Ezra Klein wrote a smart post yesterday detailing what he terms “unrealistic assumptions” lurking in Paul Ryan’s budget proposal. Calling them assumptions seems like a mistake to me. Ryan is offering a policy proposal. To assume the proposal will pass into law is unrealistic as such, but if it did pass the law of the land would be what it is. The key thing here is that under Ryan’s plan the entire nonmilitary non-Social Security non-Medicare non-Medicaid federal government would have to get by on 3.75 percent of GDP. That’s not an “assumption” it would be, rather, a legislative requirement that’s binding on federal appropriators.
Ryan hasn’t said exactly how much of that 3.75 percent he thinks should go to the military, but he has said that he wants to see the military spend more than the Obama administration has proposed, defense spending has never fallen below 3 percent of GDP in the modern era, and Mitt Romney’s campaign is calling for 4 percent of GDP to be spent on the military. It’s also worth noting that there’s an array of military spending related to nuclear weapons stashed in the Department of Energy’s budget. The upshot is that to meet the spending caps consistent with Ryan’s views on the appropriate level of military spending would require us to completely dismantle the rest of the federal government. You could probably keep the main federal law enforcement agencies up and running so we wouldn’t have totally unguarded borders, no personal protection for the president, convicted felons running loose in the streets, etc. But keeping the lights on at the FBI and so forth would mean the end of everything else. No food stamps, no highway construction, no aid to low-income school districts, no foreign aid, no nothing.
That’s not politically realistic, but it’s not inherently unworkable. It’s a vision of a return to an old-school much more federalist United States in which the federal government has few if any nonmilitary functions and social welfare and basic infrastructure are provided for by state governments. Since state governments will have a higher cost of funds than the federal government they’ll probably structurally underinvest in basic infrastructure, and the macroeconomy will be destabilized by the wildly pro-cyclical budgeting that decentralized social welfare provision will imply. That said, the macroeconomic chaos that would be unleashed by Ryan’s approach to budgeting pales in comparison to the consequences of his monetary policy ideas so I’m not sure this would be that big a deal. My point is that the 10th Amendment and federalism are things we’ve heard conservatives talk about for a long time, and here’s a budget that encapsulates those ideas.