Over the last three days, Wisconsin Republican Rep. Paul Ryan, the chairman of the House Budget Committee, has made the media rounds to promote his committee’s version of the House Republicans’ budget proposal.
On Hugh Hewitt’s radio show on Tuesday, Ryan was asked about one of his primary detractors, Nobel Prize-winning economist and New York Times columnist Paul Krugman. Ryan responded by making the case against Keynesian economics and how that type of borrowing and spending could be detrimental if interest rates go back to where they were before the 2008 fiscal crisis.
“Well, so I have three certainties in my life — death, taxes and liberal attacks from Paul Krugman,” Ryan said. “It’s something I’ve come to realize. Keynesians, which is what Krugman would call himself, believe in just, in the constant pumping of the prime, and just spending more money to grow the economy. They believe in this, that if you spend more money, it produces more than a dollar’s worth of economic growth for every dollar you spend.”
“Well, obviously, that’s not true, and there have been lots of studies debunking that,” he continued. “But more importantly, the more you rack up these deficits, the bigger your debt gets, the more out of control it gets. And if we have an interest rate problem, which is more likely the more borrowing you have, interest just balloons, and we literally lose control of our fiscal situation. We would add about $400 billion dollars in interest spending a year today, if interest rates just go back to where they were before the crisis.”
Ryan went on to call that “sugar-high economics” and emphasized that the opportunity to get away from that and avert a fiscal crisis is narrowing.
“So what we realize is we’re in this narrowing window of opportunity to get our fiscal house in order, to get our budget balanced, to get pro-growth economics,” Ryan said. “But if we keep the sugar-high economics, which is what the people you mentioned are talking about, we’ll just have a harder fall at the end of the day, and everybody will get hurt. That’s what we want to do. We want to prevent people from getting hurt, we want real economic growth, and by the way, I would argue, it’s just not really working out real well right now.”
“Our economy is barely limping along, we have 46 million people in poverty, the highest poverty rates in a generation, more and more people are giving up on the American idea, more and more people don’t think the country is going to be better off in the future when they hand it over to their kids,” he continued. “And we have put out a budget to balance the budget, to reform the tax code, to open up our energy so we can be energy independent, to save Medicare from bankruptcy, to make sure that our kids get a debt-free future and a faster economy today. That’s what we’re producing today.”