As a fiscal conservative I believe we should manage our state budget like any responsible person should manage her own personal expenses. In a typical year a small percentage of the budget should be put into reserve. When there are compelling reasons for a budget shortfall, the reserve can be drawn down without incurring a deficit. This is simple economics, but there is much more to economics than how to handle the budget.

There are always some issues, including some that prey on people's ignorance, fear, bias, or bigotry that politicians use as misdirection so the voters will not pay attention to the more important things. For many decades politicians used race baiting and fear mongering to prevent civil rights legislation and distract voters from other policies. Nixon launched the War on Drugs to win the presidency 1970. His scare tactic worked so well that we are still suffering from its devastating fallout. The War on Drugs created a crime wave that is still used by “law and order” candidates to enact even more ineffective or unjust policies, including mandatory sentencing laws. The bugaboo of socialism has been used to spook voters to give up economic advantages during the first Gilded Age, and again during the last several decades of the New Gilded Age. The scare tactic still works even though we live in a country that, according to conservative economist Milton Friedman, is about half socialist already. We have socialized programs that include the military, the intelligence agencies, Homeland Security, education, oil and nuclear industry subsidies, veteran affairs, the local, state, and federal highway system, Social Security, Medicare, and more. We may argue over how much to give each socialized program, but most people agree we need them. As a subsidized Dust Bowl farmer during the 1930s famously said about farm subsidies, “If this is socialism, I'll take it.”

It is not important what we call it. What is important is the efficiency of a system to deliver the highest good to greatest number. Striving to find that formula is characteristic of liberalism, and liberalism has made Western Europe and the U.S. what they are today. Americans are becoming less authoritarian, less dogmatic, and less bigoted. Increasingly they favor proposals for reform, are open to new ideas, and seek to make progress. They are also becoming more tolerant, broad–minded, and generous. In short, they are becoming the very definition of the word “liberal.” The Democratic Party has generally furthered the liberal agenda more than the Republican Party, even while many individuals within both parties may fall short and are susceptible to influence peddling – the scourge of our system. We must make it easy to be the best people we can be through the use of enlightened policies that transcend political parties. Economic considerations are at the heart of social policies, which is why politicians financed by special interests try so hard to get people to give up social programs by trying to evoke the specter of Communism.

I write about economic theory and policy in depth in the Economics chapter of my book.