Some More Thoughts on Starve the Beast
Since Andrew Ferguson cited my research in his Weekly Standard article about William Niskanen and “starve the beast,” I thought I would add some commentary. First, my 2009 Cato Journal article went beyond extending the Niskanen’s dataset to the Bush presidency. I made it a point to analyze categories of spending, specifically non-defense discretionary spending, that I thought would be especially sensitive to fluctuations in federal revenue. My results indicated that reductions in federal revenue did little to reduce even non-defense discretionary spending.
The discussion that Noah, Jonah, Patrick, and Ramesh are having about the distribution of the tax burden and the general public’s sensitivity to higher taxes is an important one. In particular, Ramesh’s thought experiment raises some interesting questions. The one weakness with both my study and Niskanen’s study is that we only analyze the short-term effects of revenue reductions. It is possible that a sustained period of lower revenues may well result in decreases in expenditures. That said, by demonstrating that tax cuts fail to correlate with short-term reductions in federal expenditures, Niskanen made a very valuable contribution to the debate over “starve the beast.”