As an addendum to my reactions to David Brooks’s column this morning, I’d like to add that there are a couple of other problems with his prescriptions. First, as long as the government at any level is taxing everything in sight and spending it, we won’t be saving. Saving means saving; it doesn’t mean government spending.
Second, there are other more effective ways to accomplish the objectives he set out than taxes. For example, if you want more saving and less consumption, stop taxing savings and capital gains. That would have the secondary benefit of not leading elected officials into temptation, the temptation of money sitting around that they’ve shown little ability to resist.
Mr. Brooks’s prescription isn’t really for more saving and investment and less consumption. It’s for no more saving and government investment and consumption, the technocrat’s solution. I can only conclude that he’s never heard of deadweight loss or that he believes that it’s a fable, like the Sandman or the Tooth Fairy.
