Ben Stein: Decline and Fall: A View From 2089
[Ben Stein is a lawyer, writer, actor and economist. E-mail: ebiz@nytimes.com.]
THE future is now. To see how history might look back on our economic crisis, we bring you this excerpt from “The Decline and Fall of the United States of America,” Beijing University Department of Western Hemisphere History (Beijing Press, 2089):
The demise of an economy as mighty as that of the United States as of 2000 cannot be accounted for by anything less than deeply mistaken and foolish decision-making within that nation’s ruling circles.
No amount of foreign competition or resource shortage has historically caused such a catastrophe. However, policy actions undertaken without proof or even evidence of their efficacy have historically done so. (See “The Decline and Fall of the Roman Empire,” Gibbon, 1776.)
Starting from an extremely strong economic and fiscal position in the year 2000, with surpluses running far into the future in the federal budget and a highly positive outlook for its ability to handle its future pension and health obligations, the United States, under the administration of George W. Bush, a Republican, undertook one of the most mystifyingly self-destructive policy actions yet seen in a democracy.
Taxes were lowered sharply for well-off and other taxpayers, while government expenditures rose in almost every area, civil and defense. This, in short order, led to a multiplication of the size of the federal budget deficit.
The theory behind this puzzling behavior was known as “supply-side economics.” Magically, it was supposed to increase productivity, the number of hours worked, and tax receipts to the point that the losses in federal revenue were more than offset. There never was any historical evidence that this would happen, at least not as a consequence of the tax cuts, and the deficit, in fact, grew. So did class antagonisms over the ever-larger share of the national income taken by the wealthy....
In retrospect, it is not clear upon what evidence the stimulus packages were based, because no one had ever been able to prove that taking money from taxpayers, and having the government spend it instead, would meaningfully enlarge the scale of economic activity. (See “John Maynard Keynes and the Suicide of the West,” 2039, Hong Kong Press.)...
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THE future is now. To see how history might look back on our economic crisis, we bring you this excerpt from “The Decline and Fall of the United States of America,” Beijing University Department of Western Hemisphere History (Beijing Press, 2089):
The demise of an economy as mighty as that of the United States as of 2000 cannot be accounted for by anything less than deeply mistaken and foolish decision-making within that nation’s ruling circles.
No amount of foreign competition or resource shortage has historically caused such a catastrophe. However, policy actions undertaken without proof or even evidence of their efficacy have historically done so. (See “The Decline and Fall of the Roman Empire,” Gibbon, 1776.)
Starting from an extremely strong economic and fiscal position in the year 2000, with surpluses running far into the future in the federal budget and a highly positive outlook for its ability to handle its future pension and health obligations, the United States, under the administration of George W. Bush, a Republican, undertook one of the most mystifyingly self-destructive policy actions yet seen in a democracy.
Taxes were lowered sharply for well-off and other taxpayers, while government expenditures rose in almost every area, civil and defense. This, in short order, led to a multiplication of the size of the federal budget deficit.
The theory behind this puzzling behavior was known as “supply-side economics.” Magically, it was supposed to increase productivity, the number of hours worked, and tax receipts to the point that the losses in federal revenue were more than offset. There never was any historical evidence that this would happen, at least not as a consequence of the tax cuts, and the deficit, in fact, grew. So did class antagonisms over the ever-larger share of the national income taken by the wealthy....
In retrospect, it is not clear upon what evidence the stimulus packages were based, because no one had ever been able to prove that taking money from taxpayers, and having the government spend it instead, would meaningfully enlarge the scale of economic activity. (See “John Maynard Keynes and the Suicide of the West,” 2039, Hong Kong Press.)...