Obama’s Social Welfare State

Mr. Obama’s $3.6 trillion budget blueprint, by his own admission, redefines the role of government in our economy and society. The budget more than doubles the national debt held by the public, adding more to the debt than all previous presidents — from George Washington to George W. Bush — combined. It reduces defense spending to a level not sustained since the dangerous days before World War II, while increasing nondefense spending (relative to GDP) to the highest level in U.S. history. And it would raise taxes to historically high levels (again, relative to GDP). And all of this before addressing the impending explosion in Social Security and Medicare costs.

To be fair, specific parts of the president’s budget are admirable and deserve support: increased means-testing in agriculture and medical payments; permanent indexing of the alternative minimum tax and other tax reductions; recognizing the need for further financial rescue and likely losses thereon; and bringing spending into the budget that was previously in supplemental appropriations, such as funding for the wars in Iraq and Afghanistan.

The specific problems, however, far outweigh the positives.

via Michael Boskin Says Barack Obama Is Moving Us Toward a European-Style Social Welfare State and Long-Run Economic Stagnation – WSJ.com.

What could I possibly add? The clear intent is to move us in the direction of a European social welfare state. What’s wrong with that? The problem is that the social welfare economies are stagnant. One might argue that they would not work at all were it not for the presence of one global source of innovation and entrepreneurship. That would be us. If we leave the game, what holds up the house of cards?

Of course, proposals are not deeds and many of the worst ideas in Obama’s budget could be undone by a future administration – but only after people experience the results. I guess we only learn the hard way.

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