NOT STUPID, SIMPLE:

Imagine that the world's superpower reduces the size of government by a quarter over the next 30 years, even as its population grows by 50%. Imagine further that the superpower performs this miracle while dramatically increasing both the quality of public services and the nation's diplomatic clout. And imagine that the Republican Party leads this great revolution while uniting its manifold factions behind one of its favorite words: liberty.

Impossible? That is exactly what Britain, then the world's superpower and pioneer of the new economy, did in the 19th century. Gross revenue from taxation fell from just under £80 million in 1816 to well under £60 million in 1846, even as the population surged and the government helped build schools, hospitals, sewers and the world's first police force. The Victorians paid for these useful new services by getting rid of what they called "Old Corruption" (and we would call cronyism) and by exploiting the new technology of the day, like the railway. For these liberal reformers were the allies of the new commercial classes who were creating the industries that were transforming the world.

And they kept on cutting government for decades. William Gladstone, four times prime minister in the second half of the 19th century, believed in cutting taxes so that money could "fructify in the pockets of the people." Confronted with socialist protesters who demanded "no taxation without representation," the giant of Victorian liberalism replied that he believed in "no taxation" (something even Grover Norquist cannot match). He paid for his passion for social reform by a ruthless campaign against waste. The head of the Liberal Party prided himself on "saving candle ends and cheese-parings in the cause of the country," opening up every branch of government to competition. [...]

First, rip out cronyism. Between 1815 and 1870 British Liberals replaced a government based on patronage, sweeping aside the special privileges for the East India Company, West Indian sugar makers and British landowners. Today the American right's dirty secret is its love of big government, especially tax breaks for business (including sugar). The U.S. tax code has $1.6 trillion of exemptions, most of which go to the well-off.

Gladstone would get rid of them all--gradually, perhaps, with the concessions for health-insurance and mortgage interest--and in return chop income- and corporate-tax rates. Having helped dismantle Britain's protectionist Corn Laws in the 1840s, he would be astonished that America still doles out $30 billion a year in agriculture subsidies and employs 100,000 people in the Agriculture Department.

Second, concentrate the state on what it needs to do. Why does the federal government own 900,000 buildings and 260 million acres of land? Why does it continue to run utilities? Why are so many American airports still in public hands? Gladstone would concentrate money on the poor, targeting the welfare state for the rich. More money goes to the top 5% in mortgage-interest deduction than to the bottom 50% in social housing. He would set about reforming entitlements to make sure that they are fundable, for example raising the retirement age to 70 in line with life expectancy (as other countries like Sweden have done).

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