I’m going to be in New York City next week to join with Richard Epstein as we participate in an Intelligence Squared debate against Mark Zandi and Cecilia Rouse.
I’m looking forward to this event because Richard Epstein is a rock star for freedom.
It also gave me an opportunity to pontificate on growth issues for Slate. Here’s what I wrote about Keynesianism.
Keynesianism is the economic version of a perpetual motion machine. It assumes you can take money out of the economy’s left pocket, put it in the economy’s right pocket (probably spilling a lot of it in the process), and somehow be richer as a result. A major problem with the theory is that supporters focus on how an economy’s output is allocated. Is it better for more of the economy’s output to be used for consumption? Or for investment? Or, as Keynesians often argue, should more of our output be used for government spending? But economic growth isn’t boosted by redistributing how gross domestic product is allocated. Economic growth happens when we get more gross domestic product. That is why policies that focus on incentives and disincentives are more likely to generate positive results.
And here’s what I suggested to get the economy going.
…tax reform, such as a flat tax, would be so helpful for job creation and competitiveness. But interim measures also would help, such as lowering the corporate tax rate (especially since the U.S. is tied with Japan for the highest corporate tax burden in the industrialized world). Implementing policies to restrain the burden of government spending also would be critically important. On the macro level, some sort of cap on government spending would help, such as the plans proposed by Sen. Corker of Tennessee and Rep. Brady of Texas. On the micro level, it’s important to figure out the programs, agencies, and departments that should be mothballed, both because they are not appropriate functions of the federal government and because they hinder prosperity.
The NYC debate is open to the public, by the way, though they do charge.
