Sunday, February 8, 2009

Miron: In Economics as in Medicine -- First, Do No Harm

Harvard economist Miron makes a list of measures that should be part of a modern, economically intelligent stimulus package, based on solid libertarian principles (HT Mankiw). Note how most of what he proposes is exactly the opposite of what the current administration is doing or trying to do. Here's his list of suggestions:
  • Repeal the corporate income tax
  • Increase carbon taxes while lowering marginal tax rates
  • Moderate the growth of entitlements
  • Eliminate wasteful spending
  • Withdraw from Iraq and Afghanistan
  • Limit union power
  • Renew the U.S. commitment to free trade
  • Expand legal immigration
  • Stop bailing out businesses that took on too much risk

He concludes with this smart statement:

It is tempting to believe that every problem has a solution, but the reality is not so nice. It is possible, even likely, that the best we can do is fix things we know how to fix, and then get out of the way. This may not ameliorate the current situation, but it avoids making things worse. In economics as in medicine -- first, do no harm.

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