Michael Boskin, the former head President George Bush's Council of Economic Advisers, said last night that government bureaucracy stands in the way of economic growth.
"A highly bureaucratic, centralized, totalitarian manner of government cannot produce a successful economy," Boskin said.
"Decentralization is not an easy battle, especially when it deals with governmental regulation on local, state and national levels," he said.
Boskin, who is an economics professor at Stanford University, gave a speech titled "The Sense and Nonsense in American Economic Policy" to an audience of about 60 people in the Rockefeller Center for the Social Sciences.
Boskin discussed ways to decentralize the national government and decrease the national deficit while also balancing the federal budget.
Boskin said the United States has had a huge problem balancing the budget in the later part of the 20th century. He said since 1969, the federal budget has been balanced only once.
"The market now exists for politicians who are saying that they will balance the budget," Boskin said.
Boskin said a balanced budget is necessary to stimulate economic growth, and said the U.S. government must get its spending growth under control..
Boskin expressed mixed views on budget deficits in general. During recessions, Boskin said deficits are beneficial as government spending increases to help people hurt by the recession, while he said deficits are harmful during periods of growth.
Using charts and statistics, Boskin said both national and private savings rates have decreased in America within the past three decades. In contrast, America's competitors save and invest more than they do.
"Within the last half century, our growth rate has not been nearly as strong as in countries we compare ourselves to," Boskin said.
Boskin said he is against influencing the nation's savings rate with governmental economic reforms. This would produce a lower growth rate in U.S. standard of living, he said.
Boskin said he feels that the federal government should analyze economic policies to ensure a balance between the present and the future.
"We should slow the pace of governmental growth," Boskin said.
When discussing the federal government's present motives for balancing the budget in seven years instead of 10, Boskin said he thinks this plan will "tank the economy." "The transition between economic policies will hurt some people," Boskin said.
Boskin called for "bold plans" to be made for the future. He said most of these economic reforms need to be made by the early 21st century, before the baby--boomers head into deep retirement.
