue to make these unpassable proposals. They want to keep their majorities in the Red states, without which they couldn’t continue the transfer of wealth from those most in need to those least in need, and which perpetuates the growing inequality of the socioeconomic classes.

In fact, we already know the result of such policies. Under GW Bush, when the Republican agenda of lower taxes and increased defense spending was in full flower, fewer jobs were created and the budget deficit ballooned. And that led to the Great Recession.

Harlan Green © 2014

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About populareconomicsblog

Harlan Green is editor/publisher of, and content provider of 3 weekly columns to various blogs--Popular Economics Weekly and The Huffington Post
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