Why ‘starving the beast’ may not work

Steven F. Hayward’s audit of the state of American conservatism, which David Brooks judges to be one of the best magazine articles of the year, argues that the Reaganite ‘starve the beast strategy’ has failed to halt the growth of government. Hayward writes:

‘Thirty years after the arrival of the Reagan Revolution, government is bigger than ever. The Reagan years appear to have been little more than a mild speed bump in the progress of ever-larger government. The regulatory state advances relentlessly on every front. The soaring national debt threatens economic oblivion sooner or later. In short, the Reagan era, for all that was accomplished, was not an analogue to the New Deal era. In fact, the much-vaunted Reagan Revolution was not revolutionary and failed to alter the nation’s basic long-term political trajectory.’

Hayward’s argument is that the ‘starve the beast’ strategy of cutting back on government revenues ‘may make the problem of unrestrained spending growth worse, suggesting that a “serve the check” strategy might be a more effective means of curbing the growth of government spending. The simple explanation for this seeming paradox is that the starve-the-beast strategy currently allows Americans to receive a dollar in government services while only having to pay 60 cents for it.’

Hayward goes on to make the case for this ‘serve the check’ strategy:

‘Requiring the American people to actually pay for all of the government they receive is, as Niskanen and others have convincingly argued, the most effective way to limit its growth. Right now the anti-tax bias of the Right results in shifting costs onto future generations who do not vote in today’s elections, and enables liberals to defend against spending restraints very cheaply. Instead of starving the beast, conservatives should serve the check.’

In the current circumstances, I’m not persuaded that tax hikes are what the US economy needs. But Hayward is surely right that the best way to reduce the size of government is to make people pay for it now rather than just let them just palm the cost off onto future generations.