by Victor Davis Hanson<\/p>\n
National Review Online<\/em><\/p>\n Who would not prefer \u201cgrowth\u201d to \u201causterity\u201d? That is the false dichotomy that insolvent Western governments, both here and abroad, are now constructing. After all, everyone prefers growing things to starving them. Yet in truth, there is no such clear-cut choice.<\/p>\n In other words, \u201causterity\u201d is a lie. For all the talk of terrible hardship and suffering, most of insolvent southern Europe still enjoys entitlements undreamed of by prior generations. When the French lamented that they were being squeezed to death by postponing retirement, they meant to age 62 rather than 60 \u2014 a futile reform soon to be rescinded by new French president Fran\u00e7ois Hollande.<\/p>\n In the case of the United States, \u201causterity\u201d does not mean significant cuts in food stamps, reductions in unemployment eligibility, or a raised retirement age, but simply not adding new entitlements to those that recently were vastly expanded. It is a trademark of human nature that people resent any reduction of a benefit, or even only a moderate expansion of it, far more than not having it offered at all. Talk today of cutting the Medicare Prescription Drug Benefit or No Child Left Behind, and hysteria follows \u2014 without recognition that neither program even existed before the presidency of the unpopular George W. Bush.<\/p>\n But there is an even worse fraud in the new notion of \u201causterity\u201d: It now commonly refers only to the level of government spending versus revenue, not to fundamental changes in the nature of regulated and closed economies. \u201cAusterity\u201d \u2014 the pruning back of government support \u2014 is supposed to lead to all sorts of social tensions and civic unrest. By contrast, \u201cgrowth\u201d \u2014 even more government spending \u2014 restores calm. But if labor markets are highly regulated and inflexible, if the tax structure is byzantine and punishes entrepreneurs while promoting the black market and cheating, and if government regulations crush new businesses, then the problem goes well beyond a question of expanding or cutting government benefits.<\/p>\n The crisis in Greece involves not just the question whether the government must cut services and prune its labor force, but also the fact that the entire Greek legal system and national culture punish risk-taking and profit-making while rewarding timidity within a landscape of envy and jealousy. What the Greek government chooses to spend is important, but is rendered unimportant if endemic tax cheating and the regulatory straitjacket are left unaddressed.<\/p>\n In the case of the United States, had Barack Obama reformed the tax code to promote investment and entrepreneurialism, vastly stepped up oil and gas leasing on public lands in lieu of subsidizing Solyndra-like boondoggles, and trimmed back regulations, the economy would have grown far faster, even despite Obama\u2019s vast deficits. To take an example from the private sector, the Harvard graduate with $200,000 in student loans and a sociology degree is in terrible shape; the Harvard graduate with the same level of debt and an engineering or business degree is not.<\/p>\n But if the bogeyman term \u201causterity\u201d is misleading, even more ridiculous is the fuzzy new idea of \u201cgrowth\u201d \u2014 the notion that by not cutting back massive borrowing and high deficits, governments can create new wealth and grow themselves into prosperity. Here in the United States, we \u201cgrew\u201d by adding $5 trillion in new borrowing \u2014 and got annual GDP growth of less than 2 percent, 40 months of 8 percent\u2013plus unemployment, $4-a-gallon gas, and serial $1 trillion deficits. If having near-zero interest rates, borrowing more than all previous presidents combined, and putting 50 million people on food stamps is a policy of \u201cgrowth,\u201d what would be needed to actually show results? Negative interest rates? New debt of $10 trillion? More than 100 million on food stamps?<\/p>\n Does anyone think austere Texas is growing more slowly than big-government California or New York? When southern-European countries piled up trillions in debt over the last decade, did such public \u201cstimulus\u201d and \u201cgrowth\u201d lead to far greater productivity, wealth, and security than in \u201caustere\u201d Germany or Scandinavia?