Of course, it’s probably much more complicated than simply “more taxes = fewer jobs.”
Absolutely. Taxes become services, infrastructure, etc, some are highly beneficial.
Reduce the size of government down to zero and you're looking at places where murder is legal, and there is no power, or roads, or contract enforcement. A government which prevents murder, enforces contracts, and builds roads is highly useful and necessary for certain levels of industry.
Several states (don’t knew the list) have constitutional balanced budget provisions.
It's basically everyone but Vermont. http://www.politifact.com/texas/statements/2010/dec/25/john-cornyn/sen-john-cornyn-says-49-states-have-balanced-budge/
Like the country as a whole, the states can also raise their taxes. And the tax burden, even in horrible, corrupt Ilinois, isn’t that high that there is no more room. Chicago is not 1789 Paris.
Chicago's problem isn't that it's under taxed.
Even if we make the assumption that a really big tax increase will solve everyone's problems, IMHO it'd be a short term fix. Programs would continue to grow, politicians would continue to get elected promising to hand out free stuff, and long term we'd be back in this mess where the government has outstripped it's revenues.
Their budget can’t “break”.
I suspect we're going to test that. Hopefully a few states will break and provide an abject lesson to the rest on what not to do, and after that voters will understand that there are long term issues with "free" things (be they tax cuts or hand outs by the gov).
One of the problems is we're at the bottom of an interest rate super-cycle, multiple generations of politicians and business leaders have come to power thinking that interest rates can only go down, debt can only get cheaper. In that context, it makes sense to take on debt to "invest" or hand out good things to your supporters.
Return interest rates to their historical averages and lots of places will discover debt isn't free and they have real problems.
Your argument is that politicians would rather let the economy collapse and misery go around than raise taxes.
So you're saying you were wrong when you said they would? That deep down you think the GOP's anti-tax crowd aren't serious? Are you claiming the GOP is willing to raise taxes high enough to fund all the programs you want?
And yet, Illinois politicians were willing to raise taxes. They didn’t get the memo.
So hopefully now that they've had a tax increase, all of their problems are behind them and they'll be prosperous. :)
Cost of living? Yes. NYC and suburbs are very expensive places to live. Taxes? No.
A lot of "cost of living" is the effects of taxe and regulations. When you pay for a sandwich you're also paying for the vendor's taxes and overhead, everything that makes his life expensive is passed on to you.
I still don’t get the “let’s uproot from Manhattan and go to Kansas. Have you seen the low taxes there (*)?”
I could increase my income a LOT if I moved to New York or Chicago, occasionally I have job offers. However after taxes and cost of living, I expect I'd be poorer. I'd also have to live in far worse housing, and have a far worse commute as well.
My personal measure is when the budget breaks and the bond market understand there's no money to be made loaning them money.
Alternatively we could have enough civil unrest (or war, or natural disaster) that the state loses its monopoly on violence... but that's unlikely at a state level because the feds would step in.
It’s sad when people run out of arguments and have to recourse to “slavery abolition was expropriation without fair compensation”
By modern standards, every single slave owner could, and should, have been arrested and imprisoned. Further there's a really strong claim that Slavery seriously impeded the South's economy, lowered productivity, misallocated resources, that sort of thing.
But from the standpoint of the South itself, with an economy built around slavery, the end of slavery would have been seen as the end of the economy. Think of it as a one-factory town after that one factory closes down.
That's not an argument for slavery, it's pointing out that the economic/social impact of the federal government was so great that when the other guy won the election, the South went to war.
So yes, more and more power to the gov increases the stakes of the elections.
You have to explain what the cliff is, and how, by what mechanisms, do we get from a low tax burden, moderately growing, hight industrial output, not particularly endebted, high productivity, country that also happens to be the issuer of the currency of its obligations, to a cliff.
:Amusement: You and I have both explained it.
Let me just quote you: The republic as we know it won’t die of a fiscal crisis, brought down by Chinese banks pulling out of Treasuries. It will be brought down by the screeching to a halt of the political process (*). (*) of course, by then, the Lenders would have pulled away, scared by a country that has the assets to pay its debt, but it’s refusing to use those assets as part of their internal political game.
And now let me quote me: Politicians run out of the political will to tax long before they run out of things they can tax.
The modern age required a unification and standardization of the nation. E Pluribus Unum and all that. Today is what we as citizens expect. Having fifty different rules about mortgages, or what is and is not covered by insurance, or what should or should not be recycled just creates confusion in a mobile population that thought the rules they grew up in Ohio will apply in Texas.
