Filed under: A Milder Despot
George Mason economist Russ Roberts and Nobel laureate Paul Krugman recently got into a little spat over a claim that Russ made on his blog:
Krugman is a Keynesian because he wants bigger government. I’m an anti-Keynesian because I want smaller government. Both of us can find evidence for our worldviews. Whose evidence is better? I’m not sure it’s a meaningful question. My empirical points about Keynesianism won’t convince Krugman. His point don’t convince me.
Russ got jumped on by a good portion of the blogosphere for this claim with the powerful argument of “Aha! See, those libertarians just want smaller government no matter the evidence. We lefties are all looking for evidence first and foremost, and that’s why we’re Keynesians.”
For a more detailed post, you can read Russ’ long defense, but I think that he’s making a claim more about philosophy than economics. Is Krugman a Keynesian because it’s what his values align with or is he a Keynesian because he walked into Econ 101, bringing no bias with him, completely open-minded, and decided that Keynesianism as a general economic guide makes the most sense? Krugman and his defenders are basically claiming the latter, which seems pretty preposterous.
Regardless, that has now led Adam Ozimek at Modeled Behavior to posit that Russ Roberts is wrong because he and others can favor policies that run in opposition to their worldview at any given time. He’s called this challenge “Now Less Than Ever.”
Deregulation is important, and necessary, and too much regulation is a problem. But it’s not the problem the economy is facing right now. Attempts to focus on regulation are a distraction, and we’re not going to deregulate our way to full employment. We need to focus on deregulation now less than ever.
So now it’s your turn. Help prove Russ Roberts’ cynicism wrong, and tell us what favorite policies of yours we need Now Less Than Ever.
Ezra Klein also asks conservative bloggers to take the challenge. Far be it from me, a humble freelance conservative, to claim the mantle of all conservative bloggers, but I’ve got an easy one: tax cuts!
As a conservative who believes our looming entitlement-driven budget crisis is possibly the greatest policy problem facing the country right now, tax cuts are a nice long-term goal but something certainly unnecessary as the United States faces a tidal wave of red ink. The CBO’s alternative fiscal scenario, which is usually my baseline for budgeting, puts our tax burden at around 19% of GDP in 2020. That’s a fine number. It could even stand to be a bit higher. But I don’t think that tax cuts are something in the cards right now. Paul Ryan’s budget (which I’ve had high praise for) is lacking in specificity on tax reform, and also includes slight cuts relative to this baseline. I think that’s a mistake.
Tax reform is certainly needed, but even though I think a state that taxes at a lower rate than 19% of GDP is going to have more growth, the deficit that the United States faces due to out-of-control spending is a much larger problem. In fact, the CBO warned that debt is going to be a significant drag on growth in their standard ten-year budget window. We need tax cuts now less than ever.
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