Steve Pearlstein, business columnist for the Washington Post, calls the current economic turmoil “the fading of the mirage economy.” He makes some good points that are undermined by statements like this:
One option is to raise taxes and leave less money for private spending, which is what many state and local governments have begun to do. The other is to accept lower levels of government service and subsidies, which inevitably will lower the incomes of some households while forcing others to go without services or pay for them privately. Either way, it amounts to a lower standard of living than we thought we had achieved.
Pearlsten demonstrates in this paragraph why government spend and tax plans – budgeted or bonded – are bad ideas, but less government spending on transfers, services, and subsidies not mean a lower standard of living.