Yes and no. I get what you're saying, but imho a lot is gained by forcing the states to compete with each other. Tax too much, regulate too much, and you lose population and/or jobs.
We are probably going to see various states fail because of corruption and/or simple bad policy. Illinois comes to mind.
That's over and above the whole 'tyranny of the majority' thing. A one size fits all approach to policy probably results in bad things for whoever is a minority (likely rural or more-wild-than-rural countryside).
Now days we think of slavery from a civil rights point of view. However from the South's point of view, slavery was also an economic issue. What the federal gov wanted to do (i.e. end slavery) would have destroyed huge amounts of the South's economic "assets", and upended every company large enough to have slaves.
The economic importance of who controls the gov isn't just "taxes" or even "size of gov", it's also the gov's other influences on the economy. The government telling you what you can and can't do with your property and what jobs you can have is up there with direct taxation and direct spending.
That’s the point I’m trying to make: We don’t have a long-term fiscal sustainability problem when we have a growing economy and one of the lowest tax burdens in the developed world.
2% growth should be a serious cause for concern, not a source of pride. Return growth to 5% and we can handwave away a lot of these other issues.
I think it was you who pointed out this past weekend that saving Social Security required just some minor tweaks, but no one will act on those.
If those "tweaks" involve tax increases which can be measured in percentage points of the GDP, then your definition of "minor" is very different than mine.
We have a political problem with a substantial part of our society desiring to cut “entitlements” (other people’s),
In Washington-speak "cuts" means "reduce increase of future spending".
These programs increase in cost every year above inflation and the growth of the economy; Just holding them constant should not be described as a "cut". The cost of these programs has grown, dramatically, and often the basic plan was that future politicians would somehow find the money.
Politicians run out of the political will to tax long before they run out of things they can tax. The political support needed to create these programs, and even to keep them, is less than the political support needed to constantly increase taxes to pay for them long term.
Granted, we need to do something for the old and the sick, but "something" doesn't have to mean "break the budget" or "first call on society's resources".
bridges are not collapsing around us because we are in fiscal trouble and cannot pay for the repairs.
Entitlements are squeezing out things like bridge repair. However we just had a massive stimulus which was sold as going to "shovel ready jobs" to help infrastructure. High speed rail and various "green" infrastructures is where the infrastructure money went... and having pulled that trick once, it's going to be a harder sell the second time.
This year it is, even this decade (although the lack of growth is already a big issue). These are long term problems, and the closer we get to the edge of that cliff the more painful it will be backing away from it.
I don’t think @j_a was talking about hyperinflation, but rather modestly higher inflation than the very low levels we’ve had for the past 30 years.
His exact phrase was: "...deflate its borrowings into nothingness..."
Enough to make our debt load substantially more manageable, but not so much as to ruin the economy. There’s a lot of space between 1.5% and 1000% or whatever.
When you say "make our debt load substantially more manageable" what the bond market will hear is "we can't pay all of you full value".
And the world changes, probably a lot. At a minimum we have a substantial "risk" premium adding to our bonds (which would be awful), at a max on day one there will be a mad rush for the door as every trader tries to save himself. And then we have day two.
At that point we're over the edge of the universe and dealing with the unknown. Things will have had to be awful for us to try this, my expectation is that they'll get a lot worse. One hopes we don't turn to Darth Sidious and instead just let Social Security be cut in half, but we can't really say.
So you want a King to run it? Politics is how we figure out how to govern ourselves. The program is doing far better then people think.
I don't see why a 401k needs a "King" to run it.
My intuition is that the more political meddling we have, the worse it will end up being; whether it's California's retirement accounts being used to further "green" agendas or Social Security's habit of passing it's full cost onto future taxpayers so current retirees can get back more than they put in.
The self-proclaimed “fiscal conservatives” can never get specific about spending, because they instantly run into the trip wire of the fact that the biggest spending programs are also the most popular.
You say that like it's a good thing. I'd object to new gov programs a lot less if it were possible to kill the old ones, or even to evaluate whether or not they're doing a good job. But you really can't, not if you want to get elected.
Every new program becomes politically untouchable because it's "needed" by someone who will vote on that issue, and every dollar of new gov spending becomes permanent. Thus gov only grows, but eventually we'll run out of other people's money.
