Mitt Romney’s selection of Paul Ryan has changed the focus
of the election and put “The Issue” front and center.
You may think The Issue is the economy. Mitt Romney has been campaigning all
along as though it is, but it is not.
The interesting conundrum of the economic argument is that wherever the
economy is weakest, Obama is strongest.
The States with the weakest economies are all solid Obama wins according
to the polls. The groups with the
worst economic performance are all solid Democrat
supporters. The cities with dying
industries, dying downtowns, dismal economies and crumbling finances are
largely Democrat run and Democrat leaning. When Obama says “Our plan worked!” he may be referring to
this apparent conundrum; the weakened economy has actually strengthened his
support among his base.
You may think The Issue is jobs. Republicans talk an awful lot about jobs, but here again,
high unemployment does not appear to help them. As with the economy, states and groups with the highest
unemployment are all solid Obama territory. More evidence his plan is working.
To make a long story short, The Issue is not the
deficit, nor healthcare, nor national security, nor is it energy, even though
all those will play a role in the upcoming debate. The reason Obama is strong in all those areas with high
unemployment and dismal economic performance is because he has greatly
increased federal hand-outs. Jobs
and economic growth are superfluous when the government gives you
everything. Not only did we
have an existing mess in entitlements, Obama has made it much worse. The Issue is entitlements.
We could shut down the entire federal government and still
not be able to afford our entitlements. Shut the military, the courts, all the government agencies,
the FBI, CIA, NASA, EPA, DOT, the Senate, the House, and everything else except
the existing entitlements and interest, and we’d still be insolvent in a matter
of years. In other words, we are
living off our kid’s money.
Romney/Ryan believe that our thirst for entitlements constitutes an
immoral claim on the labor of others. They have a strong case.
Now for the boring numbers part (skip to "Conclusion" if you are
ADD/ADHD):
·
Tax revenue has averaged almost exactly 18% of GDP for
60 years. During that time, rates
have been all over the place for every type of federal tax, but never has
federal revenue sustained a long period above or below that 18% level. Tax revenue is self regulating and
fixed over time at 18% of GDP. Taxing "The Rich" cannot solve this. (top graph)
·
Meanwhile, entitlements alone plus interest on the debt
will bankrupt us. (bottom chart)
*Source: Heritage Foundation
Conclusion:
Every time a politician has tried to even start a
conversation about entitlements they have been quickly shouted down, sometimes
by their own party. The reason
this is so is that we’ve had a kind of immunity from having to deal with
entitlements and deficits.
We alone can print the world’s reserve currency. We alone can issue US Treasuries. And we alone can lead the world on
interest rates. This unique
position has allowed us to live beyond our means without repercussions. Our trading
partners and financiers keep writing us the equivalent of second, third, and
fourth mortgages on our debt while allowing us to refinance at historically low
rates. If only this could go
on forever.
But it can’t, and it is irresponsible and immoral to pretend
otherwise as Obama has. This is where
Romney/Ryan come in.
Romney/Ryan are the first modern ticket focusing on The
Issue during a campaign. They are
both articulate, informed, accomplished, and serious. We’ll see if the public is ready to hear their message. I sincerely hope it goes better than
last time around. You see, once
upon a time we had another Presidential ticket which spoke frankly about
entitlements. They too were
concerned with an entitlement that amounted to an immoral claim on the labor of
others. Their names were Abraham
Lincoln and Hannibal Hamlin.
