Paul Ryan on Europe

Compared to Ryan's budgets, Cameron's coalition looks positively profligate.

As a congressman, Paul Ryan hasn't turned his gaze overseas all that often. He is far too busy focusing on important domestic issues like changing the taxation on arrow shafts from a 12.5 per cent of sales to a 39¢ flat tax to spend time worrying about the Old World.

But he has made two notable, on-the-record, contributions to debates happening on this side of the pond.

The first was in 2009, when he co-authored a Wall Street Journal article about the perils of socialised medicine.

The piece, titled Beware of the Big-Government Tipping Point, was published in January 2009, the day before Barack Obama was sworn in as president, and is a strongly worded attack on the then-nascent idea of Obamacare.

In the piece, Ryan touches on the NHS, arguing that:

We need only look to Great Britain and elsewhere to see the effects of socialized health care on the broader economy. Once a large number of citizens get their health care from the state, it dramatically alters their attachment to government.

This line has been ramped up in the re-reporting of it, becoming a "savaging" in the Times, where Sam Coates suggested that Ryan had claimed "that free healthcare distorts the democratic process". The truth is that the pieces more mild, more wonkish, and even partially correct – although deeply cynical.

He is right,because it is obvious to anyone that the American attitude to government is clearly different to the British one. For all that some on the right of the Conservative party love to repeat Ronald Reagan's famous quote about Government being the problem, that view is only really held by the fringes of European society - as opposed to the US, where it is the mainstream opinion.

It's only partly right, though, because he's clearly overstating the effect healthcare has. Attachment to the state comes from more than just getting your medicine from The Man. It is experiencing a caring state full stop which changes how a nation sees the role of government.

And it's deeply cynical because he seems to be arguing that a government should stay deliberately bad – should stop doing good things, and only do things which will anger its citizens – because otherwise people will realise that big government isn't such a bad thing.

It's putting the cart before the horse. If Ryan thinks universal healthcare is bad, he should have the courage to let the voters decide whether they agree with him – not prevent them from getting healthcare because they might realise he's wrong.

Ryan's other moment touching on British issues came in 2011. He was given the opportunity to make the Republican response to Obama's State of the Union address (roughly analogous to the Queen's speech, in that it lays out the legislative agenda for the year ahead). He argued:

If we continue down our current path, we know what our future will be. Just take a look at what’s happening to Greece, Ireland, 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 benefit cuts to seniors and huge tax increases on everybody.

Lumping together "Greece, Ireland and the United Kingdom" betrays a basic lack of comprehension of the extreme differences between the crises in those three countries.

For one thing, there is no way that America could ever (in the foreseeable future) face crises similar to those of Ireland and Greece. Simplifying matters enormously, Greece's problems were borne from corrupt governments systematically lying on national accounts to enter the Euro, running spiralling deficits once the cheap credit became available, and having no recourse to the currency markets when the truth came out.

Ireland, meanwhile, suffered a hangover from a privately financed housing boom which turned into a privately financed housing bust, a banking crisis which required a government bailout, and, again, the straightjacket imposed by the Euro combined with German intransigence aggravating the whole matter.

And if Ryan was seriously suggesting that following Obama's vision for America could take the country in the direction of the UK, he needed to take a look in a mirror.

Even in 2011, it was clear that the UK did not have any particular debt crisis, and that overzealous attempts to deal with the deficit were harming demand and compounding the error. Construction spending had fallen, confidence had been slammed and the VAT rise had just been introduced.

Of course, for all that Ryan looked economically illiterate comparing the three at the time –and he did – in hindsight, he looks even worse. The Conservatives, we now know, inherited recovery and turned it into recession, and they did that through targeted application of austerity. But compared to Paul Ryan's budgets, the Coalition looks positively profligate.

The VP pick has not got a perfect track record talking about things outside his expertise, then. I'd suggest he stick to areas he knows about, but it's becoming rapidly questionable whether there actually are any. Maybe he should just keep quiet and be a pretty face on the campaign trail.


Paul Ryan. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

Photo: Getty Images
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How can Britain become a nation of homeowners?

David Cameron must unlock the spirit of his postwar predecessors to get the housing market back on track. 

In the 1955 election, Anthony Eden described turning Britain into a “property-owning democracy” as his – and by extension, the Conservative Party’s – overarching mission.

60 years later, what’s changed? Then, as now, an Old Etonian sits in Downing Street. Then, as now, Labour are badly riven between left and right, with their last stay in government widely believed – by their activists at least – to have been a disappointment. Then as now, few commentators seriously believe the Tories will be out of power any time soon.

But as for a property-owning democracy? That’s going less well.

When Eden won in 1955, around a third of people owned their own homes. By the time the Conservative government gave way to Harold Wilson in 1964, 42 per cent of households were owner-occupiers.

That kicked off a long period – from the mid-50s right until the fall of the Berlin Wall – in which home ownership increased, before staying roughly flat at 70 per cent of the population from 1991 to 2001.

But over the course of the next decade, for the first time in over a hundred years, the proportion of owner-occupiers went to into reverse. Just 64 percent of households were owner-occupier in 2011. No-one seriously believes that number will have gone anywhere other than down by the time of the next census in 2021. Most troublingly, in London – which, for the most part, gives us a fairly accurate idea of what the demographics of Britain as a whole will be in 30 years’ time – more than half of households are now renters.

What’s gone wrong?

In short, property prices have shot out of reach of increasing numbers of people. The British housing market increasingly gets a failing grade at “Social Contract 101”: could someone, without a backstop of parental or family capital, entering the workforce today, working full-time, seriously hope to retire in 50 years in their own home with their mortgage paid off?

It’s useful to compare and contrast the policy levers of those two Old Etonians, Eden and Cameron. Cameron, so far, has favoured demand-side solutions: Help to Buy and the new Help to Buy ISA.

To take the second, newer of those two policy innovations first: the Help to Buy ISA. Does it work?

Well, if you are a pre-existing saver – you can’t use the Help to Buy ISA for another tax year. And you have to stop putting money into any existing ISAs. So anyone putting a little aside at the moment – not going to feel the benefit of a Help to Buy ISA.

And anyone solely reliant on a Help to Buy ISA – the most you can benefit from, if you are single, it is an extra three grand from the government. This is not going to shift any houses any time soon.

What it is is a bung for the only working-age demographic to have done well out of the Coalition: dual-earner couples with no children earning above average income.

What about Help to Buy itself? At the margins, Help to Buy is helping some people achieve completions – while driving up the big disincentive to home ownership in the shape of prices – and creating sub-prime style risks for the taxpayer in future.

Eden, in contrast, preferred supply-side policies: his government, like every peacetime government from Baldwin until Thatcher’s it was a housebuilding government.

Why are house prices so high? Because there aren’t enough of them. The sector is over-regulated, underprovided, there isn’t enough housing either for social lets or for buyers. And until today’s Conservatives rediscover the spirit of Eden, that is unlikely to change.

I was at a Conservative party fringe (I was on the far left, both in terms of seating and politics).This is what I said, minus the ums, the ahs, and the moment my screensaver kicked in.

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.