The Old-School Liberal

“Freedom granted only when it is known beforehand that its effects will be beneficial is not freedom” — Friedrich Hayek

Will the GOP Reduce the Size of the Government?

Posted by Poorsummary on November 30, 2007

In the GOP Youtube debate, Emily Ekins asked a very straightforward question which begs for a simple answer: “What are the names of the top three federal programs you would reduce in size in order to decrease [spending]?” Here are the answers:

Fred Thompson seemed to be answering the question when he started talking vaguely about Medicare and Social Security reform, but he makes it clear that he is not providing a straightforward answer:

Cooper: So of the top three you would say Social Security?

Thompson: No. I didn’t say that. There is — the OMB has come out with a list of over 100 programs. I would take all 100 of them, the ones that are full of waste, fraud and duplication.

Rather than providing the names of the top 3 programs he would reduce (as Emily asked), he contents himself with referencing a list, published by the OMB, that includes 100 programs. Way to dodge the question, Fred.

Congressman Paul provides names of departments he would eliminate: The Department of Education (which Reagan talked about eliminating), The Department of Energy, and The Department of Homeland Security. He also mentions the trillions we will save by cutting back on US military adventurism. Eliminating these three departments may at first seem impossible, but the Departments of Education, Energy, and Homeland Security didn’t even exist before 1979, 1977, and 2002, respectively. And we still had education, energy, and security before these federal bureaucracies were created. Click the following links for well-reasoned articles (crafted by economists outside of the Paul campaign) supporting the elimination of such agencies: Department of Education, Department of Energy, Department of Homeland Security.

Former governor Huckabee got a chance to name three programs he would cut, but spent most of his time talking about getting rid of the IRS and replacing it with the fair tax. Like Paul, he also mentions the Department of Homeland Security. While axing the IRS would get rid of their $10 bn line item in the federal budget, one has to net out the costs of administrating the fair tax (presumably less than $10 bn) to know the exact reduction in spending Huckabee’s brand of income tax reform would provide. (As a reference point, the department of education is a $56 bn entity.) So Huckabee did at least a half-decent job answering the question (2 out of 3 ‘aint that bad), given the short time he had to respond. In fairness, Paul also favors eliminating the IRS, but would commensurately reduce federal spending rather than replacing it with another tax regime. Learn more about the Fair tax here.

Update: The Economist commented on Huckabee’s tax reform plan in last week’s issue:

“Mr Huckabee’s tax plan is as radical as it is ill-thought out. To achieve a populist goal—abolishing income tax—he proposes a federal sales tax. To make up for lost revenue, it would have to be a stiff one, and levied on practically everything. Mr Huckabee says a rate of 23% would suffice, but this is a sleight of hand. Calculated the way sales taxes usually are, the rate would have to be at least 30% and possibly much higher. This would be horribly regressive. Mr Huckabee says he can solve that problem by giving monthly rebate cheques to those who need them. But to track Americans’ income month by month would require a bureaucracy nearly as intrusive as the one Mr Huckabee hopes to abolish by repealing the income tax. The plan is a non-starter.”


One Response to “Will the GOP Reduce the Size of the Government?”

  1. Jack said

    Great question for the debate!

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