We can learn a lot by looking at economic history.
It’s instructive to note, for instance, that the United States evolved from agricultural poverty to middle-class prosperity in the 1800s – during a time when the burden of government spending was trivially small.
Federal spending that century, on average, consumed less than 5 percent of the country’s economic output, meaning we had a public sector far smaller that what is found today in supposedly small-government jurisdictions such as Hong Kong and Singapore.
There’s a lesson to be gleaned from America’s rise to prosperity, in my humble opinion, as well as from similar experiences in Western Europe.
But not everybody sees history the same way. Earlier this month, David Brooks opined in the New York Times in favor of Biden’s spending binge.
Given his long-standing opposition to libertarianism/small-government conservatism, that’s not a big surprise. But what is noteworthy is that he argued Biden’s statism is part of the American tradition.
What is the quintessential American act? It is the leap of faith. …The early days of the Biden administration are nothing if not a daring leap. …What is this thing, Bidenomics? …democracy needs to remind the world that it, too, can solve big problems. Democracy needs to stand up and show that we are still the future. …Cecilia Rouse, the chair of Biden’s Council of Economic Advisers, …said…“the private sector…is not best suited to deliver certain public goods like work force training and infrastructure investment,” she told me. “These are places where there is market failure, which creates a role for government.” …Some people say this is like the New Deal. I’d say this is an updated, monster-size version of “the American System,” the 19th-century education and infrastructure investments inspired by Alexander Hamilton, championed by Henry Clay and then advanced by the early Republicans, like Abraham Lincoln. That was an unabashedly nationalist project, made by a youthful country, using an energetic government to secure two great goals: economic dynamism and national unity.
The column concludes that we have to make this leap to deal with a threat from China.
Sometimes you take a risk to shoot forward. The Chinese are convinced they own the future. It’s worth taking this shot to prove them wrong.
But Mr. Brooks is wrong. We’re not taking a daring leap into the unknown with Biden’s agenda.
We’re copying Western Europe.
And that means we have lots of data showing what that means for our future. Unfortunately, it means Americans will enjoy less income and suffer from lower living standards.
At the risk of understatement, that doesn’t seem like a good idea.
P.S. I also can’t resist pointing out that there are several small points in Brooks’ column that cry out for correction, such as the anti-empirical assertions that government job training is a good idea or that government intervention in the 1800s produced good results.
P.P.S. I’m also baffled that so many people view China as a successful economic model when living standards in that nation are only about one-fifth of American levels.
[…] Indeed, that’s the argument made by “state-capacity libertarians” and others who argue that the U.S. had such a system in the […]
All the recessions that occurred between the Civil War and the Spanish-American war were caused by the overbuilding of railroads. The government encouraged this overbuilding through subsidies to the railroads, which threw the economy out of balance.
Biden’s basic statement that his administration will only increase taxes on the rich, while not increasing the taxes on poor, HAS TO BE THE OF BIGGEST LIE EVER MUTTERED BY A POLITICIAN. THESE LIES HAVE TO BE DEMONSTRATED IN CARTOON FORM BY PROFESSIONALS SO US NORMAL FOLKS CAN COMPREHEND HOW THEY ALL WILL BE SCREWED BY BIDEN’S ECONOMIC PLANS FOR THIS COUNTRY.
Remember the objective. You have to communicate with John Doe public, not other economists. Use as an example a family of 4 with an income of about $50,000 with relatively low federal income tax responsibilities and according to Biden these same facts will not be changed in the future. But unknown to John Doe and his family is that they, personally, will be paying the federal taxes on/for large corporations when they are innocently purchasing their daily goods and services, and end up paying an extra 20 % to 50% more for these same goods and services over what they did a little while ago. These higher prices at the store counter were caused by corporations paying higher taxes on their profits which are automatically passed onto John Doe in higher prices for gas, food and etc.
Biden and the Democrats have been lying to the public about the placing higer taxes only on filthy rich corporations. Economist know the results of higher taxes being placed upon a national economy. At the same time, poor John Doe has no idea why its ever more difficult to make ends meet. For in reality it is the consumer who pays the taxes of/for large corporations and etc.
This is rambling. Does Dan have a point?
[…] The “American System” Is Big Government?!? […]
I’ve wondered since my early twenties why our leaders have this fascination with Europe. We’d watch European countries make huge policy mistakes. Growing government to solve problems only to make things worse with unintended consequences. Instead of learning from their mistakes we rush to copy their ineptitude. Fifty years later I’m still awed by this level of stupidity. Like you, I do not understand this fascination with China. I guess I’ll never understand.
Mr. Brooks needs to spend some time in China. Not in a nice western hotel, but out and amongst the people. But wait, he could not possibly speak honestly about the conditions as his social score would suffer. And no one could read what he wrote because it would be behind the the great digital wall of the PRC.
Next: China’s progress has largely been based upon theft of western technology. Be it computers, aerospace, engineering, agriculture, they stole the technology. So Mr. Brooks what could we steal from the PRC or another nation to help the US with a great leap forward?