Saturday, April 23, 2011

Thoughts on the Ryan Plan

Paul Ryan (R-Wisconsin) is arguably the face of the Republican Party right now. His proposed budget is driving much of the discussion on how to deal with debt, spending, and taxes. Here is a brief summary of what it would do:

1. Bring non-defense discretionary spending to pre-2008 levels
2. Convert federal share of Medicaid into a block grant that states would have control over
3. Repeals Obamacare
4. Privatizes Medicare. Future beneficiaries will choose from a menu of private options. They won’t have the choice of the standard Medicare plan. Wealthier beneficiaries will get a small voucher and poorer beneficiaries will get a larger voucher. Vouchers grow at GDP+1%, whether or not Medicare does the same.
5. Cuts the top marginal tax rate from 35% to 25%

I want to start by giving Ryan credit. He has proposed something which has sparked debate. He has come up with real measures to reduce spending and taken considerable risk doing so. There are however two fundamental problems with his budget. First, it does not actually balance until far down the road. This is primarily because it preserves tax cuts for the wealthy and holds off on making changes to Medicare for those 55 or older. This was understandably done to make the plan an easier sell politically. But the result is that dramatic savings will not be realized in the near term.

That means the problems attendant in having such a large debt still exist. Creditors will be worried and could demand higher interest rates to invest in US debt, thereby increasing the burden of debt. In the next decade, high government borrowing could still crowd out private investment. Debt is projected to reach $16 trillion, requiring an increase in the debt ceiling that Republicans say they oppose. So, Ryan’s budget fails at its most important goal: balancing the budget and getting the debt under control.

It’s debatable whether the plan has impact in the medium term because of some assumptions the Ryan plan makes. He assumes that growth will be 3% instead of the average of 2.8%, and that we will have an unemployment rate of 4% in 2015 and a shocking 2.8% in 2021. These lower unemployment rates would of course mean more tax revenue which would help balance the budget. Of course, Ryan is not the only politician to make optimistic forecasts in budgets; Democrats do the same. Regardless, these assumptions make it hard to believe that Ryan’s plan will have the effect he says.

Furthermore, even if Ryan could balance the budget with his plan, it’s politically unrealistic. Those who are say 50 years old—right under the age Ryan proposes exempting from changes—who have planned on having Medicare for decades will be unhappy to see fewer benefits. Many will believe that they have been left in the lurch and worry that they will not be able to pay for healthcare when they retire.

So while Ryan may have mitigated political difficulties by sparing those over 55, he did not eliminate them by a longshot. At the same time, the wealthy will be paying lower taxes. Democratic campaign strategists will have a field day running ads showing millionaires paying the lowest taxes ever while insinuating that vulnerable senior citizens are not getting the help they need. Ryan will be accused, not just of balancing the budget on the backs of the poor, but on the backs of everyone who is not rich.

Ryan’s contribution is that he has made us consider fundamental changes to our social compact and challenged us to consider how expansive a welfare state we can afford over the next decades. But his plan’s shortcomings mean that while it made a good beginning to our deficit debate, it would be a poor end.

Wednesday, April 13, 2011

Thoughts on the Budget Deal

A government shutdown has been averted at least for now. Democrats and Republicans agreed on a budget that cut about $39 billion. Speaker of the House John Boehner has pledged that he will work towards cutting trillions and not billions. For his part, President Obama is readying a budget that he says will really address the deficit.

Looking at the politics of the situation, Obama has a chance to benefit greatly. The deficit is indeed a threat to America’s long term economic health. Obama could propose a plan that slows the growth of entitlement programs like Social Security and Medicare and produces real savings. The Republicans will have two unappealing options.

First, Republicans can oppose Obama’s plan while not proposing any more cuts. Republicans may choose this option because they do not want to get burned politically for making radical changes to popular programs. But if Republicans do this, they will appear cynical to independent voters and likely lose the ability to use the deficit as a cudgel against Obama with these same voters. They will also temper enthusiasm in the Republican base going forward into the elections.

Second, Republicans can try and avoid the pitfalls of the first option and keep the deficit as a major issue by proposing drastic cuts to government programs. If Republicans do this, they will be wide open to charges of extremism. They also risk alienating senior citizens—who tend to vote— who benefit from Social Security and Medicare in as an important election year comes up.

That is not to say that there are no risks for President Obama. If he accedes to meaningful cuts to Social Security and Medicare he will upset liberals who strongly support such programs. But the question then becomes how much he will truly pay for liberal Democrats being upset. Where else will they go? Paul Ryan (R-Wisconsin) has become the face of the Republican Party on the budget. Democrats have called his budget extreme and draconian. These voters will simply not support Republicans. Perhaps they will stay home. But I bet White House political strategists will end up convincing them that it is important to vote so they avoid right wing Republicans taking over government.

Sunday, April 3, 2011

Can We Be Moral Without God?

What does it mean to be moral? It would seem that most people agree on some common ideas most of the time: tell the truth, do not harm others, and help out those in need. Yet, there are two divergent schools of thought on many moral questions: deontological and consequentialist. In this post, I want to consider whether it is possible for there to be a moral framework based on duties and obligations without a God.

Atheists of course do not believe in God while deontologists evaluate moral actions based upon duties. Consequentialists believe that the most moral action in a given situation is that which produces the best consequences. For someone who believes in God, it is relatively easy to be a deontologist. The Bible, the Quran, and the Torah give out clear guidelines for duties that people have in life. An omnipotent, omniscient being is telling us what the right thing to do is.

If there is no God, then people have to decide in some way what duties and obligations there are in life. There are a couple of ways possible. First, we could decide what duties and obligations we have based upon what the majority of people want. In the same way that majorities of citizens decide which clothing is fashionable, or what our healthcare system should be like, majorities would then decide our moral duties.

The problem is that majoritarianism can produce all manner of unjust arrangements. One need only look at the majority of Southerners who supported Jim Crow laws, or the majority of Germans who approved of anti-Semitism. For every example I give here, there are probably dozens of others. Is this record particularly inspiring?

The second way would be more subject to individual interpretation. Even if the majority of citizens felt one way about morality, perhaps individuals could by themselves reason what duties and obligations they had. They would not be able to merely assert that duties exist based upon their feelings; they would have to figure their duties out through reflection and thought, and be able to prove them through argument and debate. There are a few problems though. First, many if not most people lack the time for this. They have jobs and families to support. Will they really be able to devote the time to reasoning through what their moral duties are?

Second, invoking reason gives a person ample opportunity to consider a consequentialist framework for a moral decision. If a person is busy trying to derive the moral duties he ought to live by through reason, then that same reason will cause him to consider self-interest as well as costs and benefits to a moral decision.

Indeed, reason will require that he do so since he cannot make a reasonable decision without having taken these things into account. This means that for many if not most people, concern about consequences will have a chance to also inject itself into the moral decision-making process. If this concern drives the process even a little bit, then it is difficult to envision the final decision being based entirely on duties and obligations.

Perhaps ironically given these difficulties, to believe that most people can uphold a deontological framework absent a God most of the time may require an act of faith. Of course, this does not mean it is impossible for someone who doesn't believe in God to make decisions based on duties and obligations. Perhaps most importantly, it doesn't tell us whether deontology is the right framework to evaluate moral decisisions.