<\/p>\n So there is a disturbing counterfactual element of \u201cnever enough\u201d inherent in the \u201cgrowth\u201d argument. There is little empirical evidence that borrowing creates national wealth, but it is still promoted on the principle that past efforts to boost the economy by running up gargantuan deficits always were too small. Thus Obama supposedly failed to restore the economy in his first term only because he did not dare to borrow $10 trillion rather than a mere $5 trillion \u2014 even though most severe recessions by now would have given way to a natural cycle of robust recoveries.<\/p>\n Finally, there is one more problem with the fake growth\/austerity juxtaposition. They are both simply reflections of much deeper ideologies that drive politics. \u201cGrowth\u201d is a euphemism for the politics of hiring lots of government workers, preferably unionized, and expanding the number of people dependent on government, who in turn owe politicians their jobs and reciprocate at the polls in expectation of even greater largesse. The costs of expanding the number of government employees and offering them ever higher salaries, benefits, and retirement packages are met not through increasing productivity, but rather by increasing taxes on those who mostly make their livings under very different conditions in the despised private sector.<\/p>\n \u201cGrowth,\u201d then, is a sort of \u201cgorge the beast\u201d antithesis to the Reaganite \u201cstarve the beast\u201d model. Both ideologies seek to avoid insolvency through a game of chicken \u2014 of front-loading the cost and hoping the other guy will blink first when it comes to paying for it. But where the Reagan model sought first to cut taxes, so as to cut revenue, so as to force down the size of government and prune federal dependency, the Obama paradigm seeks first to grow government, which increases dependency and therefore requires more taxes \u2014 itself a good thing because it means redistributing income from those who have no clue that they have passed the point at which they no longer need to make any more money.<\/p>\n If politicians talked not of \u201cgrowth\u201d versus \u201causterity\u201d but of \u201cborrowing and spending\u201d versus \u201cfiscal discipline,\u201d then there would be very little public support for their disastrous agendas. Instead, we are supposed to like the nurturers who \u201cgrow\u201d and despise the \u201caustere\u201d who hack away.<\/p>\n It\u2019s that simple.<\/p>\n \u00a92012 Victor Davis Hanson<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":" by Victor Davis Hanson National Review Online Who would not prefer \u201cgrowth\u201d to \u201causterity\u201d? That is the false dichotomy that insolvent Western governments, both here and abroad, are now constructing. After all, everyone prefers growing things to starving them. Yet in truth, there is no such clear-cut choice.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_newsletter_tier_id":0,"footnotes":"","jetpack_publicize_message":"","jetpack_is_tweetstorm":false,"jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false}}},"categories":[282,619],"tags":[12,77,1015,74,149,107,243,67,58],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p466Sb-bg","jetpack_likes_enabled":true,"jetpack-related-posts":[{"id":760,"url":"https:\/\/victorhanson.com\/wordpress\/let-sleeping-germans-lie\/","url_meta":{"origin":698,"position":0},"title":"Let Sleeping Germans Lie","author":"victorhanson","date":"May 28, 2012","format":false,"excerpt":"by Victor Davis Hanson Tribune Media Services The newly elected French Socialist president, Francois Hollande, is warning Germany that Mediterranean ideas of \"growth,\" not Germanic \"austerity,\" should be the new European creed. No surprise there \u2014 reckless debtors often blame their own past imprudence on greedy creditors, especially if the\u2026","rel":"","context":"In "Germany"","block_context":{"text":"Germany","link":"https:\/\/victorhanson.com\/wordpress\/ahref=\/index.php\/categories\/angry-reader\/categorylink\/a\/the-world\/europe\/germany\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":750,"url":"https:\/\/victorhanson.com\/wordpress\/the-eu-at-the-abyss\/","url_meta":{"origin":698,"position":1},"title":"The EU at the Abyss","author":"victorhanson","date":"May 29, 2012","format":false,"excerpt":"by Victor Davis Hanson NRO's\u00a0The Corner Over the last four years, almost all of the news about the shaky European Union has been financial, with some attention paid to southern Mediterranean tabloid attacks on Germany and the German media counter-stereotyping of irresponsible siesta-loving sunny Mediterraneans. But as