â€œPoliticians are like criminals in Batman comics. Theyâ€™re a superstitious, cowardly lot. And the minute that they know theyâ€™re going to lose elections because theyâ€™re spending too much money, they will find their inner cheapskate and start [spending less],â€ said Reason's Nick Gillespie during his speech at the Reason Weekend event in Las Vegas.
In "5 Unacknowledged, Unexpected, and Unavoidable Facts about Government Spending and the Economy," Gillespie says politicians such as President Obama and John Boehner are in denial. Influential economists like Paul Krugman and Lawrence Summers correctly diagnose debt as a problem even as they prescribe more debt as the cure.
Gillespie argues that:
- Weâ€™re spending too much. Two wars, entitlement growth, and a massive stimulus are the results of a spending frenzy over the last decade.
- Weâ€™ve got too much debt. Every level of government is in over their heads. The literal and figurative bankruptcies of cities such as Stockton, California and Harrisburg, Pennsylvania are the canaries in the coal mine.
- Debt overhang kills growth. The latest studies are clear: excessive debt, sustained over long periods of time, hurts economic growth. Beyond the cost of higher interest rate payments, increasingly higher debt loads â€" which Gillespie calls â€œa ziggurat of doomâ€ â€" promises to reduce opportunities for everyone.
- Spending growth is driven by entitlements. Since the Great Society programs of the 1960s, the government has switched from providing infrastructure and basic services, to being a national insurance broker. The consequences of this are dire because, as statistician Nate Silver notes, "most of us don't much care for our insurance broker."
- Trust in government is at historic lows. This kind of distrust is an inevitable result of a mismanaged economy. Yet it's also cause for optimism. Public discontent sow the seeds of reform, allowing the possibility of meaningful fiscal reform.
Gillespie's talk, in which he also sketches solutions to long-term economic malaise, is followed by audience Q&A.
Runs about 38 minutes.
Produced by Todd Krainin. Camera by Meredith Bragg and Alex Manning.
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