I would like to know if there is any discussion of the deficit in this book. The democrats seem to have a new-found fear of deficits (which they didn't seem to care about for 40 years) and I would like to read some explanations about the danger (or lack thereof) of the current deficit, and also what the President is planning on doing about it. Thanks!
The deficit
Yes - in fact, I wrote the chapter on the deficit. (I can send you an op-ed version, if you'd like).
My view is that the major problem facing the American economy is over-taxation, not the deficit. In my article, I compared economic growth and federal fiscal policy in five periods of Us history, and I show how tax policy (not deficit policy0 is the major determinant of economic growth.
Also, remember that the federal debt today is 36 percent of GDP - It bottomed out at 33 percent in 2000. Compare that over 50 percent in the early 1990s, 60 percent in France and Germany and 150 percent in Japan.
The main argument against a deficit is that it Pushes up interest rates - though of course interest rates are near record lows today, and are LOWER in Japan than in the US (the opposite of what deficit hawks would suggest).
So something's wrong with the "Rubin" view.
"I would like to know if there is any discussion of the deficit in this book. The democrats seem to have a new-found fear of deficits (which they didn't seem to care about for 40 years) and I would like to read some explanations about the danger (or lack thereof) of the current deficit, and also what the President is planning on doing about it. Thanks!"
We do address deficits, and several of our writers probably differ even with each other on the issue. I CAN say this much: don't believe a Democrat on this issue, EVER. To them, deficits are a red herring, a propaganda point to split fiscal conservatives from each other and from other conservatives. And there's only one answer on the Democrat side anyway: tax, tax, tax. Cutting spending never enters the equation.
Now from my personal perspective, I don't like deficits at all, but in the short term, they're irrelevant. The nominally-record deficits we're running right now -- in a time of both war and (earlier) recession -- are actually a far lower percentage of GDP than the deficits of the early 1980s, which came at the outset of a twenty-year boom. And moreover, so long as the dollar remains the world's reserve currency, the normal rules of "crowding out" and such simply don't apply. There's a virtually unlimited market out there both for dollars and for dollar-denominated debt. If we're ever going to run deficits, this is the single best time in history to do it.
Of course, long-term all bets are off. So we need to wean the American public off of big government as fast as we can, which is the whole point of the Ownership Society.