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Toward the Precipice
From the November 29, 2010, issue of NR.


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In the event neither side gets its way decisively, the resolution will be a combination of spending cuts and tax increases, either in the near future as a matter of choice, or later on in a desperate attempt to cope with a dire necessity like the one that befell Greece this year. Conservatives, dedicated to the success of the American experiment in self-government, have every reason to prevent the nation from descending into insolvency or mutating into a European social democracy. That obligation is not sufficiently discharged by insisting, against the weight of evidence from the past three decades, that tax cuts will pay for themselves, either by igniting economic growth or by forcing spending cuts.

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The demands of conservative statesmanship in this situation call for making good governance possible by practicing smart politics assiduously. Every solid argument against more spending and more borrowing should be brought to bear, so that higher taxes or dangerous debts do not become the default option.

Here’s one argument: Conservatives would do well, by their cause and their country, to emphasize that the fact that a historical pattern is predominant — modern economies grow steadily, and their welfare states grow even faster — doesn’t make it right or wise. As a nation grows richer, it should at some point begin to devote a decreasing rather than increasing portion of its GDP to welfare-state spending.

America is rich enough to have spent more inflation-adjusted dollars on national defense in 2009 than we did in 1968 with 500,000 troops in Vietnam, even though we are devoting half as much of our GDP to national defense now as we were then. Had our defense policy been driven by the relentless quest to address and if necessary discover “unmet military needs,” we would still be spending roughly the same percentage of GDP on national defense that we did at the height of the wars in Vietnam (9.4 percent) and Korea (14.2 percent). We would, in other words, be spending hundreds of billions of dollars pointlessly.

Military spending has been constrained because it corresponds to objective conditions in the world beyond our shores. The objective conditions, domestically, are that long-term economic growth enhances the ability of more people to spend more of their lives providing for more of their own health care, education, and welfare through their own resources and precautions. Such prosperity should allow a welfare state to shrink relative to the size of the economy, even while growing in absolute terms, if needed, to assist the truly needy. By applying the same logic to welfare spending that we do to military spending, in other words, we can avoid the taxes and the borrowing that would change America irrevocably, and for the worse.

William Voegeli, a contributing editor of The Claremont Review of Books, is the author of Never Enough: America’s Limitless Welfare State and a visiting scholar at Claremont McKenna College’s Salvatori Center. This article originally appeared in the November 29, 2010, issue of National Review.



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