From an email I just sent to several friends:
Ok, folks, it's time for another of my patented long-term predictions.
Let's say that Obama gets even a small part of what he promised in the
SOTU. We're talking about massive distortions in incentives and even in
basic industrial efficiency. This guy wants to roll back the industrial
revolution, which would be the net effect of making energy vastly more
expensive and tripling taxes on driving.
My prediction is that the public sector will soak up a far higher
proportion of national production. I've never joined in the chorus of
"the Democrats want to make the US look like Europe circa 1980." But now
I think that's an entirely reasonable expectation. This year's federal
spending will be 26% of GDP, up sharply from the 20 to 22 percent that
we've had every year for decades. As soon as we get it up to 45 or 50
percent, we're in France territory.
And the reduction of free-market choices and incentives just about
everywhere will create the inefficiency that could get us there.
Americans voted to give the government the power to set our economic
priorities, and there's no unscrambling that egg. What they're getting
as part of the bargain is a way of spending that has structural
disincentives to reduce costs. That's why I'm thinking a 45% federal
share of the economy isn't an unreasonable endpoint.
What will the effect be on the private sector? That's the interesting part.
I'm expecting that every private business (which of course will have
government or government-connected entities among its primary customers)
will seek and find ways to operate with radically more efficiency, in
every imaginable way. That's where the flexibility and intellectual
power of America's business elite are going to go.
This could even result in some really interesting new tech
being developed. Business always does what it gets paid to do. In boom
times, that's expanding the top line. In bust times, it's doing more
with less. In a time of government revival, it's about doing a lot
more with a lot less.
This is going to be interesting in itself. And someday, maybe a
generation from now, maybe less, Obama's Paris-on-Potomac approach will
be thoroughly discredited. The people will disgusted by the waste, and
tired of having to get their health care and much else from people that
are no more responsive to their needs than the IRS, the DMV, or the Post
Office.
But by then, business and industry will have made the transition to
Radical Efficiency™. That's going to set us up for some major economic successes when the big-government days come to an end.
Yes but first we must get through the times of school children getting fed their government candy. It seems that there is an ever growing populace that wants someone to earn their daily bread for them. Growing masses of kids that were taught in the school the propaganda of government being their benefactor.
I have people e-mailing me pondering if it will be a revolution or civil war.
I hope neither!