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Rep. Paul Ryan debates David Brooks on economics

December 6, 2010 10:57

We risk crossing a tipping point where the size of government will do irreparable fiscal and moral damage – where we bankrupt the country and turn the safety net into a hammock that lulls able-bodied people into lives of complacency and dependency that drains them of the will to make the most of their lives.

How Much Government Is Good Government? – AEI Debate

Congressman Paul Ryan’s opening remarks:

AEI billed this debate as the case for limited government, represented by me, versus the case for energetic government, represented by David. Unfortunately, I’m not going to do a very good job upholding my end of the bargain, because I happen to believe that the choice is a false one. In fact, energetic government is impossible without limits.

The idea that mainstream conservatives are anti-government is simply not true, and Arthur and I tried to make that point in our first op-ed in the Wall Street Journal. We quoted Friedrich Hayek from his book, The Road to Serfdom, in which he “reminded us that the state has legitimate—and critical—functions, from rectifying market failures to securing some minimum standard of living.” Edmund Burke, in many ways the founder of modern conservatism, was a champion of ordered liberty, recognizing the impossibility of one without the other. And recent history is filled with examples of conservative leaders who used government to achieve conservative ends.

Think about Rudy Giuliani. Think about what he did to clean up the police department in New York. Living in New York City is not the same as it was before he arrived. Look at Tommy Thompson, one of my political mentors, the former governor of Wisconsin, who took bold steps to clean up a moribund welfare system in Wisconsin. Take a look at Mitch Daniels, bringing consumer-directed health care reforms to Indiana. Think about Jeb Bush, who brought some much-needed and bold education reforms to Florida These leaders have a couple of things in common: They were no strangers to energetic government, and they are widely admired by mainstream, limited-government conservatives.

I’ve also embraced energetic, yet limited government with my Roadmap for America’s Future. It is a plan that does not do away with government. It’s a plan that does not even do away with our entitlement programs. It is a plan that makes these entitlement programs sustainable. It’s a plan that makes these programs something we can live with over the next century while keeping a limited government and a free-enterprise society.

I’ll talk more about the Roadmap in a minute, but I’d like to expand more upon this idea that energetic government is impossible without limits. Big government is lethargic government. A government whose size and scope is not properly limited will always seek to raise taxes before it looks for ways to innovate and do more with less. This is why those who do not share our attention to limited government have insisted that higher taxes are the best way, and the easiest and first approach, to close our yawning fiscal gap.

This is a solution I have rejected, not simply because I’m married to some magical, absolutely perfect level of tax revenue as a percentage of GDP. It is because I have a fundamental difference of opinion with those who think our biggest problem is not enough revenue. In fact, focusing just on the size of government entirely misses the point. We should not be asking, “How big should our government be?” We should be asking, “What is our government for?” What is its purpose? Should government enforce the rules, or pick winners and losers? Should government provide a basic safety net, or set up enormous transfer programs to fund entitlements for the middle-class and the wealthy? Is a government instituted by us to secure our liberties and allow us to thrive compatible with a state that consumes an ever-growing share of the private economy?

Rather than focus on size alone, we should be asking, “What makes America exceptional?” Who are we and what do we aspire to be at this juncture in our history? Abraham Lincoln said it best: “The progress by which the poor, honest, industrious and resolute man raises himself, that he may work on this own account and hire somebody else… is the great principle for which this government was really formed.” Do we want to have an opportunity society with a robust but circumscribed safety net, so that Lincoln’s resolute man is free to work, to take chances, to better himself? Or do we wish to inhabit a stagnant, cradle-to-grave welfare state, where opportunity is sacrificed to a misguided vision of equality? If we answer these questions correctly, the size of government will take care of itself.

If we answer these questions incorrectly, we risk crossing a tipping point where the size of government will do irreparable fiscal and moral damage – where we bankrupt the country and turn the safety net into a hammock that lulls able-bodied people into lives of complacency and dependency that drains them of the will to make the most of their lives. We do face a choice, and a battle over that choice.

On the fiscal side, we now face a debt so massive that, sooner than we think, we will be facing the collapse of our social safety net. Should the government fail to reform entitlements, those very programs will collapse under their own weight and bury the next generation under a crushing debt. Clinging to the status quo will not only lead, inevitably, to economically stifling tax increases, but to deep, sudden, and highly disruptive benefit cuts. Failing to address this problem now – when the necessary adjustments are manageable – assures forced austerity in the near future, imposed by credit markets in a state of panic.

