Starve-the-beast
From Free net encyclopedia
Starve-the-beast or choke-the-beast is a conservative political strategy which uses budget deficits to force reductions in government expenditure, especially spending on social security programs. The term "beast" is used to denote government and the social programs it funds, including publicly funded healthcare and welfare, the implication being that expenditure on such programs, or the programs themselves, is wasteful or destructive.
It appears the earliest reference to "starving the beast" as a doctrine was made during the Reagan administration by White House budget director David Stockman, to describe its fiscal philosophy.
Some empirical evidence shows that the strategy may actually be counterproductive, with higher taxes actually corresponding to lower spending: "Controlling for the unemployment rate, federal spending [from 1981 to 2000] increased by about one-half percent of GDP for each one percentage point decline in the relative level of federal tax revenues." The article (written by William Niskanen and Peter Van Doren of the Cato Institute) shows that "a tax increase may be the most effective policy to reduce the relative level of federal spending," though the authors oppose tax increases for other reasons.[1] Additionally, some economists and politicians see the budget deficits created by this strategy as harmful to the economy.