Friday, April 6, 2012

The Path to Prosperity... But Whose?

Paul Ryan has presented in Congress what he calls “The Path to Prosperity: A Blueprint for American Renewal.” This Budget Report has been in the news too much lately, which piqued my curiosity to know what exactly was in it. As most of us do, I tend to listen to what others have to say and I confess that at times, I am too lazy to do my own research. Having Medicare and Medicaid jeopardized by this proposal, I overcame my apathy and decided to read it and scrutinize it myself to reach my own conclusions. I don’t expect everyone to agree with me, after all this is a public blog and all views are welcome, but ultimately it is mine and I always say things as I see them if you don’t like it, move on.

Anyone who reads this report lightly and without giving it too much thought or analyzing the significance of what is being proposed, would think that he is presenting a great remedy for what ails our economy today. Nothing could be further from the truth.

The tax reforms Mr. Ryan is proposing, will mostly affect the lower income families. He is proposing a maximum cap of 25 percent for those that make an obscene amount of money, including the new “people” on the block: Corporations. The rest of us, which are the ones being over-taxed and practically sustaining this economy, will pay 10 percent across the board. This approach doesn’t sound too bad, except that his proposal still includes and “improves” incentives for the "job creators" and we all know what that really means. Corporations will still be getting large sums of money in the form of tax breaks for them to honor us by giving us a job, usually at minimum wage and at times not even a full-time position (avoiding having to offer us health benefits.) Basically these companies will be getting cheap labor, which at times and thanks to the “incentives” these workers wages will be paid by the working class in the form of taxes paid, which in turn the government will pay the Corporations to hire new workers, and the vicious cycle keeps repeating itself. It is sickening!

In this report, Ryan also proposes an Energy reform, which not surprisingly, offers to lift all precautionary regulations. He is proposing to remove the Environmental Protection Agency and allow the private sector to develop sources of “American-made” energy. We have seen how "responsible" the private sector is when it comes to the environment and safety. It is well known that when it comes to the environment and safety, if unregulated, corporations will be more interested in saving money and how much profit they can make if they overlook the impact their projects will have on the environment and safety. I cannot say that all corporations behave this way, but sadly, most of them do. They must be regulated.

As we have grown accustomed to by now the GOP, and in particular in this report, Ryan is proposing to get rid of the National Labor Relations Act. It is no secret that Republicans despise Labor Unions, and we should not be surprised that they keep attempting to remove any representation that workers have to fight the injustices perpetrated by the freshly introduced “people” in this nation. In Ryan’s own words “Because a majority of union members in the United States now works for the public sector, organized labor has become an increasingly powerful force on behalf of bigger government and higher taxes. Policymakers must make sure America has a public sector that works for the people it serves – not the other way around.” The question I have is, since corporations are now people, when he refers to “a public sector that works for the people” which people is he referring to, the workers or the corporations?

In the same breath, he continues to mention all the benefits that will entail getting rid of the NLRA, which according to him will increase revenues and fees by lifting moratoriums and bans on energy supplies, again claiming that the energy corporations (oil companies) are environmentally responsible. I wonder what planet Mr. Ryan lives on!

Mr. Ryan didn’t overlook protecting the banking giants either. Wall Street and the financial companies will also see a protection from this “reform.” This path to prosperity ensures that the financial institutions will be free to do whatever they want once more and help them get rid of the government ‘micromanagement’ which has impede their rapid growth. He closes this section with these words: “to ensure that the costs to the private sector and to the taxpayer do not outweigh their benefits, and that regulations are both essential and not unduly burdensome.” If this passes, we will be back to building a castle from a deck of cards!

There is one section of this report that I kind of agree with, that is if my understanding of it is correct. Mr. Ryan proposes a freeze in the federal workforce for the next three years, I am not necessarily pleased with that but, if what follows is true, then I am all for it: “The federal government’s responsibilities require a strong federal workforce. Federal workers deserve to be compensated equitably for their important work, but their pay levels, pay increases and fringe benefits should be reformed to better align with those of their private-sector counterparts.“ Ryan goes on saying that "Immune from the effects of the recession, federal workers have received regular salary bumps regardless of productivity or economic realities." As far as I know, Congressmen and women ARE Federal employees and this means that they will lower their own salaries and hopefully their raises will be based on merit, which it's long overdue. Of course, I know he is referring to the ‘lower class’ Federal workers and not the fat cats sitting in Congress but if this portion goes through, we can demand the same be applied to them.

The farmers did not escaped unharmed on this “path to prosperity.” The report proposes to reduce the help that farmers receive from the government. While we know that there are giants in the farming industry that really do not deserve a hand from the government and yet they take it, we also know that many family owned farms do need help or they will be overtaken by the giants. We need to help our farmers, the ones that are struggling to continue to supply us with fresh and organic vegetables and grains. These farmers are just beginning to make a positive impact in our health and they deserve any help they can get, otherwise we will continue ingesting GM foods, and there would be only one winner, Monsanto.

We all know that most crops are solely dependent on Mother Nature. We have seen what drought, hurricanes, tornadoes, cold weather, floods and natural disasters can do to crops. Well, Ryan is proposing that the government stops the crop insurance offered to farmers, making a farmer responsible for “management risks” as other businesses do. The difference between a farmer and, for example, a banker is that the farmer cannot control nature; the banker can control the market.

