Recently I was asked a series of questions by a journalist wishing to write an article about the nation’s current economic situation. What follows in this article and others following is one of those questions and my answer to it.
When talking about government spending (and tax cuts, for that matter), is it important to maintain a high level of transparency? To avoid pork-barrel projects? Can that be done? How? How can those needs be balanced with a need to act quickly (if such a need indeed exists)?
The only difference between pork barrel projects and non-pork projects is whether the spending is directly voted on or not. Is a bridge to nowhere pork? Is the construction of a university building by the government pork? Is a light rail system pork? Yes, if the expenditures were legislated without direct vote by Congress. To say pork is wasteful and non-pork is not, misses the point. All government spending is wasteful because it takes money out of private hands, away from those who labor and create it thereby reducing their incentive to labor and create more.
The government of the US and the government of Arizona could stimulate the respective economies most by cutting taxes: cutting personal taxes and instituting some form of consumption tax to replace the income tax; cutting corporate taxes and instituting some form of flat tax. The US government should immediately cut corporate taxes below the levels in Ireland, Ukraine, Georgia, the Czech Republic, Poland, and Hong Kong, the nations with the lowest tax rates. The state of Arizona should cut corporate taxes to the lowest rate in the country. The lower taxes will stimulate private investment; it will attract businesses to the US and to Arizona. It will work better and much quicker than spending on zoos, roads, or other so-called infrastructure.