Starving Leviathan With Unlimited Credit


Is the Milton Friedman-blessed Grover Norquist concept of "Starving Leviathan"—letting the federal government run huge budget deficits so that it eventually runs out of money for basic programs—really an effective way to impose spending discipline on Congress and the public? Cato's Will Wilkinson votes no.

[E]conomist William Niskanen, chairman of the Cato Institute (also my employer), has presented econometric evidence that federal spending tends to increase when tax revenues decline, flatly contradicting the starve-the-beast theory. Furthermore, according to William Gale and Brennan Kelly of the Brookings Institution, members of Congress who signed the President's "No New Taxes" pledge were more, not less, likely to vote for spending increases, which is hard to square with the starve-the-beast theory. […]

By promulgating the idea that given a tax cut, spending will take care of itself, advocates of the "starve the beast" theory have helped produce a political climate in which principled vigilance about spending seems unnecessary.