from Thomas Donlan at Barron’s, What Went Wrong in Kansas
Americans want government like they want services generally: “faster, better, and cheaper.” But economists know there’s a problem: The optimistic ones say, “Pick any two”; the pessimists say, “Choose one.”
Too many Democrats, however, pick all three and say they will squeeze more taxes out of the rich to pay for it. Sorry, even in this new gilded age, there aren’t enough rich people to pay for national health care, let alone the rest of the party’s wish list—bridges, roads, rail lines, broad band internet, and most recently, a national drive to cure opioid drug addiction.
Meanwhile, too many Republicans pick all three and say they will pay for it with economic growth. Sorry, Americans have enjoyed more economic growth in the past 228 years than any other big nation on Earth; there’s little that any government can do to push it along against the power of the law of diminishing returns. The results of even the best imaginable policies will come too slowly to satisfy most Americans.
Tax cuts can work to stimulate growth, but not everywhere, not every time. Kansas had and has a lot more problems than its tax cuts.
Letters to the editor on that article the following week:
Growing up in the 1980s, I felt that President Ronald Reagan’s policies were the great impetus for the ensuing growth. I still feel that freedom and low taxes are the root of growth, especially when that growth has been fettered by regulation and discouraged by high taxes for a long period. But I now think that the great growth we saw was as much a result of the baby boomers working through the system as the policies and tax cuts.
The baby boomers were starting to come into their own in the ’80s and making their mark on the economy, creating that tremendous growth. And I think that easily carried into the 1990s. Now, as time marches on and we’re nearing eight years of slower growth, I partially attribute that to slower population growth, as much as to the stifling effects of higher taxes and greater regulation.
So can we count on growth to save us? I don’t think so, and that means we have to do the hard work of cutting government expenses, because the money simply won’t be there to pay for larger and larger government in the future. The rich don’t have enough money to pay the bill, even if you taxed them at 100%, so either you start taxing the poor more or cut expenses.
The left is in a quandary. Without generating growth the welfare state must shrink. This growth may come from a business friendly environment or population growth, both of which are contrary to the policies of the left. They have demonized the main source of support for the welfare state and now they are addicted to the devil.