The documentary We’re Not Broke went viral on Reddit. The synopsis is that the Republicans are wrong about America being broke, and that there would be more money for social programs and infrastructure if tax loopholes and other problems were fixed.
Despite being on the right, I agree with the ‘left’ that America is not broke. And up until 2007 or so, many Republicans also shared this sentiment until the debt hysteria took over, which puts me in a very small minority among the alt-right. But that’s where the agreement ends. Whereas the left wants more money for social programs and welfare, I support supply-side policy that broadens the tax base and spurs innovation by helping America’s best and brightest, as well as policy that keeps America safe, which is summarized below:
How the left wants to spend money:
Indiscriminate education spending, universal pre-k
Free tuition for everyone, student loan forgiveness
Indiscriminate entitlement spending
Universal basic income
More money for gifted education
Reduced or free tuition for high-ROI majors (STEM) and or high-IQ students, who have the greatest likelihood of not dropping out
High-IQ basic income
Investment in high-tech, high-IQ companies (like Tesla and biotech, for example)
Defense spending to protect America’s economic interests. If America cannot defend itself, society will regress to the level of its aggressors.
Targeted healthcare (As America’s population ages, it’s possible public healthcare costs will spiral out of control more than they already have. Thus, costly procedures may have to be prioritized to individuals who provide the most economic value. Therefore, all else being equal, a high-IQ person, who provides more value to society, would have priority over a lower-IQ person, who contributes less. The idea is pubic healthcare expenditures should be allocated in such as way that it provides the highest ROI. An example of rationing that occurs today are organ transplant waiting lists. A solution is to sort the list not just by urgency but also IQ, with smarter people having priority over the less intelligent.)
The problem is not America’s debt or spending; it’s how money is being spent. In choosing between indiscriminate spending, versus spending that is targeted in such a way that it provides a high ROI (the optimal allocation of resources), the choice should be obvious. This is where I part with the Mises/Austrian school of economics in that debt is not bad always bad, especially when a country has reserve currency status* as America obviously does.
In the 90′s, Bill Clinton and Al Gore, to their credit, understood that government investments in information technology would pay dividends, but today’s left, rather than supporting pro-growth policy, instead attack technology for causing wealth inequality and displacing jobs.
*America is kinda in a sweet spot : if the economy is sluggish, the flight to safety causes rates to plunge as we saw in 2008 and 2011. If growth overheats, the growth will be enough to offset the higher interest rate payments. Japan has been in the former scenario for decades without any problems. If Japan, which has slower growth, worse demographics, and a much higher debt/GDP ratio, can avoid crisis, America, which is economically better in pretty much every way, certainly will, too. Emerging markets have the opposite problem: negative inflation adjusted growth, high interest rates, and capital flight during economic weakness. Furthermore, the surging US dollar is more evidence of the post-2008 flight-to-quality trend. With the exception of China, the rest of the world is economically in much worse shape than America.