Greenspan has a mania about inflation. If reducing the size of government is the desideratum, a time of almost non-existent inflation is a good time to do it. I am in favor of letting people use the money to reduce their personal indebtedness, which is much too high, and addressing the problem of Social Security through gradual privatization, with a residuum of means tested programs as a safety net.
I am not interested in the size of government relative to GDP, but in the absolute size of government. The only way we are going to move in that direction, frankly, is to defund it.
It is sound policy to cut taxes during a downturn assuming that the level of spending remains constant on the part of the government. In essence, it is using borrowing for pump priming. Otherwise, it only boosts a particular sector, while other sectors languish. Retiring debt would have the same effect as a tax cut, by putting more money into private hands, by the way......... |
