November 24, 2003

Economics by Dick

I thought this was interesting. An article in this morning's Chicago Tribune (registration required) outlines Dick Gephardt's attacks on Howard Dean. Gephardt felt Dean was insufficiently liberal as Vermont's governor:

"Time after time, when faced with budget shortfalls, Gov. Dean's first and only instinct was to cut--cut education, cut prescription drug coverage, cut Medicaid funding, cut aid to the elderly, blind and disabled," Gephardt said.

"Gov. Dean wears his bravado as a budget cutter like a badge of honor," he said. "There is no place for governance without compassion."

Afterward, Gephardt said Dean should have considered higher taxes on Vermont's wealthier citizens, made cuts in other programs and looked at such actions as raising the minimum wage to spur economic growth. (Emphasis added.)

Gephardt also suggested Dean could have disbanded the state's criminal justice system to discourage crime, mandated that all public school classes be taught in Swahili to improve English skills, and outlawed hand washing in public restrooms as a means to fight infections.

The saddest thing about the 2004 presidential election is that somebody has to win. As Andrew Sullivan said about the choice between Bush and Dean: "So we have to pick between a budget-busting, free-spending, entitlement-expanding Republican and a Democrat opposed to many critical aspects of a free and dynamic economy. We're stuck between a reckless liberal and a regulatory liberal. It's the 1970s all over again - and too depressing for words."

Posted by Mr Green at November 24, 2003 08:32 AM

"raising the minimum wage to spur economic growth."

Gephardt's reasoning, I gather, is that raising the minimum wage would put more money in the pockets of people who'd immediately spend it; thus spurring on the economy.
He's thinking in simplistic terms: that all employers are rich fat cats hording their profits while the worker drones don't get their fair share.
But there is no "Big Industry" in Vermont, and there are only two towns in -- Burlington and Montpelier -- that even have any chain stores.
Other than gas stations, all the business in Vermont is small privately owned "mom and pop" operations. The only thing that raising the minimum wage in Vermont would spur the growth of is the unemployment lines.

And Sullivan is absolutely right. This prescription drug bill is the latest example; 400 billion dollars over the next years is projected (which means it'll likely cost well over a trillion) to buy medicine for all seniors without even so much as means testing.
Bush seems to be oblivious to the long-term effects of his domestic policies.

In fairness, though, means testing for medicare benefits is unconstitutional. Under the current structure of Medicare all recipients must have identical coverage (benefits must be apportioned equally among the states). That's why I support a Constitutional amendment to allow benefits to be doled out on an individual basis; do away with the payroll taxes for Social Security and Medicare; and pay benefits from the general fund. By doing away with the individual "trust fund" "Lockbox" we can means test any and all "entitlements."
That might seem like a more "socialist" approach, but it would do away with the monsterous outlays that Medicare and Social Security now require.

Posted by: Tuning Spork at November 27, 2003 10:54 PM

Gephardt is right. I take all the money I make over $15K / year and burn it in the fireplace. Better for the economy that it be taken from me and given to people who would actually spend it.

Posted by: Mr. Green at December 2, 2003 10:40 PM

Swahili words actually make really good computer passwords. Just so you know.


Posted by: hln at December 4, 2003 09:50 PM