Readers are no doubt familiar with calls (usually from Republicans) to “starve the beast” — that is, to reduce tax rates and thus tax income to levels that won’t support the size of government we have now, and thereby force the government to become smaller, leaner, and (one hopes) more focused on providing the basic services of a night-watchman state rather than bombing other countries and kicking down doors in no-knock drug raids*. Whenever we try it, though, reducing tax income simply drives the beast to consume the same amount of money (or more) in the form of debt, which is sort of like raising taxes on our (grand)kids. Won’t someone think of the poor precious children?
But suppose the
starving hungry peckish beast couldn’t borrow more money to spend in place of tax revenues. Wouldn’t that force a final slimming? This, I gather, is the driving hypothesis behind July’s debt-ceiling shenanigans. It relies upon the rather tautological proposition that an unsustainable process will eventually stop.
I should not in passing that falling off a building is unsustainable. Eventually, the ground will stop you.
In any case, it turns out that Greece has provided us with a natural experiment on the results of starve-the-beast. Y’see, Greeks (in aggregate) tend to regard filling out their taxes in the same way as high school students regard English essays: somewhere between a drudgerous exercise in telling an authority figure what they want to hear while expending a minimum of effort and a juicy creative opportunity to construct a castle in the clouds, pasting together carefully-chosen excerpts from the source material to support whatever absurd thesis seems most appealing. That is, tax evasion is the national sport.
- Fast cars and loose fiscal morals: there are more Porsches in Greece than there are taxpayers declaring 50,000 Euro incomes (The Telegraph)
So having been starved of tax income for a good long time, the Greek beast has been dependent upon borrowed money to get its fiscal fix. Surprise! Look how that turned out.
Briefly: Greece jumped off the building decades ago, and the EU has spent most of this year desperately digging up the sidewalk while telling everyone who’ll listen that Greece will find a parachute in its pockets, we mean it, real soon now. Spoiler warning: it’s not gonna happen.
Weight loss looks like a simple matter of thermodynamics: burn more calories than you consume. This is true to a zeroth approximation, but sustainable body-composition changes are a hell of a lot more complex (to start with, you need to stop saying “weight loss” and start saying “fat loss”). As it is with people, so it is with governments: the human metabolism and its attendant endocrinological complications are forbiddingly complex, but then again so is the apparatus of the state. Let’s move away from “plans” to reduce the scope of government that amount to nothing more than “eat less, fatty”.
* Just kidding! Most proponents of starve-the-beast want a government that kicks down doors foreign and domestic. Before you go all wharrgarbl in my comments section, though, here’s some basic set theory: most libertarians are (often wistfully) fond of starve-the-beast, but most starve-the-beast advocates are not libertarians.