Paul Ryan (R-Wisc.) replied to Obama's State of the Union speech and couldn't even get right the difference between the causes of the Greek and Irish financial crises.
As we behold the hypocritical Tea Baggers and their enablers bellowing to reduce the federal deficit and offering prescriptions, we need to stand back and query their qualifications to assert anything on economics. Two blogs ago I showed why Michelle Bachmann's Tea Party prescription is bollocks, now I will do the same in respect of Pau Ryan's response to Obama's State of the Union address.
As TV-viewers may recall, Ryan occupied the slot that Bobby Jindahl did last time. So we were entertained by another smug little clown with pretensions to knowledge and insight who doesn't know diddly. In an earlier blog:
http://brane-space.blogspot.com/2011/01/keeping-baying-austerity-hounds-at-bay.html
I noted Ryan's quote on the failure to cut deficits, in an issue of The Financial Times even before he took center stage in his response to the SOTU:
"We will have the riots in the streets. We will have the defaults. We will have all of those ugliness problems, like those French kids lobbing Molotov cocktails at cars, burning down schools because the French retirement age was moved from 60 to 62"
But what amazes me is how little thought these screech monkeys invest in what they're really asking - for example, when they demand the retirement age be raised to 70 for Americans. Have they really processed the economic costs? I doubt it!
If indeed the average senior is forced to postpone full retirement for an additional four years, that will add (conservatively) some 12 million oldsters competing with the young for jobs! If even now newly minted college grads can't get jobs, how do Ryan and his cronies think they will competing with 12 million folks over 65-66?
And make no mistake, as more of the high profile - better benefit jobs are farmed out(to India, China), all the ones left (several notches lower in pay and benefits) will be fought over by an increasing number of people - and this is even if Americans are smart enough to stop reproducing! (As of now, an additional 125,000 jobs is needed each month merely to keep pace with expanding population - and we're still in a reproductive "down trend"!)
Given this, it makes far more sense to keep the system as it is, let those seniors who want to retire do so with full Social Security benefits at 66- and thereby ensure less competition for a dwindling number of decent (non-agriculture, minimum wage) jobs among the young. In addition, those seniors thereby retired will be spending money thereby priming and pumping the economy - using it for groceries, eating out (tips for wait staff), mortgages, and maybe even travel. The young dude meanwhile won't have to compete with Gramps for that new Best Buy job.
Ryan's other screwed up notion, offering a "voucher" for Medicare services, is something tailor made to fuel massive social unrest if ever passed. And by that I mean unrest that probably rivals what we behold in Cairo and Alexandria right now. Does anyone in the Repuke party really want those scenes played out on TV for the next hobnob event of the Overclass elites (and their 20-odd theological enablers) at Davos?
Nope, didn't think so!
Another howler made by Ryan, in his actual SOTU reply went:
"Just take a look at what's happening to Greece, Ireland and the United Kingdom and other nations in Europe. They didn't act soon enough and now their governments have been forced to impose painful austerity measures: large benefits cuts to seniors and huge tax increases on everybody".
Here, Ryan displays his ignorance by conflating the source causes of the Greek, Irish and UK examples.
The Greek style of debt crisis I already dealt with in a previous blog last year:
http://brane-space.blogspot.com/2010/05/will-barbados-fall-to-sovereign-debt.html
Therein, I observed:
"in the case of the sovereign debt crisis, nations – not banks- are on the verge of default and are seeing their national bond ratings plummet because their debts are too high in relation to their gross domestic product (GDP). The most recent victim was Greece, which finally received a $140 billion (U.S.) bailout (in the form of loans mainly through the eurozone and IMF) but at horrific cost. The Greeks now face massive public cuts – with layoffs to their public sector and the slicing of public pensions along with increased retirement ages. Many public projects also stand to be cancelled, wages cut, and taxes raised. No wonder they’re rioting in the streets."
The Greek situation developed precisely because it allowed its public sector to grow overly much at the expense of its private. By three months before the bond ratings changes, nearly 1 of every 2 jobs in Greece was somewhere in the official government bureacracy compared with barely 1 in 25 jobs in the U.S. Moreover, enabling anything to be done - say even to obtain a birth certificate copy, or pave a new road or lay a pipe - often required paybacks and favors to the bureacrats!
Worse, its pension scheme was way too generous, allowing retiring Greeks (most at age 55 or less) to receive nearly 60% of their original pay.
The whole Greek system was one waiting for collapse and the degraded bond ratings from Moody's and Standard & Poor's provided it.
The Irish case was 180 degrees different! Indeed, one of the top conservative think tanks, The Heritage Foundation, ranked Ireland (in its Index of Economic Freedom) highest of any Weestern nation based on its low taxation, low public spending regime. This was actually merited, given that for the 2006-07 fiscal year Ireland had one of the lowest debt levels in the developed world while running a budget surplus.
So what happened?
Well, the Irish let their banks get out of control and run wild. Using their own credit default swaps these banks created a mammoth property bubble which could no more be sustained than the U.S. subprime mortgage bubble. The proveribial shit hit the fan, the deficit soared and public debt exploded because the Irish government was saddled with bank debts. It was either take over those bank debts or let the banks fail - not an option when one recalls bank failures led to the Great Depression.
So the cause of Ireland's austerity was totally different from Greece's.
Then there was the UK under its conservative (Tory) Prime Minister, David Cameron. A few months ago Cameron promised spending cuts because the UK was "living too high off the hog" and he also promised the markets would rejoice and all would be well with increased economic growth as a result.
How wrong he was! Britain actually found itself further ensnared in a debt crisis. According to Financial Times columnist Martin Wolf ('A Warning Shot for the British Experiment', Jan. 28, p. 13) there was "no robust recovery that justified the government's rapid retrenchment" and "output fell by nearly 0.5% from the previous quarter".
In other words, applying the same sort of formula for spending cuts advocated for the U.S. (by Republicans) the UK has dug itself further into an economic hole- which can even possibly usher in a new recession.
Is THIS what Ryan wants?
The fact this imbecile cannot even discriminate between the causes of the assorted debt crises shows he's not competent enough to offer economic advice or admonitions, to anyone.
Americans need to take this fool with a grain of salt, just like Michelle Bachman and her Tea Bagger morons!
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