At the time of the German reunification the FDR and the Bundesbank took the correct, but painful, decision to convert worthless DDR Marks 1:1 into German Marks, then the strongest currency in the world. Doing otherwise would have destroyed 100% of the Osties wealth.
Wait, why would a 2:1 conversion have been deadly?
It's been quite a while but I vaguely recall thinking that was the expected result.
There are a set of fixes that could fix SS. The SS oversight board lists them every year. It’s not rocket science. Different political pressures have led to nothing being done but the answers are there.
Sure. Agreed. Politics prevents this program from being run correctly... but that's kind of why I question whether this is something we want run by the political system.
“Using pre WW2 German inflation….” was no solution to anything because the war reparations were not denominated in Marks but in foreign currency
You're quibbling about my comparison rather than my conclusion. Fine, I'll rephrase.
The US trying to inflate (i.e. default) on its debt will be somewhere between the economic wrath of god and fighting a zombie apocalypse. We'd be better off with a half a dozen 911 events.
We lose our ultra low interest rates and get rates which befit a country which will soon be defaulting, this triggers truly impressive amounts of economic pain. We have to choose between killing tax increases which make our situation worse and not paying entitlements, i.e. pensions.
Losing the dollar as the international currency becomes a serious option. The word "bankruptcy" gets mentioned a lot, maybe even seriously by serious people.
Whether or not comparing this to pre-WW2 Germany is appropriate, this is a breathtakingly painful option with savage side effect and those details need to be mentioned every time this "option" is brought up.
I know more about how the federal budget works that about how the Houston Independent School District budget works. So I call cow husband digestive depositions on local accountability.
Local for me means something a lot smaller than that. Our local gov is responsible and works well. There are other choices within driving distance of my job, if the current city fails or gets to expensive I can vote with my feet.
Actually, one of the biggest problems in the USA is that state and local governments are much more opaque and unresponsive than the federal government. With the result that the majority of people claim for federal intervention in almost everything.
So the solution to dysfunctional, overly large government is more government?
(Plus, education is a good example of something where the economies of scale would recommend a complete federalizations of the process. There is no Texas math or Massachusetts math, nor is there (apologies to Young Earh Crazy People) a Kentucky biology different than a California biology. 99% of what goes on in schools is supposed to be the same everywhere in the country, and most cases of the different 1% are examples of things that don’t help the kids)
Sounds like you'd get diseconomies of scale. I've needed to step in three times with the local school administration. Twice they did the right thing, once they refused.
So I pulled my kids and put them into the local charter. State money follows the kids, two years latter the public schools and I had the same conversation and this time they "had room" in the school I wanted to put the kids into.
Competition is WONDERFUL at forcing unresponsive monopolies to be responsive. Empowering local parents to do what's best for their kids sounds a lot more like a ticket for success than a government run monopoly where the people running it don't suffer if they fail your kids.
Seems to be to you, but you are wrong. Greece’s problems stem from the loss of monetary independence, and a currency that is stronger than what the productivity of Greece would warrant, without the ability to devaluate to compensate. Which of course is exactly the opposite of the USA, who has the ability to deflate its borrowings into nothingness...
Listing pre-WW2 German style inflation as a "solution" says a lot. It's one of the nightmare things I'd like to avoid.
(not that there is any reason the USA would ever do it...
"It can't happen here" is a dangerous statement, especially when there doesn't seem to be a politically effective counter-argument for "more" government.
the federal tax burden as a percentage of GDP has been quite flat for a couple of decades now
Problems:
1) Taxes haven't matched expenditures for quite a while. We really should look at what the gov does with the expectation that it will need to be paid for sooner or later.
2) The federal gov pushes unfunded mandates on the States/Localities. A full picture of the cost of government needs to look at the full picture, which is local+state+fed.
Given that the Federal government does a lot more than in 1880 (and so do the states) a comparison with 1880 is kind of useless.
How about if we started at 1930 (the new deal)? Or 1950 (after the WW2 spike)?
Further the point I'm making is that the government "does a lot more", and is always looking for more things to do.
What should we cut out? Social Security?
Social Security has been so popular in part because every generation thus far has gotten back more than they've put in. It should have always been defined contribution (as should all pensions), any plan that comes down to "future politicians will find the money" is problematic on the face of it.
I'd issue education vouchers for students (aka Sweden). I'd replace all social programs, including SS, with raw cash. I'd make it EXPRESSLY clear that there's one pot of money, which taxes fund it, and that (for example) the seniors voting themselves more means there's less in there for everyone else.
