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Many folks were surprised last night as rumors began leaking that Romney tapped Paul Ryan of Wisconsin, for the prestigious VP slot.  The surprise came largely because many were expecting a more mundane pick like Tim Pawlenty or Rob Portman.  The reactions from the GOP base is positive overall, although the story is still fresh and drawing conclusions is difficult.  The reactions from the Democrat/Liberal base are predictable and I am guessing that the Obama campaign is licking its lips over the prospect of skewering Ryan like a kabob.   I have a slightly different take, my feeling is that this pick is an indication that the Romney team is struggling and sees the prospect of winning in November diminishing with each passing day. People like Pawlenty and Portman is the equivalent of swinging for a base hit - the selection of Ryan is swinging for the fences.  It is desperation and an attempt to shake things up substantially in the hopes of energizing a splintered and unimpressed Conservative base.

However I prefer to focus on the economics of politics, not the politics of politics - so lets take a look at what exactly makes Ryan such a risk.

Paul Ryan, to be sure, is an impressive politician.  He has a perfect pedigree, is good looking and probably considered to be the premier fiscal wonk of the Republican party.  His budget is considered by many to be the boldest and most courageous attempt at tackling America's most pressing issues, entitlements.  Of course there is always more than the shiny facade pimped by party loyalists and for those that have bothered to investigate Ryan's record the picture becomes a bit murkier.

For starters there is the very pressing and disturbing votes of the Bush legacy.  Specifically Ryan's support of:  TARP, Medicare Part D and No Child Left Behind (NCLB).  All three are wonderful examples of how the Republican party only fights for fiscal sanity when they are a minority party, the second they become the majority they expand Government programs at an alarming rate.  NCLB is a monstrosity that gave the Department of Education teeth, Medicare Part D tacked on hundreds of billions (half a trillion as of today per year) to the debt and was passed in the House in a manner very reminiscent to ObamaCare and TARP is an egregious disregard of the free market system and should make any citizen sick to their stomach.   While Ryan may be able to justify all these votes, there are Republicans in the House who did *not* vote for these programs and quite a handful.

Then of course there is the famous Ryan budget.  A budget that reminds of me the great Oz.  It is daunting and impressive, but if you look behind the curtain there is a tiny little man pulling a whole lot of levers.  This very budget (despite being all bark and no bite) was used to galvanize Obama and the liberal base.  Remember how Ryan's policies inspired the idea that he would throw grandma off the cliff?  Yet despite the proven record of the Left to make a mountain of a molehill team Romney decided to go all-in and select Paul Ryan.  More importantly, for what?

In order to understand that Ryan's budget is nothing more than smoke and mirrors we turn to a detailed analysis of the budget.  This interactive analysis lets  you compare and contrast the Ryan and Obama budgets side by side and examine the projects for spending.   Below is a series of images I selected, but I encourage to explore the interactive tool yourself.

Let us take a look:




First we got Medicaid.  Clearly the difference is notable and appreciable.  In fact based on this image alone it would almost invalidate all my criticism of the Ryan budget.  Medicaid is pure welfare, as opposed to Medicare that is at least partially funded by FICA.  Medicaid was always intended to take care of the downtrodden and unfortunate and has now ballooned into health care for all.   ObamaCare functions and survives primarily on expanding the Medicaid rolls by shoving more people onto the public dime.  Medicaid alone is now responsible for a quarter of many State budgets and continues to financially drain the Federal and State coffers at an alarming rate.  Worst of all, it badly distorts the insurance market driving medical prices up for every single individual.  So it is nice to see Paul Ryan tackle this egregious and disgusting program that does far more harm than good, but the courage and bravery amount to a spending freeze.  By 2021 will be spending more on Medicaid again.  Perhaps Ryan tackles the other entitlement programs better?



Next we have Medicare.  What's this?  Apparently Grandma is not going off a cliff, instead it would appear that she is being pushed up a hill!  Ryan's plan spends MORE on Medicare than Obama.  This is quite the shock considering that Ryan's plan is considered to be the most courageous entitlement reform evah!   It is ironic that Obama and the Left are painting Ryan as the grim reaper chasing your granny, where instead he is slowing down Medicaid to HELP granny.  Oh, you have to love politics - don't you?




Next up is Social Security.  No, it is not a graphical glitch.  Ryan's plan does absolutely nothing for Social Security.  Yet conservative websites and pundits swoon over Ryan like he is the next coming of Barry Goldwater, more on that later.


Lastly, the national debt.  This is probably not surprising, but after all the hoopla and all the bravado the end result is that the speed at which our fiscal apocalypse arrives is merely slowed down by a teeny weeny bit.  Yet one would think that as grandma flies off the cliff with her belongings and rusty wheelchair bouncing off the jagged rocks that America is about to embark on the greatest age of austerity ever devised.

Not really.  We have a budget from an individual who thought there was nothing wrong in forking over a blank check to Wall St, nothing wrong with expanding Medicare by half a trillion and nothing wrong with growing a department that Reagan's campaign promised to eliminate.  We sure have come a long way, have we not?

Conclusion

So this of course begs the question, why did Romney do this?  Why select a VP that will provide such easy ammunition for the Left with virtually no reward?  The answer is quite simple.  Romney and Ryan represent exactly the same problem even if one appears to be a moderate and the other appears to be an epic fiscal warrior.  The Republican party fights for and pushes through the status-quo.  The images you see up above and the Ryan record is the status-quo.  No doubt about it.

Yet Romney is counting on the ignorance of Republican base to run with the facade of Ryan's conservatism.  If that illusion holds then Ryan's image will invariably boost Romney's own image as many will view Romney's decision as courageous and bold despite Obama's willingness to distort Ryan's budget.  In other words, you are witnessing a most fantastic and glamorous circus.  A bad Hollywood movie, except that ending will be quite real and not something you can pause or turn off.

However we all know what happens when politicians threaten the sacred cows of entitlement spending.  They get destroyed.  Barry Goldwater was America's last libertarian-Republican candidate and he was obliterated because he dared to speak up against Social Security.  Barry's loss paved the way for the great society and the invention of Medicare and Medicaid.  How ironic.  Poll after poll shows that Americans refuse to accept changes to entitlement programs, despite their clamoring for someone to fix our debt.

Romney and Ryan will lose in November and the image of the heartless Conservative killing granny will resonate with America, the tragedy of course is that neither Ryan or Romney are willing to actually cut anything!  The tragedy will become even more amusing as we will witness a nasty and partisan fight further dividing Americans as they fight and defend differing policies with the exact same results.

Romney's campaign is ignoring the lessons of Barry Goldwater and going all-in on an individual that has consistently voted for awful legislation and whose budget is nothing more than smoke and mirrors.  A move that can be summarized in one word:  desperation.




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"It is no crime to be ignorant of economics, which is, after all, a specialized discipline and one that most people consider to be a ‘dismal science.’ But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance.” - M. Rothbard