[...]Conservatives do not have economic ideas that are good for the middle class. Since the 1970s, wage gains have decoupled from productivity gains and the median family has therefore reaped a disproportionately small share of the benefits of growth. Conservatives are left without anything to say about this problem.
What can they say about it? I have a few ideas, though I don't think conservatives are likely to like any of them too much.
What does he talk about?
The redistribution of wealth. Go read that again, I'll wait.
Josh approaches this issue from a conservative slant, to be sure, and I could take issue with some of the details of his broadly outlined solutions like means-testing welfare programs (seems duplicative, for one thing), but on balance, he makes a strong case.
Lower taxes and smaller government *might* raise GDP. Certainly over the Bush administration, growth happened. It was anemic but measurable. That was with historically low taxes. Josh's point was that this concentrated wealth in the hands of the rich, while leaving scraps and crumbs for the rest of us.
No trickle down, in other words. Given that this is the single talking point any conservative can raise when talking about stimulating the economy, Barro is essentially pointing out that conservatives have nothing.
Couple that with the fact that the lion's share in the current government economic transfers programs have been in aid to the elderly, which are not means-tested or adjusted for other income, basically, it's giving more of your hard earned money to wealthier people in two separate scoops: original economic activity, plus benefits accrued from your taxes.