You know Fareed Zakaria?s prescription for the nation?s economic ills will be a bit loopy when the second paragraph starts with this sentence:
I’m betting that, in the end, the world’s governments will win this battle against fear.
Not people, not businesses. Only governments will ?win this battle.? As you might expect, Zakaria focuses on increased regulation and government policies that will ?redirect [resources] in more-productive ways.?
Still, he makes the occasional good point, as in his characterization of governments gone wild:
But the average American’s behavior was virtue itself compared with the government’s. Every city, every county and every state has wanted to preserve its many and proliferating operations and yet not raise taxes. How to square this circle? By borrowing, using ever more elaborate financial instruments. Revenue bonds were backed up by the prospect of future income from taxes or lotteries. “A growing trend is to securitize future federal funding for highways, housing and other items,” says Chris Edwards of the Cato Institute. The effect on the projects, he points out, is to make them more expensive, since they incur interest payments. Because they “insulate the taxpayer from the cost”?all that needs to be paid now is the interest?they also tend to produce cost overruns.
Anyone familiar with the debt-laden North Carolina budget will likely recognize the problems Zakaria and Edwards describe.
One wonders why those problems fail to dissuade Zakaria from placing such trust in the ability of government to overcome our current woes.
