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Home Publications Blogs Beat the Press The Battle Is About Giving More Money to Rich People, Not About the Size and Role of Government

The Battle Is About Giving More Money to Rich People, Not About the Size and Role of Government

Sunday, 17 April 2011 13:12

The New York Times told readers that the battle over Representative Paul Ryan's proposal, which would redistribute tens of trillions of dollars from poor and middle class people to the wealthy is a debate over:

"the size and role of government — of the balance between personal responsibility and private markets on the one hand and public responsibility and social welfare on the other."

This is not true. Paul Ryan, who is ostensibly the proponent of small government in this story, wants the government to be able to arrest people for conducting free market transactions with prescription drugs and medical devices. In Ryan's world, the government will give certain companies patent monopolies that allow them to charge prices that are many thousand percent above the cost of production.

Ryan also has shown zero interest in opening trade for doctors and other highly paid medical professionals, which would go far towards reducing costs in the United States. Ryan also wants to deny seniors in the United States the option to buy into more efficient health care systems in other countries.

According to the Congressional Budget Office's (CBO) projections, Ryan's plan would increase the cost of providing Medicare equivalent care to seniors by $30 trillion over Medicare's 75-year planning period, an amount that is 6 times the size of the projected Social Security shortfall. This is entirely the additional cost to the country in the form of higher payments to insurers and health care providers. This does not include the cost shift from the government to beneficiaries.

It is entirely possible that strong believers in small government would prefer having the government provide health care given the enormous savings projected by CBO. The savings are equivalent of $100,000 for every man woman and child in the country. Even libertarians generally advocate having the government take responsibility in areas where large potential efficiencies exist by dealing with an issue through a centralized body.

The one unifying theme to Representative Ryan's proposal is that it redistributes a vast amount of income upward. It does not always lead to smaller government rather than bigger government.

It is understandable that proponents of redistributing income upward would try to conceal their motives by feigning an interest in small government. The prospect of a small government probably has more appeal to most citizens than the prospect of further upward redistribution of income. The NYT should not be assisting the proponents of upward redistribution in concealing their agenda.


Comments (6)Add Comment
written by Colin, April 17, 2011 3:17
Dean, are you going to comment on Geithner's interview with Christiane Amanpour regarding the debt ceiling and the dire consequences that would follow if we hit it?
Paul Ryan is Not a Fascist: He's a Benevolent Dictator
written by izzatzo, April 17, 2011 3:18
The Battle Is About Giving More Money to Rich People, Not About the Size and Role of Government.

Exactly right. Whether small or large government is used to redistribute income upwards or downwards is not the question.

Exactly wrong. Whether the role of government is to redistribute even more income upwards to the rich already saturated with obscene amounts of wealth. It would behoove Dean Baker to read Dean Baker on this one about the role of the nanny state to keep the rich rich.

This also explains why Paul Ryan wears a button that says 'I'm a Benevolent Dictator - Not a Fascist'.

Any economist knows that income redistribution as a public good is subject to market failure and must be controlled by government instead of the market to prevent exploitation.

Either fascism will prevail and use the nanny state to redistribute income upwards or a benevolent dictator must step in to distribute income according to the added value productivity maxim achieved under choice and competition among countervailing powers.

Since Paul Ryan is obviously not a fascist then he must be a benevolent dictator and an efficient one at that, given his ability to leverage the power of a government so small it will soon fit into a bathtub.
Give Ryan credit!
written by Banicki, April 17, 2011 4:08
Give Ryan Credit. He got topic out in the open

I use to own a Lionel model train and it had three rails. It could not run without the third rail that delivered the power.

The solution to fix our budget needs a third rail. We need to cut spending and raise taxes; however, we also need to free our "free markets". Our free markets have been destroyed by government allowing core industries to be taken over by a few large corporations choking off competition.

One of the primary responsibilities of government is to protect its citizens from tyranny; both, foreign and domestic.

An affect of this take-over by oligopolies is that the distribution of income in this country has been distorted. If this is corrected income disparity would shirk, less government welfare programs would be needed, we would be more innovative and tax revenues would increase.

This is not being discussed because every politician in Washington is on the take from these large corporations. America is losing it and it will take drastic action for us to get back on course. Why has this happened? More
how to find where the poor are...
written by pete, April 17, 2011 6:01
There are no poor in the united states, enuf said.
shuffling the incomes among the elite is interesting, but has no moral foundation compared to sending a $$ to a truly poor person, essentially starving.
false choices
written by diesel, April 17, 2011 8:16
Dean, the quote you lifted from the NYT article, "the size and role of government — of the balance between personal responsibility and private markets on the one hand and public responsibility and social welfare on the other." illustrates clearly why the issue is insolvable. The wrong polarities are coupled, resulting in a deadlock.

Shouldn't private markets be paired with public responsibility? And personal responsibility with social welfare? Are not markets, by their very nature public entities? And is not social welfare not everyone's personal responsibility?

It's a red herring to phrase the issue as though private markets and personal responsibility, by definition, go hand in hand. And to contrast them with public responsibility and social welfare is a false dichotomy.

Casting the issues in these terms is to buy into Ryan's brand of servile, boot-licking conservatism, and as a consequence, moderation or balance (actually abdication) presents itself as the only reasonable course of action.
Ryan's tax break for Fortunate 400
written by Vern, April 18, 2011 4:08
I just tried re-figuring the tax rate for the fortunate 400, average income $345 million. Latest figures are for 2007. They paid 16.6% then. This is already lower than an unmarried burger-flipper has to pay when you include payroll taxes.

If my calculations are right, under Ryan's proposal that rate drops to 2.1% Ryan's plan has people making $1,000,000 per day paying at the lowest tax rate in 100 years, while at the same time increasing health costs to retirees by 300%. Sounds fair. The data for the Fortunate 400 is at:


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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.