Greece falls apart,\u2026","rel":"","context":"In "Economy"","block_context":{"text":"Economy","link":"https:\/\/victorhanson.com\/wordpress\/ahref=\/index.php\/categories\/angry-reader\/categorylink\/a\/the-world\/europe\/economy-europe\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":55,"url":"https:\/\/victorhanson.com\/wordpress\/europes-wishes-came-true\/","url_meta":{"origin":698,"position":2},"title":"Europe’s Wishes Came True","author":"victorhanson","date":"January 31, 2013","format":false,"excerpt":"by Victor Davis Hanson Tribune Media Services Almost a decade ago, Europeans and many progressive Americans were lamenting how the United States was going to miss out on the 21st-century paradigm symbolized by the robust European Union. Neanderthal Americans were importing ever more oil while waging a costly \"war on\u2026","rel":"","context":"In "The EU"","block_context":{"text":"The EU","link":"https:\/\/victorhanson.com\/wordpress\/ahref=\/index.php\/categories\/angry-reader\/categorylink\/a\/the-world\/europe\/the-eu\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":667,"url":"https:\/\/victorhanson.com\/wordpress\/germany-may-destroy-europe-for-the-third-time-really\/","url_meta":{"origin":698,"position":3},"title":"‘Germany May Destroy Europe for the Third Time’–Really?","author":"victorhanson","date":"July 2, 2012","format":false,"excerpt":"by Victor Davis Hanson NRO's\u00a0The Corner In open worries that the EU disaster may spread to the US and thereby endanger the reelection of Barack Obama, campaign consultant Bob Shrum recently\u00a0wrote: If Chancellor Angela Merkel remains unyieldingly wedded to austerity or finally reacts too slowly and too late to the\u2026","rel":"","context":"In "Economy"","block_context":{"text":"Economy","link":"https:\/\/victorhanson.com\/wordpress\/ahref=\/index.php\/categories\/angry-reader\/categorylink\/a\/the-world\/europe\/economy-europe\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":975,"url":"https:\/\/victorhanson.com\/wordpress\/which-way-greece\/","url_meta":{"origin":698,"position":4},"title":"Which Way Greece?","author":"victorhanson","date":"February 12, 2012","format":false,"excerpt":"by Victor Davis Hanson NRO's The Corner One question that rarely arises about Greece is \u201cwhere did all those hundreds of billions of Euros really go?\u201d I think most visitors could easily answer that they were not all squandered on pensions and inflated government staffs and salaries. The Greece of\u2026","rel":"","context":"In "Greece"","block_context":{"text":"Greece","link":"https:\/\/victorhanson.com\/wordpress\/ahref=\/index.php\/categories\/angry-reader\/categorylink\/a\/the-world\/europe\/greece\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":2525,"url":"https:\/\/victorhanson.com\/wordpress\/the-global-fairness-madness\/","url_meta":{"origin":698,"position":5},"title":"The Global Fairness Madness","author":"victorhanson","date":"July 19, 2011","format":false,"excerpt":"by Victor Davis Hanson National Review Online Whether in the fights over the US debt limit or the rioting in Athens, the common global theme is not poverty in absolute terms, but more often fairness \u2014 as in having about the same amount of things as others do. Here in\u2026","rel":"","context":"In "Greece"","block_context":{"text":"Greece","link":"https:\/\/victorhanson.com\/wordpress\/ahref=\/index.php\/categories\/angry-reader\/categorylink\/a\/the-world\/europe\/greece\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/victorhanson.com\/wordpress\/wp-json\/wp\/v2\/posts\/698"}],"collection":[{"href":"https:\/\/victorhanson.com\/wordpress\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/victorhanson.com\/wordpress\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/victorhanson.com\/wordpress\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/victorhanson.com\/wordpress\/wp-json\/wp\/v2\/comments?post=698"}],"version-history":[{"count":4,"href":"https:\/\/victorhanson.com\/wordpress\/wp-json\/wp\/v2\/posts\/698\/revisions"}],"predecessor-version":[{"id":5727,"href":"https:\/\/victorhanson.com\/wordpress\/wp-json\/wp\/v2\/posts\/698\/revisions\/5727"}],"wp:attachment":[{"href":"https:\/\/victorhanson.com\/wordpress\/wp-json\/wp\/v2\/media?parent=698"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/victorhanson.com\/wordpress\/wp-json\/wp\/v2\/categories?post=698"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/victorhanson.com\/wordpress\/wp-json\/wp\/v2\/tags?post=698"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}