By choosing Paul Ryan to be his running mate, Mitt Romney has ensured that a “far-reaching debate about the broader role of government and the entitlement state,” in the words of Politico’s instant analysis, will dominate the final, decisive twelve weeks of the presidential campaign. The long-term budget plans that Representative Ryan has advanced in recent years will be scrutinized, attacked, and praised. Ryan is invariably portrayed as the GOP’s wonkiest politician — these arguments will often sound like the panel discussions most Americans put up with for entire nanoseconds before channel-surfing past C-SPAN. A strange election will get stranger if it turns on voters’ decisions about whether “premium support” for Medicare is or isn’t a voucher.
Amid all this arcana, we must not lose sight of two main functions of Ryanism, now the core of Republicanism after being endorsed by the GOP’s congressional caucus and presidential nominee. First, Ryanism reminds the American people that a long-term trend is not the same thing as a law of nature. That the welfare state always has grown does not mean it always must grow. Indeed, a well-designed and well-administered welfare state can, in a welcome sense, grow and shrink at the same time. Second, Ryanism challenges the Democrats to finally come clean, 80 years after launching the New Deal, about the cost and consequences of their ambitions.
The first thing to keep in mind about Ryanism is how it changes the long-term trajectory of American spending and governance. The New Republic’s Jonathan Cohn sketched the ghost-of-Christmas-future dystopia he envisions if we adopt the Ryan framework: “Ryan’s most recent budget would, by 2050, shrink spending in everything but the big entitlements (Social Security and government health insurance programs) and interest on the debt to less than 4 percent of gross domestic product. To give you a sense of scale, spending outside those entitlements and interest now represents more than 12 percent of GDP and has never, since World War II, represented 8 percent.”
The proposition that all men are created equal does not, however, establish that all GDP percentage points are created equal. Over time they grow, with the help of luck, prudence, and exertion. As nations become more prosperous, things they couldn’t afford become things they can afford.
Consider the 1980s. Federal spending on the welfare state — Social Security and all other income-support programs, Medicare and all other health programs, and all programs in education, job training, and social services — was, according to the Office of Management and Budget, 9.8 percent higher, adjusted for inflation and population growth, when Ronald Reagan left Washington in 1989 than it was when he was elected president. This might be construed as evidence of conservatism’s futility: America’s basic political argument apparently pits fast and enthusiastic Swedenizers against slow, reluctant Swedenizers.
Note, however, that real per capita GDP increased by 22.1 percent during Reagan’s eight years in the White House. Spending on welfare-state programs declined from 50 percent of federal outlays in 1981 to 47.1 percent in 1989. More important, it declined from 11.1 percent of GDP to 10 percent. That sounds like a rounding error, but it means that federal welfare-state spending, relative to GDP, was nearly a tenth lower at the end of Reagan’s presidency than at the beginning. Conservatives may regret that the reduction wasn’t a fifth or a fourth, of course, but to interpret the 1980s’ increase in per capita welfare-state spending as a defeat requires begrudging that decade’s economic growth. Under Reagan, the economic pie grew, and the slice devoted to the welfare state got proportionately smaller.
America, like most modern nations, has used economic growth to enable government growth, especially in the form of a bigger welfare state. For example, total (federal, state, and local) government spending increased from 26.5 percent of GDP in 1965, at the dawn of the Great Society, to 32.6 percent in 2008, at the beginning of the Great Recession. One of the drawbacks of measuring government spending in GDP percentage points is that no government or society ever has more than 100 of them at its disposal. So it’s hard to be sanguine about this 6.1 percent decline in the portion of the nation’s economic output not accounted for by government spending: That trend can’t continue forever.
But it can continue for a while, especially in a growing economy. Adjusted for inflation and population growth, the portion of GDP not accounted for by government spending was 2.2 times higher in 2008 than in 1965. This made it easier for Americans to allocate a growing portion of their growing economy to government spending.
At some point, however, a society may decide that there are economic or political reasons to stop treating the eternal growth of government’s footprint on GDP as the default option. Paul Ryan’s implicit message is that it’s legitimate for a democracy to conclude that a growing economy can facilitate a smaller government as well as a larger one. Moreover, the Reagan precedent shows that economic growth permits us to increase government spending while reducing the government’s claim on our total economic output. It’s especially sensible to expect and arrange for welfare-state programs to decline relative to a growing economy. Prosperity allows us to spend more, in absolute terms, to help the people who need it, while expanding opportunities should mean that fewer and fewer people truly do need help. To insist on the opposite approach would mean that no advances in prosperity would ever discharge the moral obligation to expand the portion of our national output devoted to government programs.
The second feature of Ryanism challenges Democrats to acknowledge the cost of their ambitions. In nations around the world, political parties on the left have won victories by promising people that enlightened, compassionate government would give things to them and do things for them. That sales pitch will be effective as long as Santa Claus is not a villain.