Further, it's worth noting that just because the gov doesn't do something, doesn't mean it doesn't get done, and that a command and control style micromanagement solution which spends other people's money shouldn't be the first stick out of the bag for all problems.
We already went through this graph a couple of weeks ago...
Either I missed that one or it predates me.
, and why it didn’t show what you claim it shows. At least bring on a new graph
The increasing gov spending as a percentage of GDP doesn't show increasing gov spending as a percentage of GDP? You've lost me, what are you trying to claim here?
You’re stealing a base or seven when you hinge your argument on the notion that big government has dragged GDP growth down, rather than that it’s harder to grow a developed economy than a developing one.
I claimed 5% because the developing countries can do double digits until they catch up (China's example), and 5% is what we've seen when the USA was the most developed economy.
That aside, let's be explicit about what you're implicitly claiming.
1) The tax code so complex no human can understand it, that doesn't cause economic distortions.
2) These armies of bureaucrats which deal with other armies of bureaucrats, the overhead from them totally doesn't matter, and there's no side effects or distortions from just having them.
3) The war on drugs doesn't cause any economically problematic side effects. The people it throws into jail would have been drags on the economy anyway (etc).
4) Moving down on the economic freedom index hasn't caused any economic side effects.
Even if we fixed all of these issues (and more I'll skip), 2% is the best we can do, none of these things cause problems with growth.
My original comment was pointing out that liberals do not want an unlimited government. You seem to have dropped that silly claim. So good on that.
Limited and unlimited gov seem to be opposite ideals.
But let's reverse the question. When does liberalism win? What's the max amount of gov spending per GDP? What's the final gov program(s) which need to be in place to consider it a victory, beyond which liberals say "no more"?
It's been pointed out that you can't spend 1000% of the GDP; But short of running out of other people's money, what stops the growth of gov?
*Comment archive for non-registered commenters assembled by email address as provided.
On “The American Interest: A Republic If You Can Keep It”
Faith is what you're doing when you're staring at math and data filled trend lines and ignoring them. Following the data is the exact opposite.
"
Absolutely. Taxes become services, infrastructure, etc, some are highly beneficial.
Reduce the size of government down to zero and you're looking at places where murder is legal, and there is no power, or roads, or contract enforcement. A government which prevents murder, enforces contracts, and builds roads is highly useful and necessary for certain levels of industry.
"
It's basically everyone but Vermont. http://www.politifact.com/texas/statements/2010/dec/25/john-cornyn/sen-john-cornyn-says-49-states-have-balanced-budge/
Chicago's problem isn't that it's under taxed.
Even if we make the assumption that a really big tax increase will solve everyone's problems, IMHO it'd be a short term fix. Programs would continue to grow, politicians would continue to get elected promising to hand out free stuff, and long term we'd be back in this mess where the government has outstripped it's revenues.
I suspect we're going to test that. Hopefully a few states will break and provide an abject lesson to the rest on what not to do, and after that voters will understand that there are long term issues with "free" things (be they tax cuts or hand outs by the gov).
One of the problems is we're at the bottom of an interest rate super-cycle, multiple generations of politicians and business leaders have come to power thinking that interest rates can only go down, debt can only get cheaper. In that context, it makes sense to take on debt to "invest" or hand out good things to your supporters.
Return interest rates to their historical averages and lots of places will discover debt isn't free and they have real problems.
"
So you're saying you were wrong when you said they would? That deep down you think the GOP's anti-tax crowd aren't serious? Are you claiming the GOP is willing to raise taxes high enough to fund all the programs you want?
So hopefully now that they've had a tax increase, all of their problems are behind them and they'll be prosperous. :)
"
A lot of "cost of living" is the effects of taxe and regulations. When you pay for a sandwich you're also paying for the vendor's taxes and overhead, everything that makes his life expensive is passed on to you.
I could increase my income a LOT if I moved to New York or Chicago, occasionally I have job offers. However after taxes and cost of living, I expect I'd be poorer. I'd also have to live in far worse housing, and have a far worse commute as well.
"
My personal measure is when the budget breaks and the bond market understand there's no money to be made loaning them money.
Alternatively we could have enough civil unrest (or war, or natural disaster) that the state loses its monopoly on violence... but that's unlikely at a state level because the feds would step in.
"
By modern standards, every single slave owner could, and should, have been arrested and imprisoned. Further there's a really strong claim that Slavery seriously impeded the South's economy, lowered productivity, misallocated resources, that sort of thing.
