Wednesday, November 17, 2010

A novel idea

Wow! The NY Times had an epiphany and announced that economic growth might actually serve some useful purpose; it could reduce the deficit!

Very open-minded of them. I can just picture the editorial meeting where the writer fought for his story: "See, growth isn't all bad, it can at least raise government revenues."

Sadly, their ideas for "cultivating growth" all involve the government doing more things like "reforming" the tax code and "investing" our money.

One of the problems with this approach is that our government insists on investing money in things that don't have a positive economic return like "green jobs", "alternative fuels", high speed trains, and bribing Brazilian cotton farmers so they can keep paying off US cotton farmers.

The article does argue that the government should "prioritize" education and science, and I am in favor of subsidizing the production of public goods. But what has increased government spending in education actually accomplished so far? Has more money brought better performance, or a stronger, more politically active bunch of public sector union members?

Still and all, the Times saying something good about growth has to be counted as progress of a sort.


2 comments:

Anonymous said...

But what has increased government spending in education actually accomplished so far?

Ya, that GI Bill didn't do jack for the economy.

Matt said...

@Anon
It certainly contributed to the higher education bubble, for one thing.