Can the middle class be rebuilt?
What Should Government Do? Less

iStockphoto/DanielKrylov

Article Highlights

  • America's true social safety net is with charitable giving

    Tweet This

  • At this point, there's not much #Obama can do

    Tweet This

  • What the middle class needs most is more of what it already does so well

    Tweet This

As a foundation for the middle class, good jobs, stable families and individual creativity are hard to beat. America didn't generate the strongest middle class in history by having lots of bureaucrats and rules but by having few of them, creating a chaotic economy in which college dropouts become C.E.O.'s and seemingly only political offices are handed down father-to-son.

Yet today's economy looks bleak. Recessions born from the financial system are particularly tough to shake. Nearly $1 trillion in fiscal stimulus and hundreds of billions more in Federal Reserve action have failed to revive growth. It is hard to believe the president has been saving the real solutions until now.

Indeed, policy errors helped put us here and will hinder the recovery. High corporate taxes cost jobs and wages. Housing policies tell banks to issue low-down-payment mortgages that lead to defaults. Entitlement programs encourage middle-class Americans to save less for retirement. Federal tax law boosts health spending that saps wages and drives inequality. Public employee pay is excessive and bad school teachers are impossible to fire. Welfare encourages rising illegitimacy, creating new generations of poverty. It's not the rich who suffer from misguided social engineering.

"America didn't generate the strongest middle class in history by having lots of bureaucrats and rules but by having few of them." -- Andrew Biggs

It seems unlikely that the president has been saving the real solutions until now. There is not much he can do.

But America's true social safety net remains strong, with charitable giving multiples higher than other countries (and highest among conservative and religious households). Americans give even more through their inventive entrepreneurialism, producing not just automobiles and iPhones but also meaningful, creative jobs building these products. And, contrary to the left's entitlement mind-set, Americans are happiest when they earn what they receive. What the middle class needs most is more of what it already does so well.

Government has been calling the plays while ordinary Americans ride the bench. But when the game is on the line, it's time to give the real playmakers the ball. The answer to too much government isn't more government.

Andrew G. Biggs is a resident scholar at AEI.

Also Visit
AEIdeas Blog The American Magazine
About the Author

 

Andrew G.
Biggs

What's new on AEI

Expanding opportunity in America
image Moving beyond fear: Addressing the threat of the Islamic state in Iraq and Syria
image Foreign policy is not a 'CSI' episode
image The Air Force’s vital role
AEI on Facebook
Events Calendar
  • 21
    MON
  • 22
    TUE
  • 23
    WED
  • 24
    THU
  • 25
    FRI
Monday, July 21, 2014 | 9:15 a.m. – 11:30 a.m.
Closing the gaps in health outcomes: Alternative paths forward

Please join us for a broader exploration of targeted interventions that provide real promise for reducing health disparities, limiting or delaying the onset of chronic health conditions, and improving the performance of the US health care system.

Monday, July 21, 2014 | 4:00 p.m. – 5:30 p.m.
Comprehending comprehensive universities

Join us for a panel discussion that seeks to comprehend the comprehensives and to determine the role these schools play in the nation’s college completion agenda.

Tuesday, July 22, 2014 | 8:50 a.m. – 12:00 p.m.
Who governs the Internet? A conversation on securing the multistakeholder process

Please join AEI’s Center for Internet, Communications, and Technology Policy for a conference to address key steps we can take, as members of the global community, to maintain a free Internet.

Thursday, July 24, 2014 | 9:00 a.m. – 10:00 a.m.
Expanding opportunity in America: A conversation with House Budget Committee Chairman Paul Ryan

Please join us as House Budget Committee Chairman Paul Ryan (R-WI) unveils a new set of policy reforms aimed at reducing poverty and increasing upward mobility throughout America.

Event Registration is Closed
Thursday, July 24, 2014 | 6:00 p.m. – 7:15 p.m.
Is it time to end the Export-Import Bank?

We welcome you to join us at AEI as POLITICO’s Ben White moderates a lively debate between Tim Carney, one of the bank’s fiercest critics, and Tony Fratto, one of the agency’s staunchest defenders.

Event Registration is Closed
No events scheduled this day.
No events scheduled this day.
No events scheduled this day.
No events scheduled this day.
No events scheduled this day.