What brought me to read the report in the first place was the healthcare, Medicare and Medicaid reforms. According to Ryan, the current system that we have is displacing “the family, civic and religious institutions that serve communities across the nation.” Really, how? The only thing that comes to mind is the now infamous contraceptives and the 'right" for a religious institution to tell a woman that no contraceptives will be included in her insurance because what goes against the views of the employer supersedes the right of any woman.  This report gives an institution more rights than a human being.

After reading the section in its entirety, and you can do the same by following the link I’ve provided, I concluded that what its being proposed – regarding Medicare and Medicaid – is simply what has been proposed so many times before: privatization of these services. The report is proposing that the government with a voucher or check will cover your private insurance premiums. If the person selects a coverage that is higher than the value of the voucher, he or she will have to assume the difference. If you choose a lower coverage, then you will get a check from the government for the difference. The people that have money will be able to afford better plans and those that don’t will have to accept the less desirable insurance. It’s like having a PPO or a HMO, simple.

Mr. Ryan ensures that under this reform, insurance companies will not be able to deny services or increase their premiums for pre-existing conditions. I believe that has been taken care of by President Obama’s Healthcare Reform.

Mr. Ryan ends his report by giving praise to the Republican Party’s god: Ronald Reagan and his Reaganomics: "In 1981, President Ronald Reagan inherited a stagnant economy and a tax code that featured 16 brackets, with a top rate of 70 percent.  When he left office in 1989, the tax code had been simplified down to just three brackets, with a top rate of 28 percent.  Reagan's major tax reforms, enacted with bipartisan support without raising taxes, proved to be a cornerstone of the unprecedented economic boom that occurred in the decade during his presidency and continued in the decade that followed.

While it is true that Reagan inherited a “stagnant economy” this was primarily due to the global oil crisis that resulted from the turmoil in Iran. In 1979, as a consequence of massive protests and the imminent threat of a civil war, the Shah Mohammad Reza Pahlavi fled Iran and the Ayatollah Khomeini took over of the country. This event inflicted a significant impact on the production of oil and the global economy.

Reaganomics, according to Wikipedia, consisted of four simple pillars: Reduction of government spending; reduction of income tax and capital gain tax; reduction of economic regulations and control of the money supply to reduce inflation. That’s it. While it sounds perfect and we are all for “reductions” it is far from perfect, no matter how much the Republicans try to sanctify it, it is still bad economics.

During the eight years that Reagan was president, he single-handedly managed to raise our national debt from $997 billion to $2.85 trillion. Thanks to Reaganomics, the United States shifted from being the largest international creditor to being the largest debtor, but you will never hear a Republican say that.

The same can be said about spending. Reagan’s GDP from 1981-1988 averaged 22.4%, 1.8% above the highest GDP from 1971 to 2009; public debt also saw a staggering increase during the Reagan's years, from 26% GDP when he took office to a whopping 41% (from $712 billion to $2,052 billion) by the end of his second term. Reagan holds the honor of being the only president who didn’t increase the minimum wage.

Reagan was not a man for the working class or the poor. If anyone thinks differently they hold the man in a very different light than he deserves.  In an interview Reagan gave to the New York Times by the end of his second term, he was asked about the homeless problem facing the nation, his response should be enough to know that while Reagan had charisma, his heart was as dark as his artificially colored hair. His reply to that question was: “[the homeless] make it their own choice for staying out there."

That statement personifies the core values of the Republican Party and we are foolish if we think that they could ever have a heart.

To see the names of the Congressmen and women supporting this proposal, click here.
Edited by J. Schapiro


  1. Great comments on the Ryan plan, and he just scares the SH** out of me, and if you are middle class, do not shoot yourself in the foot by being fooled by these "speaking out of both sides of their mouths" Congressmen...This new Tea Party Congress does not represent the majority of Americans, but have learned ways to twist and trample on what their true motives are, and deceive ordinary Americans that it is BIG GOVERNMENT, their new talking bullet point. Ironically, it is what they want to have complete control of, with enormous wealth backing them....Does that sound trustworthy to anyone with a mind for any sort of reasoning ability? Do not let these extreme people in Congress contribute to creating a 3rd world country by destroying the middle class, and true American values. These are the mega rich, who are well versed, and practiced at fooling the very people who need the most protection against this new extreme right wing. Be mindful. Mary

  2. Thank you for your comments! People have to inform themselves and stop following blindly what politicians tell them (all of them, regardless of party) or what they hear in FoxNews (which is anything but "news") and take advantage of the opportunity we all have to access unbiased information online. We can still read or watch the news, but we must do our own research or we are at risk of being misled by those that know the tricks of the trade.

  3. Hi Independent Thinker... Thanks for taking the time to read and digest Ryan's plan. I agree with you, of course, and I wish that the people who NEED to read this article and others like it would actually read it.

    You are so right in pointing out that "Big Government" has been used as a whipping boy and a lightning rod for the TPers, Republicans, and assorted conservatives out there. Let's not forget why: The purpose of a corporation is to make money for its owners and investors. They have no obligation to do any good for the public. Therefore, the ONLY ENTITY who can intercede on behalf of consumers, workers, the environment, and the public at large is the Government. (The free market can help to an extent, as can moral leadership, but ultimately, that is not enough.) That, to me, is the most important function of the government in a capitalist economy, particularly a system with massive corporations and oligopolistic capitalist economy, such as ours: To represent the consumers, workers, and the public interest at large against the profit motive of the corporations.

  4. Thank you Molly, I agree with your opinions.