Wednesday, January 28, 2009

Do we want to be more like Europe?

With a proposed stimulus package of nearly $816 billion package (which is no small chunk of change, even for the United States), I thought Jim Manzi, a reputable economist had an interesting point:
The net effect of this bill is to shift the distribution of U.S. government spending as a whole away from defense and public safety and toward social programs: for good or ill, to make the U.S. into more of a European-style social welfare state. Because the amount of spending is so huge, this will be a material, not notional, shift. Eventually, we will emerge from this recession/depression/whatever it’s going to be. When that happens, is this really the kind of government we’re going to want?
Now he does not say that social spending is a good or bad thing, but does indicate that this would most like be a permanent shift in the role of how government acts in our daily life. In other words he is asking do we want to see a larger government that has her fingers in even more pies?

Whether this will be a long recession or a short recession, there are few economist that are willing to declare either way. But either way, it is a basic axiom of economics that it goes through cycles of recession and growth. We will come out of this recession. So the question really is not what do we want the government to do now? but what do we want to government to look like in 5 years, 10 years, and for our children?

Link to the article: European Social Welfare State Bill

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