On the moral side, I find the prospect of irreparable moral damage just as troubling, and I know David does as well. Europe’s people have labored under the rock of its welfare state for decades, and now that Europe’s debt crisis has lifted the rock, we see the moral ugliness has developed underneath. Turn on the TV and watch French teenagers lobbing Molotov cocktails at each other, burning down cars and schools, protesting an advancement of the retirement age and reductions in fat pensions they haven’t even begun to earn yet. Take a look at British university students shattering windows because they don’t want to share the cost of their own educations. Greek mobs murdering bank tellers because their workplace happens also to be a symbol of fiscal reality? Good grief.

Let’s contrast these riots with the Tea-Party protests we’ve seen over the last year or two. Instead of taking to the streets to demand more from the government, these citizens took to the streets peacefully to ask government to do less, to take less, and to return itself to the role for government envisioned by our Founders. David has argued that the Tea Party’s conception of this nation’s founding principles is flawed, and that energetic government has always been a part of this country’s tradition. I agree with David on the second part, but I think he has missed what the Tea Party picked up on, and that is that the current president’s vision for this country represents a shift, not just in the size of the government, but in the kind of government we have. Nowhere has this been on more vivid display than in the health-care debate.

The overriding problem with health care is the fact that health-care costs and prices go up faster than the rate of inflation, outpacing our incomes, so we know we’re on an unsustainable path. There are two approaches to this problem that simply cannot be reconciled. One approach is represented by the Democrats’ health-care bill, the Affordable Care Act, with its trillion-dollar expansion of government and its reliance on the same kinds of price controls that have failed for decades to control costs. The approach outlined by some of us – one that I offered with Alice Rivlin – would deliver premium support to individuals, run the money through the individual instead of the government, peg that support to a rate closer to general inflation, and use a decentralized market process to discover efficiencies.

There really are only two ways to go: Run the money through the individual, make them more powerful, and reform our insurance laws so that consumers can have more power, and so that the providers of health care compete with each other for our business in a marketplace; or run the money through the government, and trickle it down, top to bottom, through price controls and formulas. That’s the choice we have on health care.

I like to think of the plan I’ve offered as an example of energetic, smart government. It takes the Burkean approach of working to conserve the arrangements that people have built their lives around. The radicals are those who are committed to centralized approach to cost control and a blank-check version of entitlement spending, even though this approach has manifestly failed. In fact, with the Affordable Care Act, they doubled down on the same doctrine and the same dogma. This vision for our future – a vision that imagines we can just tinker at the margins of our entitlement programs and somehow avoid the coming collapse – would lead us into the kind of harsh austerity that would hit those who rely on the safety net the most, the hardest. It is a vision that is simply not compatible with mine, and I believe that there is nothing to be gained by pretending to Americans that we do not face a stark choice between the two.

Let’s focus on today, not the day after tomorrow. The consequences of this choice are too important to pretend that it doesn’t exist. I don’t want to get into a “do it for the kids” cliché here, but I think it is important to stress: What we are doing, and what are we doing to them? And if you simply look at what we are doing to the next generation, it is simply immoral. My three kids are what motivated me to put this Roadmap out there in 2008, back when deficits were going down during the Bush administration, before we were on the precipice of this debt and economic problem. The storm clouds were already growing then, and we could see that we needed a course correction, and that we would be giving our kids a lower standard of living and an impoverished and diminished country. Well, now the storm is right in front of us.

I see greatness in my three kids – who are six, seven and eight – as I’m sure every parent does. But as someone who spends all his time thinking about the budget – probably more than a healthy person should – I know that we are not building that prosperous opportunity society that they need in order to maximize their potential. There is nothing more dispiriting than to think that they won’t be able to chase their dreams because of the decisions that we make or fail to make right now. There is nothing that disturbs me more in this debate than to think of my kids coming into a country and a society where they’re more likely to be dependent on the government for their future than they are upon themselves.

The situation is even worse today than it was when we first started talking about these ideas – to the point that I am increasingly convinced that we might see a debt crisis in the near future. This is why it so incredibly urgent to act, to make no bones about the choice before us, and to mobilize a citizenry that appears receptive to our message, as evidenced by this past November 2nd. We cannot skirt the edges of this problem. We must truly change course. And we don’t have the luxury of waiting until the “day after tomorrow” to make this choice. We have to decide today who we are and what kind of country we want to be, before we move on to other debates.