Starve-the-beast
From Wikipedia, the free encyclopedia
Starve-the-beast or choke-the-beast is a conservative political strategy which uses budget deficits to force future reductions in government expenditure, especially spending on socially progressive programs. The term "beast" is used to denote government and the social programs it funds, including publicly-funded health care, welfare, and educational financial aid, the implication being that expenditure on such programs, or the programs themselves, is wasteful or destructive.
It appears the earliest reference to "starving the beast" as a doctrine was made during the Reagan administration by White House budget director David Stockman, to describe its fiscal philosophy.
A current example is the tax cutting policy of the Bush administration in the United States. He said on 24 August2001 "so we have the tax relief plan, which is important for fiscal stimulus, coupled with Social Security being off limits except for -- except for emergency. That now provides a new kind -- a fiscal straightjacket for Congress. And that's good for the taxpayers, and it's incredibly positive news if you're worried about a federal government that has been growing at a dramatic pace over the past eight years and it has been." [1]
A well-known U.S. proponent of the strategy is Grover Norquist. [2][3]
Some empirical evidence shows that the strategy may actually be counterproductive, with higher taxes actually corresponding to lower spending: "Controlling for the unemployment rate, federal spending [from 1981 to 2000] increased by about one-half percent of GDP for each one percentage point decline in the relative level of federal tax revenues." The article (written by William Niskanen and Peter Van Doren of the Cato Institute) shows that "a tax increase may be the most effective policy to reduce the relative level of federal spending," though the authors oppose tax increases for other reasons.[4]
Additionally, some economists and politicians see the budget deficits created by this strategy as harmful to the economy. The tax cuts of George W. Bush have far from cut government spending, has instead to record deficts.
