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Let's Keep Our Growth Policy
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14227 |
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Section : |
CURRENT ISSUES
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| Issue
Date : |
7 / 1988 |
2,382 Words |
| Author
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Alvin Rabushka
Alvin Rabushka is a senior fellow at the Hoover Institution,
Stanford University. He is the author of several books on
U.S. tax policy. |
A common misconception holds that an emphasis on economic growth comes at the expense of equality and social justice. The alleged growth benefits the rich disproportionately, thereby increasing the gap between them and the poor. Nothing could be further from the truth. In reality, policies that nurture high rates of economic growth improve real living standards for all and bring about a more equitable society than policies that emphasize distribution.
In the rush to achieve equality in the distribution of income, people often forget that wealth must be produced before it can be distributed. Such an emphasis often leads to public policies that reduce incentives to work, save, invest, and take risks, thereby suffocating the economy. Low taxes, a minimum of government intervention in business and private affairs, and government practice of responsible fiscal, economic, and social policies provide a climate conducive to economic growth. High rates of economic growth, in their turn, create jobs and raise living standards.
Between 1982 and 1987, the United States achieved the greatest peacetime expansion in its history, creating 15 million new jobs in the process. This period was characterized by major reductions in tax rates, the deregulation of business, the curtailment of inflation, and the creation of an environment conducive to profitable investment.
The Welfare State Rises
The 1980s had to overcome the effects of a half-century of increased government intervention in the economy. The New Deal marked a watershed in American economic
... (1996 of 14532 Characters)
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