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Archive for the ‘Leviathan’ Category

A few years ago, I shared a satirical divorce decree that would allow conservatives and liberals to amicably separate into two different countries.

This seemed like a good idea, particularly since another piece of satire suggested that Canada was being overrun by statists who were upset by the Tea Party election of 2010.

And don’t forget that I wrote a serious column in 2012 speculating whether advocates of limited government should be the ones moving north instead.

But rather than divorce or mass emigration, what if we could resolve our differences and live together in peace and tranquility?

Y’all may be thinking I’m smoking some of that stuff that libertarians want to legalize, but I want to make a serious point.

Or, to be more specific, I want to test whether our statist friends are serious.

I’m motivated by this presumably legitimate Facebook message. It’s designed, I’m guessing, to poke fun at conservatives who utilize government while simultaneously complaining about government.

Having read this diatribe, I want to make two points, and then end with a proposal.

My first point is that many of the supposed benefits of government would exist even if the public sector disappeared tomorrow.

There are some government-owned utilities, but I think we all recognize that most electricity is generated by the private sector.

Private satellite companies and private news companies would provide weather forecasts in the absence of NOAA and NASA.

Private food companies and private drug companies would have big incentives to provide safe products in the absence of government inspections.

People would know how to tell time without the government.

Auto companies would have every reason to produce safe cars even if there was no regulation.

I could continue, but you get the point.

Which brings me to my second point. The person who put together this screed conveniently left out the programs that account for the lion’s share of government spending.

Why doesn’t the author include agriculture programs?

Why doesn’t the author include the Ponzi Scheme otherwise known as Social Security?

Why doesn’t the author include all the money spent to subsidize other nations’ defenses?

Why doesn’t the author include bankrupt and counterproductive health care entitlements such as Obamacare, Medicare, and Medicaid?

Why doesn’t the author include the Department of Housing and Urban Development?

Why doesn’t the author include the corporate welfare at the Department of Commerce?

Why doesn’t the author include the welfare programs that trap people in dependency?

Why doesn’t the author include unemployment insurance payments that subsidize joblessness?

I could continue, but you get the point.

Which brings me to my proposal.

I’m guessing that the person who put together the diatribe wanted to make the point that there are some activities of government that produce value. And even though I think he is generally wrong to imply that these things wouldn’t happen without government, I’m willing to bend over backwards in the interests of reaching a deal.

So here’s a challenge for our friends on the left: If the author agrees to get rid of the programs he doesn’t include, I’ll agree to keep all the programs he does mention.

In other words, let’s have a compromise, which is what they recommend in all the articles about relationships. Both sides meet in the middle.

Yes, I know that means too much government, but it also means that the public sector would be a far smaller burden than it is today. Indeed, I would be surprised if the total burden of government spending exceeded 10 percent of our economic output under this proposed agreement. Which would put us somewhat close to the growth-maximizing size of government.

And don’t forget that this compromise also means that the already-legislated expansions in the burden of government spending presumably wouldn’t happen.

So my proposal doesn’t mean libertarian utopia. But it also means we don’t suffer welfare state dystopia.

Now we just have to see whether our statist friends will accept this proposed peace agreement.

Or will we find out that they’re the hypocrites, not the folks who post comments on Fox News and Free Republic?

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When I give speeches around the country, I often get asked whether it’s time to give up.

More specifically, has America reached a tipping point, with too many people riding in the wagon of government dependency and too few people creating wealth and pulling the wagon in the right direction?

These questions don’t surprise me, particularly since my speeches frequently include very grim BIS, OECD, and IMF data showing that the long-run fiscal problem in the United States is larger than it is in some nations that already are facing fiscal crisis.

But that doesn’t mean I have a good answer. I think there is a tipping point, to be sure, but I’m not sure whether there’s a single variable that tells us when we’ve reached the point of no return.

Is it when government spending consumes 50 percent of economic output? That would be a very bad development if the burden of government spending reached that level, but it’s not necessarily fatal. Back in the early 1990s, the public sector was that big in Canada, yet policy makers in that country were able to restrain budgetary growth and put the country on a positive path. Sweden is another nation that has turned the corner. Government spending peaked at 67 percent of GDP in the early 1990s, but is now down to 47 percent of GDP after years of free-market reforms.

Is it when a majority of households are getting government handouts? That’s also a worrisome development, especially if those folks see the state as a means of living off their fellow citizens. But taking a check from Uncle Sam doesn’t automatically mean a statist mindset. As one of my favorite people opined, “some government beneficiaries – such as Social Security recipients – spent their lives in the private sector and are taking benefits simply because they had no choice but to participate in the system.”

Is it when a majority of people no longer pay income taxes, leaving a shrinking minority to bear all the burden of financing government? It’s not healthy for society when most people think government is “free,” particularly if they perceive an incentive to impose even higher burdens on those who do pay. And there’s no question that the overwhelming majority of the tax burden is borne by the top 10 percent. There’s little evidence, though, that the rest of the population thinks there’s no cost to government – perhaps because many of them pay heavy payroll taxes.

I explore these issues in this interview with Charles Payne.

The main takeaway from the interview is that the tipping point is not a number, but a state of mind. It’s the health of the nation’s “social capital.”

So for what it’s worth, the country will be in deep trouble if and when the spirit of self-reliance becomes a minority viewpoint. And the bad news is that we’re heading in that direction.

The good news is that we’re not close to the point of no return. There is some polling data, for instance, showing that Americans still have a much stronger belief in liberty than their European counterparts.

