Losing the War At Home

America won the cold war but lost a war at home.

The victory left a domestic field of broken promises in education, crime control, and living standards.

That's how Michael H. Cosgrove sees things in "The Cost of Winning: Global Development Policies and Broken Social Contracts" (Transaction Publishers, 317 pp., $34.95). The University of Dallas economist paints an America in economic decline relative to other nations, yet continuing its wealth-sharing policies at home and abroad.

His controversial views make for stimulating reading, the kind that turns many money managers to Cosgrove's Econoclast newsletter.

Early in the cold war, he writes, several policies worked both to contain the Soviet Union and boost American living standards. These included a defense buildup, free trade, and the Marshall Plan for European recovery.

But when President Nixon broke the US dollar's tie to gold in 1971, and an Arab oil embargo followed in 1973, things started to go wrong.

Americans, like the British in the 1940s, turned more and more to government to fill a gap between expectations and what the private sector could deliver.

Cosgrove laments the size of government: "Key societal and community values such as family, the educational process, and safety can't seem to adapt to the many changes thrust upon them by government." So basic institutions are eroding.

Cosgrove also highlights problems often ignored by conservatives: the weak purchasing power of workers and the loss of good-paying jobs.

Some of his solutions?

* Congress would meet only four months a year at different locations.

* Use bounty hunters to privatize the capture of alleged criminals.

* Replace the federal income tax with a tax on all transactions.

* Implement school choice.

* Privatize Social Security. Eliminate cost-of-living adjustments, creating an army favoring zero-inflation.

Few of his ideas would win approval. But some are worth considering, such as eliminating taxes for businesses locating in low-income areas.

* David R. Francis is the Monitor's senior economics correspondent.

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