Stockman's Point of No Return

[ASH]

Re: Stockman's Point of No Return

Alright sorry for the mis-read, you're back on my good guys list. I've met lots of people here in southern CA who state "starve the beast" with no irony, totally destroyed my irony detector.

Thanks, although I don't know if I qualify as a 'good guy' from most standpoints.

I have greater tolerance for government regulation and a hawkish American foreign policy than the small government types round these parts.

I have much less tolerance for entitlement spending than the more progressive types, and my views on property rights and what constitutes "fair" taxation are downright reactionary.

I like the voices on this forum who are to the left or right of me, but I think I am "moderate" only in that I hold a hodge podge of extreme views from either wing.

[thriftyandboringinohio]

Re: Stockman's Point of No Return

I read an interesting criticism of "starve-the-beast" that explains why it didn't work, and won't work until the US is no longer able to borrow at low interest rates. The problem is that lowering taxes reduces the 'cost' of government to voters; Econ 101 says lowering the cost at which something is offered will tend to increase 'demand' for it. So, counter-intuitively, lower taxes increases the demand for bigger government.

The main reason we run large deficits is that folks love their federal spending but hate paying taxes. Whether the spending is in the form of benefits or national defense or research or education or pork -- everybody loves their slice of public spending while denouncing the "wastefulness" of the programs they don't use or care about. But so long as the overall cost of this spending is low, voters are more motivated to defend their slice of the pie than they are to take away anyone else's. That puts politicians in a bind, because every area of federal spending has its defenders amongst the voting public. If politicians raise taxes to balance the budget, they'll be voted out of office. If they cut spending to balance the budget, they'll be voted out of office. As long as they have the option to borrow money so that their constituents can have their cake and eat it too, that is the optimal political strategy for staying in office.

Ironically, those of us who would like smaller government should be agitating to raise taxes, and widen the tax base as much as possible, so that the maximum number of voters feel the pain. High taxes and a wide tax base are the only way to make smaller government seem appealing to enough voters to control the size of government. Instead, the "small government" crowd does everything in its power to reduce the cost of government to its citizens, and this only increases demand for more government.

Of course, "starve the beast" will work plenty well if America is ever denied access to credit. But starving the beast all at once would not be pretty.

You describe a catastrophe as the end of starve-the-beast, and I agree. Further, I think it is the intended outcome, fully understood by the advocates of starve-the-beast.

The Grover Norquist crowd would rather destroy the US economy and halt all government and start again from scratch than continue to live in a 1983 style America where they feel they are paying too many taxes that help too many undeserving people.

[ASH]

Re: Stockman's Point of No Return

You describe a catastrophe as the end of starve-the-beast, and I agree. Further, I think it is the intended outcome, fully understood by the advocates of starve-the-beast.

The Grover Norquist crowd would rather destroy the US economy and halt all government and start again from scratch than continue to live in a 1983 style America where they feel they are paying too many taxes that help too many undeserving people.

Interesting. If so, they're a patient bunch -- and seem awfully sure of the social order that would emerge from that chaos.

[thriftyandboringinohio]

Re: Stockman's Point of No Return

Interesting. If so, they're a patient bunch -- and seem awfully sure of the social order that would emerge from that chaos.

I'm with you, ASH. That's why I think it's an important point.
And they ARE a patient bunch, willing to stick to a plan for decades.

[we_are_toast]

Re: Stockman's Point of No Return

You describe a catastrophe as the end of starve-the-beast, and I agree. Further, I think it is the intended outcome, fully understood by the advocates of starve-the-beast.

The Grover Norquist crowd would rather destroy the US economy and halt all government and start again from scratch than continue to live in a 1983 style America where they feel they are paying too many taxes that help too many undeserving people.

I fully agree that "starve the beast" will end in catastrophe, but I don't think the promoters understood the end results. At best, a fully implemented "starve the beast" ends in a banana Republic/3rd world nation status, at worst the guillotines, torches, and pitchforks show up at the front doors of the Oligarchs. In the former, the Rich become prisoners in their fortresses where the only place constitutional freedoms can be enforced, in the latter, the haircuts will be more than financial and occur somewhere slightly below the chin.

[dcarrigg]

Re: Stockman's Point of No Return

I fully agree that "starve the beast" will end in catastrophe, but I don't think the promoters understood the end results. At best, a fully implemented "starve the beast" ends in a banana Republic/3rd world nation status...

Was the purpose of "starve the beast" ever anything other than to make 99% of Americans into serfs in perpetuity? There is no problem with living in a banana republic if you're the one with the villa and guards...