The Policy Option Not Taken

A blog about business and economics.
April 3 2013 5:13 PM

The Policy Option Not Taken—Cut Spending to Cut Taxes On The Masses

In national politics, the Democratic Party's basic orientation is pretty clear. Tax the rich to fund social services for the working- and middle classes. Republicans, meanwhile, are committed to the opposite policy. Rescind services from the poor and the middle class in order to cut taxes on the rich. That's the conservative alternative to Obamacare—you get worse health insurance and rich people get the Affordable Care Act's tax increases reversed. 

It's not much of a sales pitch. But this debate leaves off the table a third option that ought to be considered more frequently in America—cut spending in order to cut taxes on the masses.

Like maybe instead of subsidized health insurance premiums and college tuition we should give people money. Money can be used to pay college tuition. But it can also be used to pay for a vacation. Colleges would have to make the case that their educational offerings are more valuable than a great vacation. Conservatives, more broadly, could challenge liberals to a real debate about the value proposition of government services. But as long as the conservative alternative to funding public services is to cut taxes on the rich amid record (and growing!) income inequality, which makes for a very unappealing alternative to even public services that aren't particularly useful to anyone.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.



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