But from the standpoint of the South itself, with an economy built around slavery, the end of slavery would have been seen as the end of the economy. Think of it as a one-factory town after that one factory closes down.
That's not an argument for slavery, it's pointing out that the economic/social impact of the federal government was so great that when the other guy won the election, the South went to war.
So yes, more and more power to the gov increases the stakes of the elections.
"
:Amusement: You and I have both explained it.
Let me just quote you: The republic as we know it won’t die of a fiscal crisis, brought down by Chinese banks pulling out of Treasuries. It will be brought down by the screeching to a halt of the political process (*). (*) of course, by then, the Lenders would have pulled away, scared by a country that has the assets to pay its debt, but it’s refusing to use those assets as part of their internal political game.
And now let me quote me: Politicians run out of the political will to tax long before they run out of things they can tax.
"
You've never heard of anyone moving away from New York (etc) because of the cost of living?
"
Yes and no. I get what you're saying, but imho a lot is gained by forcing the states to compete with each other. Tax too much, regulate too much, and you lose population and/or jobs.
We are probably going to see various states fail because of corruption and/or simple bad policy. Illinois comes to mind.
That's over and above the whole 'tyranny of the majority' thing. A one size fits all approach to policy probably results in bad things for whoever is a minority (likely rural or more-wild-than-rural countryside).
"
Now days we think of slavery from a civil rights point of view. However from the South's point of view, slavery was also an economic issue. What the federal gov wanted to do (i.e. end slavery) would have destroyed huge amounts of the South's economic "assets", and upended every company large enough to have slaves.
The economic importance of who controls the gov isn't just "taxes" or even "size of gov", it's also the gov's other influences on the economy. The government telling you what you can and can't do with your property and what jobs you can have is up there with direct taxation and direct spending.
"
@j_a
2% growth should be a serious cause for concern, not a source of pride. Return growth to 5% and we can handwave away a lot of these other issues.
If those "tweaks" involve tax increases which can be measured in percentage points of the GDP, then your definition of "minor" is very different than mine.
In Washington-speak "cuts" means "reduce increase of future spending".
These programs increase in cost every year above inflation and the growth of the economy; Just holding them constant should not be described as a "cut". The cost of these programs has grown, dramatically, and often the basic plan was that future politicians would somehow find the money.
Politicians run out of the political will to tax long before they run out of things they can tax. The political support needed to create these programs, and even to keep them, is less than the political support needed to constantly increase taxes to pay for them long term.
Granted, we need to do something for the old and the sick, but "something" doesn't have to mean "break the budget" or "first call on society's resources".
Entitlements are squeezing out things like bridge repair. However we just had a massive stimulus which was sold as going to "shovel ready jobs" to help infrastructure. High speed rail and various "green" infrastructures is where the infrastructure money went... and having pulled that trick once, it's going to be a harder sell the second time.
"
This year it is, even this decade (although the lack of growth is already a big issue). These are long term problems, and the closer we get to the edge of that cliff the more painful it will be backing away from it.
"
His exact phrase was: "...deflate its borrowings into nothingness..."
When you say "make our debt load substantially more manageable" what the bond market will hear is "we can't pay all of you full value".
And the world changes, probably a lot. At a minimum we have a substantial "risk" premium adding to our bonds (which would be awful), at a max on day one there will be a mad rush for the door as every trader tries to save himself. And then we have day two.
At that point we're over the edge of the universe and dealing with the unknown. Things will have had to be awful for us to try this, my expectation is that they'll get a lot worse. One hopes we don't turn to Darth Sidious and instead just let Social Security be cut in half, but we can't really say.
"
I don't see why a 401k needs a "King" to run it.
My intuition is that the more political meddling we have, the worse it will end up being; whether it's California's retirement accounts being used to further "green" agendas or Social Security's habit of passing it's full cost onto future taxpayers so current retirees can get back more than they put in.
"
You say that like it's a good thing. I'd object to new gov programs a lot less if it were possible to kill the old ones, or even to evaluate whether or not they're doing a good job. But you really can't, not if you want to get elected.
Every new program becomes politically untouchable because it's "needed" by someone who will vote on that issue, and every dollar of new gov spending becomes permanent. Thus gov only grows, but eventually we'll run out of other people's money.
"
Well put.
Wait, why would a 2:1 conversion have been deadly?
It's been quite a while but I vaguely recall thinking that was the expected result.
