October 30 2013
A Famous Economist Praises the Sequester
Finally, something in Washington is working. And guess what it is? The sequester!
All the drama coming out of Washington in the last few weeks has obscured some seriously good news: federal government spending is falling. And not at a trickle: think the White Cliffs of Dover.
Not since the economic boom following 1945 have Americans seen such a rapid decline in the government’s claim on the nation’s resources — falling by a welcome $94 billion over two years.
You need to go back to the end of the Korean war to find a time when US government spending has actually declined over two years.
If Republicans in the House stick to the sequester and future caps already built into current budget law, federal spending will stay at this low level for years to come.
Laffer calls this state of affairs “a cold shower of fiscal reality” for liberals who thought that a second Obama administration would usher in spending that made the Great Society look stingy. But Laffer uses this to make a larger point: it’s not stimulus that causes a society to thrive. It’s the opposite: less government spending.
Government spending, Laffer points out, doesn’t create resources; it merely redistributes them. And this isn’t the only thing wrong with profligate government spending: When the government makes money available to people for not working, Laffer says, more people will decide not to work.
We should pause a moment and give the much-scorned GOP credit for letting the sequester happen. It took guts.