US President-elect Donald Trump has announced a big building programme of schools, roads and hospitals. How is he going to do that while cutting back on government spending, as promised?
You cannot look at Trump’s proposals as a coherent set of government proposals. They don’t add up. He said he’s going to increase spending on infrastructure, cut VAT of course, cut taxes and cut the deficit. Now, what he doesn’t understand is that over the last quarter of a century we’ve cut back on the size of the government bureaucracy – those grey bureaucrats that get so badly maligned – and we’ve become pretty efficient.
Actually, in the previous presidential election, Mitt Romney got into trouble because he started criticising government employees. But it turned out everybody loves their fireman, their policeman, the military, social security, Medicare. And then, when you start talking about their teachers, all the things they love, that’s government.
So, there just isn’t enough fat to cut.
America is on its way to become an inherited plutocracy: just the opposite of the American Dream, the idea that everybody starts on a level footing and gets ahead through their own efforts. We all knew that there was a little bit of exaggeration in that kind of characterisation. But this [tax reform] would say: we’ve given up on that dream.