You Might Not Have to Pay More for Trump’s Spending Plans

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What a concept — surely foreign to most in government today — not having to pay more. Here is the Manhattan Institute’s Diana Furchtgott-Roth:

By increasing competition in providing services, Trump can lower costs.

People who watched President Trump’s address to Congress on Feb. 28 might have been forgiven for thinking Big Government was back in fashion, despite the Republican sweep of the White House and both chambers of Congress.

Trump said he would make health-care insurance — and health care itself — affordable; he would make inner cities a place for opportunity; he would boost infrastructure spending; and on and on.

Meanwhile, House Speaker Paul Ryan was sitting behind Trump, smiling and clapping, even though Ryan has always stood up for fiscal sobriety.

But Trump’s plans do not have to increase spending. Better education, health care and infrastructure can be achieved at a lower cost to the Treasury. A more competitive corporate tax code can attract businesses back, even to inner cities. And Trump has already proposed some cuts: The same day as his speech, he suggested cutting the State Department budget by 37%.

Of course, military spending, being in economic parlance a “public good,” is one of the few areas that spending would have to increase to get better results. But some former Army and Air Force officers I met this week from the University of Michigan’s Ross School of Business told me that there is room for more efficiency in the military as well.

Education

Let’s start with education. Trump wants to achieve higher standards through school choice, including public schools and charter schools. Competition raises the quality of the service without additional funds because lower-quality schools go out of business. Simply allowing the funding to follow the children to the schools that their parents choose will raise standards.

Competition in education has been shown to raise quality. In a study of charter schools in New York, Harvard professor Caroline Hoxby has shown the superior results of charter school education, accounting for the motivations of the parents. Going to a charter school from kindergarten through eighth grade closed the achievement gap between rich and poor students in mathematics, and eliminated two-thirds of the gap in English.

Read more: Manhattan Institute

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