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A Candidate’s Implausible Dream

Paul Ryan said that his views on monetary policy are based on a character’s speech in Ayn Rand’s Atlas Shrugged.

(Image: CartoonArts International / The New York Times Syndicate)

There has, of course, been some pushback against my recent column pointing out that the Very Serious Paul Ryan is not, in fact, serious at all. Some of this pushback takes the form of assertions that he must be serious, because the Congressional Budget Office scored his budget plan and found that it led to lower debt.

People who say things like that evidently haven’t read any of the actual C.B.O. analyses — the most informative is the first one (from April 2011, available at And in particular, they haven’t grasped how Mr. Ryan has gamed the system.

As I pointed out last week when I described what is actually in the Ryan plan, the C.B.O. did not score the policy provisions in the plan; there wasn’t remotely enough detail for a comprehensive assessment. Instead, the C.B.O. laid out the implications of revenue and spending paths that were assumed per Mr. Ryan’s instructions — without expressing any view about whether these paths were plausible. Indeed, I think I detect a bit of discreet snark in what the C.B.O. report actually did say. On revenue, it declared: “The path for revenues as a percentage of gross domestic product was specified by Chairman Ryan’s staff. The path rises steadily from about 15 percent of G.D.P. in 2010 to 19 percent in 2028 and remains at that level thereafter. There were no specifications of particular revenue provisions that would generate that path” (my italics).

On spending, the report declared: “That combination of other mandatory and discretionary spending was specified to decline from 12 percent of G.D.P. in 2010 to about 6 percent in 2021 and then move in line with the G.D.P. price deflator beginning in 2022, which would generate a further decline relative to GDP. No proposals were specified that would generate that path” (my italics, again).

So Mr. Ryan gamed the system: he got the C.B.O. to produce a report that looks to those who don’t actually read it like a validation of his numbers, when in fact he prevented any actual scoring of his proposals.

If you think otherwise, you’ve been snookered.

Francisco d’Anconia on Money

The Slate commentator Dave Weigel made a great catch the other day: In a post on Aug. 13, he noted that in 2005 during a talk at the Atlas Society, Paul Ryan said that his views on monetary policy are based on a character’s speech in Ayn Rand’s “Atlas Shrugged.”

Mr. Weigel points to a 23-paragraph tirade delivered by Francisco d’Anconia, who is the heir to a copper mining empire: “A left-wing magazine writer tells him that ‘money is the root of all evil.’ That sets off d’Anconia, who launches a rant about money … the problem, says d’Anconia, is that statists — looters and moochers — see dollar signs and think they can, must redistribute them. ‘Whenever destroyers appear among men,’ he says, ‘they start by destroying money, for money is men’s protection and the base of a moral existence. Destroyers seize gold and leave to its owners a counterfeit pile of paper. This kills all objective standards and delivers men into the arbitrary power of an arbitrary setter of values. Gold was an objective value, an equivalent of wealth produced. Paper is a mortgage on wealth that does not exist, backed by a gun aimed at those who are expected to produce it.’ ”

Aside from revealing just how much of an Ayn Rand fan Mr. Ryan is — urban legend, my foot — this is interesting because that 23-paragraph speech isn’t just a call for the gold standard; it’s a call for eliminating paper money and going back to gold coins.

This had me wondering: When was the last time the American economy actually ran on specie, rather than notes?

Bear in mind that paper money has been in widespread use for a long, long time. Originally these were often notes from private banks, like the $10 (“dix”) note from the Citizens’ Bank of Louisiana that may have given rise to the term “Dixie” for the South. There’s an extensive, mostly positive discussion of bank notes in Adam Smith’s “Wealth of Nations.”

But when did the notes become dominant over coin?

Well, the Millennial Edition of Historical Statistics of the United States has some data.

As I read it, as of 1813 there was only $7 million worth of coins in the hands of the U.S. public, versus $52 million in bank notes. So even two centuries ago, we were already a paper-money economy.

And this means that Mr. Ryan wants to turn the clock back two centuries, not one.