"
Sure. Agreed. Politics prevents this program from being run correctly... but that's kind of why I question whether this is something we want run by the political system.
"
You're quibbling about my comparison rather than my conclusion. Fine, I'll rephrase.
The US trying to inflate (i.e. default) on its debt will be somewhere between the economic wrath of god and fighting a zombie apocalypse. We'd be better off with a half a dozen 911 events.
We lose our ultra low interest rates and get rates which befit a country which will soon be defaulting, this triggers truly impressive amounts of economic pain. We have to choose between killing tax increases which make our situation worse and not paying entitlements, i.e. pensions.
Losing the dollar as the international currency becomes a serious option. The word "bankruptcy" gets mentioned a lot, maybe even seriously by serious people.
Whether or not comparing this to pre-WW2 Germany is appropriate, this is a breathtakingly painful option with savage side effect and those details need to be mentioned every time this "option" is brought up.
"
Local for me means something a lot smaller than that. Our local gov is responsible and works well. There are other choices within driving distance of my job, if the current city fails or gets to expensive I can vote with my feet.
So the solution to dysfunctional, overly large government is more government?
Sounds like you'd get diseconomies of scale. I've needed to step in three times with the local school administration. Twice they did the right thing, once they refused.
So I pulled my kids and put them into the local charter. State money follows the kids, two years latter the public schools and I had the same conversation and this time they "had room" in the school I wanted to put the kids into.
Competition is WONDERFUL at forcing unresponsive monopolies to be responsive. Empowering local parents to do what's best for their kids sounds a lot more like a ticket for success than a government run monopoly where the people running it don't suffer if they fail your kids.
"
Listing pre-WW2 German style inflation as a "solution" says a lot. It's one of the nightmare things I'd like to avoid.
"It can't happen here" is a dangerous statement, especially when there doesn't seem to be a politically effective counter-argument for "more" government.
"
Problems:
1) Taxes haven't matched expenditures for quite a while. We really should look at what the gov does with the expectation that it will need to be paid for sooner or later.
2) The federal gov pushes unfunded mandates on the States/Localities. A full picture of the cost of government needs to look at the full picture, which is local+state+fed.
How about if we started at 1930 (the new deal)? Or 1950 (after the WW2 spike)?
Further the point I'm making is that the government "does a lot more", and is always looking for more things to do.
Social Security has been so popular in part because every generation thus far has gotten back more than they've put in. It should have always been defined contribution (as should all pensions), any plan that comes down to "future politicians will find the money" is problematic on the face of it.
http://www.politifact.com/truth-o-meter/article/2013/feb/01/medicare-and-social-security-what-you-paid-what-yo/
I'd issue education vouchers for students (aka Sweden). I'd replace all social programs, including SS, with raw cash. I'd make it EXPRESSLY clear that there's one pot of money, which taxes fund it, and that (for example) the seniors voting themselves more means there's less in there for everyone else.
Further, it's worth noting that just because the gov doesn't do something, doesn't mean it doesn't get done, and that a command and control style micromanagement solution which spends other people's money shouldn't be the first stick out of the bag for all problems.
"
Either I missed that one or it predates me.
The increasing gov spending as a percentage of GDP doesn't show increasing gov spending as a percentage of GDP? You've lost me, what are you trying to claim here?
"
I claimed 5% because the developing countries can do double digits until they catch up (China's example), and 5% is what we've seen when the USA was the most developed economy.
That aside, let's be explicit about what you're implicitly claiming.
1) The tax code so complex no human can understand it, that doesn't cause economic distortions.
2) These armies of bureaucrats which deal with other armies of bureaucrats, the overhead from them totally doesn't matter, and there's no side effects or distortions from just having them.
3) The war on drugs doesn't cause any economically problematic side effects. The people it throws into jail would have been drags on the economy anyway (etc).
4) Moving down on the economic freedom index hasn't caused any economic side effects.
Even if we fixed all of these issues (and more I'll skip), 2% is the best we can do, none of these things cause problems with growth.
"
Limited and unlimited gov seem to be opposite ideals.
But let's reverse the question. When does liberalism win? What's the max amount of gov spending per GDP? What's the final gov program(s) which need to be in place to consider it a victory, beyond which liberals say "no more"?
It's been pointed out that you can't spend 1000% of the GDP; But short of running out of other people's money, what stops the growth of gov?
*Comment archive for non-registered commenters assembled by email address as provided.