Paul Ryan is often the smartest man in the room on economic policy. His op-ed in this morning’s WSJ offers abundant justification for that characterization. Here’s his opening shot at the Obama/Pelosi policies:

Inheriting countless challenges, Congress and the Obama administration have moved quickly on many fronts to implement their economic agenda. After two months of drastic interventions, has hope replaced fear, and confidence pushed aside uncertainty? Hardly.

The budget the president released last week, however, does provide some certainty about where we are headed: higher taxes on small businesses, work and capital investment.

Rather than just criticize President Obama and Speaker Pelosi, Rep. Ryan lays out this positive, appealing alternative agenda:

In this spirit, here is what I would do differently:

  • A pro-growth tax policy. Rather than raise the top marginal income tax rate to 39.6%, it should be dropped to 25%. The lower tax brackets should be collapsed to one 10% rate on the first $100,000 for couples. And the top corporate tax rate should be lowered to 25%. This modest reform would put American companies’ tax liability more in line with the prevailing rates of our competitors.
  • Guarantee sound money. For the last decade, the Federal Reserve’s easy-money policy has helped fuel the housing bubble that precipitated our current crisis. We need to return to a sound money policy. That would end uncertainty, help keep interest rates down, and increase the confidence entrepreneurs and investors need to take the risks required for future growth.
  • Fix the financial sector. A durable economic recovery requires a solution to the banking crisis. There are no easy or painless solutions, but the most damaging solution over the long term would be to nationalize our financial system. Once we put politicians in charge of allocating credit and resources in our economy, it is hard to imagine them letting go.
  • Get a grip on entitlements. With $56 trillion in unfunded liabilities and our social insurance programs set to implode, we must tackle the entitlement crisis. President Barack Obama deserves credit for his recent efforts to build a bipartisan consensus on entitlement reform. But we can’t solve the entitlement problem unless we acknowledge why the costs are exploding, and then take action.

It’s clear that the financial markets aren’t buying into President Obama’s economic blueprint. That’s become even more clear now that the DJI had dropped into the 6800 range, the first time it’s been this low since October, 1997.

It’s time for a thoroughly thought through change of direction instead of the intellectually flimsy change of direction that Democrats campaigned on in 2006. we can’t afford more of that new direction. It’s time that our economic policies were based on time-tested principles rather than on gimmicky policies that President Speaker Pelosi and President Obama are pushing.

There’s little chance that President Obama and President Speaker Pelosi will abandon their economic plan. Still, I’m thankful that Rep. Ryan has laid out the House Republican economic blueprint.

The GOP can’t be the party that just says no. The GOP must be the political party that says yes to appealing, intelligent policies.

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Cross-posted at California Conservative

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