Rep. Paul Ryan Has No Idea What He's Talking About
There is no better evidence of the Republican Party's economic illiteracy than Rep. Paul Ryan (R-WI), the chair of the House Budget Committee. Ryan is supposed to be the serious, wonky Republican; the slide-rule-wielding budget expert that Republicans — and reporters — turn to when they want to pretend the party isn't just a bunch of shrieking know-nothings. But Paul Ryan has no idea what he's talking about. (Or, he's an irredeemable liar. Your choice.)
Remember back in the spring, when House Speaker John Boehner (R-OH) was the subject of a brief flurry of news reports on several of his more egregious economic falsehoods? Paul Ryan also made almost all of them. Ryan is wrong about whether the economy has grown and what caused recent deficits. He's wrong about how U.S. taxation of businesses compares to that of other nations. He's wrong about whether the Recovery Act created jobs. He's wrong about whether Alice Rivlin supports his plan to replace Medicare with vouchers, wrong about whether his tax proposals are "just like" those supported by deficit commission Democrats, and wrong about whether Defense Secretary Robert Gates criticized President Obama's proposed defense cuts. He doesn't even know whether he wants to accuse President Obama of "painful austerity, the kind you see in Europe" or of pursuing a "European-style cradle-to-the-grave social welfare state."
So it shouldn't be surprising that yesterday, Ryan was wrong about the cost of regulations on businesses. Or that in his speech to the Heritage Foundation on Wednesday, Ryan was wrong about economic mobility in America compared to other countries. It isn't even surprising that, as Jonathan Chait has explained, almost everything else in Ryan's speech was wrong, too. And here's one more thing Ryan was wrong about in his much-hyped speech:
Remember that 2008 debate, when ABC's Charlie Gibson pointed out that raising the capital gains tax rate actually tends to drive revenues down?
Obama replied: "Well, Charlie, what I've said is that I would look at raising the capital gains tax for purposes of fairness." That's the kind of logic we are unfortunately seeing today.
Yes, I do remember that. I also remember that Charlie Gibson was wrong, and drew immediate rebuke from economists. Tax Foundation economist Gerald Prante noted that Gibson demonstrated his "ignorance on the topic of capital gains taxation in this exchange" by confusing causation with correlation. Prante added:
Much of the short-run response to changes in the capital gains tax rate are for tax timing purposes. This is a well-known fact, and it is why CBO projects a huge spike in capital gains collections in 2010 (the last year of the scheduled low 15% rate on long-term gains) and thereby also a large decline in 2011 (when the rate on long-term gains is scheduled to revert to 20%) under current law.
The Center on Budget and Policy Priorities called Gibson's statements "seriously misleading," adding: "Cutting capital gains rates reduces revenues over the long run. That's the conclusion of the federal government's official revenue-estimating agencies, as well as outside experts and the Bush Administration's own Treasury Department."
This is what passes for a budget expert in the Republican Party: a congressman who is wrong about almost everything, almost all of the time, and who takes economics lessons not from economists, but from a television anchor who thinks the typical school teacher makes $100,000 a year. The bottom line is that Paul Ryan is a fraud. He's either a habitual liar, or he's astonishingly ignorant about his supposed area of expertise. As chair of the House Budget Committee, he's in as far over his head as Michael Brown was at FEMA.