Monday, August 27, 2012

Where No Wealthy Nation Has Gone Before

From David Leonhardt, a sober assessment of what would happen if the tea party-dominated Republicans win the White House and Senate and keep the House:
What would the combined effects of the new Republican revolution be? Some government agencies would probably become less wasteful, learning to do more with less, and the private sector would take over some government functions. But those would not be the only changes. The American economy would also devote fewer of its resources to the areas that do not naturally create opportunities for profit in a free market: mass transportation, road building, early-stage scientific research, many aspects of education and public safety.

Whether you love that idea or hate it, it certainly would be different. Around the world, the historical pattern has been for government to grow as a society becomes richer and citizens vote for more of the services that the market often does not provide by itself. Federal spending makes up 22 percent of the American economy today, up from three percent a century ago.

In an aging society coping with a globalized economy, where health care and education continue to grow more ambitious and expensive, the country has a choice to make. It can allow government to continue expanding. Or, as a Romney administration would, it can take a more laissez-faire path than any wealthy country has previously tried.

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