In another thread I am having a conversation with “carter”, who seems to be a smart and thoughtful person, and a fellow rocketeer, by the look of it. The following is a response to one of his comments that I felt deserved the spotlight of its own post, especially considering how rare I blog these days.
He said, among other things:
Iâ€™ll admit there is a sweet spot for taxation and regulation.
How should we figure out where the sweet spot is? This is perhaps my prime problem with the â€œsmall governmentâ€ rhetoric of the Right. It would be lovely if we could set a certain policy, run the experiment and then rewind, use a different policy, run the experiment again, etc. and really truly find out the right amount of taxes and regulation to make for the strongest economy. We canâ€™t do that.
So instead, like astronomers, we have to observe different experiments in action and then try to normalize them somehow and get our insights that way. What are the other experiments? They are the other countries that are also experimenting with varying degrees of taxes and regulations.
The odd part about this is that the US is an anomaly. There is no Westernized country more conservative than us. There are none with lower taxes. When you look at the other thriving economies of the world they all, every one of them, have more taxes and regulation.
The Right likes to point to this and say â€“ see! We are on to something here in the USA! Less taxes and less regulation make for a stronger economy. Unfortunately that is a statistically insignificant sample of one. There are a lot of other factors that have contributed to the strength of the American economy besides the conservatism of the last few decades.
So Iâ€™m glad we agree â€“ there is a sweet spot for the level of taxes and regulation. You think we have erred in one direction and me the other. I really try to imagine your view as correct. I do trust people to look after their own best interest. I do see how the government screws some things up.
The reason I end up disagreeing with you is this: homo sapiens rose above the bloody fray of survival of the fittest and started cooperating in larger and larger groups. While the law of the jungle certainly applies, a stronger â€œlawâ€ has led to the great success of our species: cooperation. We all do better when we all do better. I canâ€™t escape this ideology and economists have been unable to prove me wrong. I think we should put our efforts into making government better (for we are the government, after all) rather than trying to dismantle it.
I have written elsewhere on this blog why I think progressive taxation is fair and smart. Moving from taxes to fees is regressive. For certain things, I think it is viable and useful. But our government is so more than a service provider.
I also agree that Amy’s child safety law had ridiculous unintended consequences.
Thanks for the great conversation.