Republicans must return to free-market principles

Paul Ryan, a Republican congressman from Wisconsin, believes that Republicans must return to free-market principles. The sluggish economic growth and country's burden of debt are the result of a broken federal government and Ryan believes that in November's election the US will renew its dedication to economic freedom.

By Paul Ryan
July 19, 2012 7:02 pm
Financial Times

In Washington an unfortunate habit has arisen of blaming other nations for our own shortcomings. Some people complain of “headwinds” from Europe, hectoring its leaders about debt and job creation instead of solving our own problems. But an open global economy doesn’t render nations helpless. It allows those with pro-growth economic policies to prosper and to become models of success.

The highest barrier to a new economic boom is the defeatism of those seeking to manage the west’s decline. Millions of Europeans and Americans alike are now enduring the painful consequences of empty promises becoming broken promises, after politicians pushed government spending and debt to unsustainable levels and spread cronyism instead of entrepreneurial dynamism.

In November Americans will choose between two visions of our future. If we make the right choice, it is not too late to chart a course to renewed prosperity. If we make the wrong choice, the US will succumb to European sclerosis, with painful consequences for the free world.

Sluggish economic growth and our crushing burden of debt are the result of a broken federal government. Washington has a critical role in defending our natural rights, keeping the US safe and promoting opportunity for all, particularly society’s most vulnerable. Yet both political parties – for years – have pushed government beyond its core functions, increasing spending to unsustainable levels.

Repeated rounds of incomplete quick fixes will only guarantee that the US enters its own lost decade or even a lost generation. Structural reforms that convincingly reduce debt and ignite growth are what we need to prevent those outcomes.

We must restructure the 20th-century entitlement state so important programmes can succeed well into the 21st century. Government spending on healthcare, especially Medicare, is the largest driver of future debt. I see an emerging bipartisan consensus for reforms that guarantee the protections government promised senior citizens throughout their working years. President Barack Obama’s healthcare law goes in the opposite direction, empowering a newly created board of 15 “experts” to cut Medicare through arbitrary price controls for providers that will result in restricted access for senior citizens.

Instead of putting 15 bureaucrats in charge, our reforms empower senior citizens to control their healthcare decisions. Our reforms make no changes for those in or near retirement. Future generations would get a support payment to choose a Medicare plan that works for them, with less support for the wealthy and more for those with lower incomes and poor health.

With similar improvements in other entitlement programmes, the structural drivers of debt would be reformed to increase savings and reduce borrowing, thereby ensuring government programmes can sustainably deliver on their promise, preventing a debt explosion.

Unwilling to address the structure of government spending, Mr Obama is committed to raising taxes. A better approach would be to overhaul the US tax code to make it fair, simple and competitive. Reform should lower tax rates across the board and close special-interest loopholes that go primarily to the well-off. This would encourage equal opportunities for all and allow those on the lower rungs of the ladder the opportunity to rise.

Both political parties have fallen victim to “partnership” with large and well-connected companies, especially in energy, housing, finance and healthcare. Republicans have been guilty of confusing our pro-market principles with pro-entrenched business policies.

The protection of big business remains a common thread in Mr Obama’s policies, which have come at the expense of the consumer, the taxpayer and the entrepreneur. A growing coalition of reformers – rooted in citizen movements across the political spectrum – reject this pernicious crony capitalism. Our solutions promote an opportunity society, one that is rooted in the US commitment to free enterprise.

Government should promote expanded opportunities, not force equal outcomes. Free enterprise is about more than material riches. It incorporates moral truths about personal dignity, equal opportunity, job security, ending poverty and dependency, increasing upward mobility, and taking responsibility for self and family. The Republican party has recommitted itself to these principles and promoted ideas that meet the magnitude of continued economic hardships and real anxiety about the future. Advanced with clarity and conviction, our reforms are reassuring precisely because they are so bold.

In November’s election I believe the US will renew its dedication to economic freedom and reach a proper understanding of the role of government. In doing so, we will not just promote our prosperity, we will ignite an economic boom to spread opportunity around the world.

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