And we’ve even made a small bit of progress against big government in the past few years.

I speculated in the interview that we probably have a couple of decades to save the country, but it will become increasingly difficult to make the necessary changes – such as entitlement reform and welfare decentralization – as we get closer to 2020 and 2030.

Welfare State Wagon CartoonsAnd if those changes don’t occur…?

That’s a very grim subject. I fully understand why some Americans are thinking about the steps they should take to protect their families if reforms don’t occur and a crisis occurs.

Indeed, this to me is one of the most compelling arguments against gun control. If America begins to suffer the chaos and disarray that we’ve seen in nations such as Greece, it’s better to be well-armed.

Though maybe there will be some nations that remain stable as the world’s welfare states collapse. And if emigration is your preferred option, I’d bet on Australia.

But wouldn’t it be better to fix what’s wrong and stay in America?

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If you don’t like the NSA collecting and monitoring all your communications, you probably won’t be thrilled about new technologies that will give government power to monitor where you drive and control how you drive.

Let’s look at a couple of options and then ponder which is more offensive.

We’ll start with government monitoring of where you drive. Here’s part of what Holman Jenkins wrote for the Wall Street Journal.

…the real threat to our autonomy gathers speed. “Autonomous” vehicles are part of the threat—because they won’t be autonomous at all. This column has warned for years about plate-recognition cameras, increasingly armed with face-recognition capabilities, that will make it impossible to go anywhere or do anything in public without being monitored. …The population is aging. An older, more timid society is likely to be in favor of penning up fellow citizens in a mesh of monitoring to regulate routine behavior. The authoritarianism of the weak, always a problem in society, will find an ally in the bureaucracy’s craving for resources.

Holman cites a few examples.

Traffic cameras…overwhelmingly ring up drivers for offenses that wouldn’t trouble a cop. New Jersey is just the latest state scandalized by discovery that yellow lights are set below the state minimum in order to yield more red-light camera tickets. …In some future discrimination or hate-crime lawsuit, will vehicle records be called up to show you locked your doors in a minority neighborhood but not in a white neighborhood? Will the state decide to raise your ObamaCare copays because a face-recognition camera also recognized a cigarette dangling from your lip? When our every action in space and cyberspace can be monitored and policed, we no longer police ourselves to any meaningful extent. We become not citizens but children. The state is our parent. The real threat is that many of our fellow citizens will like it this way.

This sounds very Orwellian and very bad, but there are other ways for government to make driving an unpleasant experience.

Let’s see what the UK-based Daily Mail is reporting about an obnoxious European proposal to give government control over your gas pedal.

Drivers face having their cars  fitted with devices that slam on the brakes if they go over the speed limit, under draconian new road safety measures being drawn up by  officials in Brussels. All new cars would have to include camera systems that ‘read’ the limits displayed on road signs and automatically apply the brakes. And vehicles already on the road could even be sent back to garages to be fitted with the ‘Big Brother’ technology… The EC’s Mobility and Transport Department hopes to roll out the ‘Intelligent Speed Adaptation’ technology (ISA) as part of a new road safety programme.

And how will this big-brother system work?

The ISA technology works in one of two ways – either through satellites, which communicate limits automatically to cars from databases, or by using cameras to read road signs. It then deploys one of three controls to slow drivers: ‘advice’, in which the motorist is simply notified of the speed limit by an alarm, giving them the opportunity to slow down; ‘driver select’, which arrests the car’s speed but gives the driver the option of disabling the device; or ‘mandatory’, which would not let a driver breach the speed limit under any circumstances. …A spokesman for the AA said at lower speeds the new technology could actually create dangers. He said: ‘If you were overtaking a tractor and suddenly needed to accelerate to avoid a head-on collision, you would not be able to.’

I’m glad people from the Automobile Association are warning that the system poses risks, but opposition should be based on more than utilitarian arguments. How about the freedom to be left alone and not monitored and pestered while you travel?

But let’s set that issue aside and contemplate whether it’s worse to have the government track where you drive or worse to have the government control how you drive.

Maybe this makes me a bad libertarian, but I’m not overly worried about the first option. Perhaps this is because I have a relatively staid life. I drive to work and I drive to softball. Every so often, I drive to the grocery store or to an airport. The bureaucrats tracking me would go crazy with boredom. Heck, I’d probably feel some pressure to spice up my social life simply because I’d feel sympathy for them.

Maybe they’ll force us to drive green cars?

By contrast, I would be very irritated if the government got control over my accelerator. It’s already annoying that revenue-hungry local governments and anti-automobile greenies conspire to set speed limits considerably below safe and efficient levels. But at least there’s very little risk if you drive within 10 miles of the limit and you always have the choice to drive even faster if you’re willing to take a chance that some random cop will pull you over. But if the government imposes some system that forces my car to stay within the speed limit, I won’t be a happy camper.

I’ll be very curious to read the comments for this post. In the meantime, I’m going to close with a few optimistic words.

Simply stated, government may have the technology to spy on us, but that doesn’t mean they have the brains, ability, or manpower to make much use of this power.

Money laundering laws are a good example. It’s rather offensive that the government has set up a system that forces banks and other financial institutions to spy on all of our financial transactions.

But other than imposing high costs on the financial sector, this system doesn’t have much impact on the average person. To be sure, some poor people lose access to the financial system. And, yes, there are horror stories about people who have their accounts frozen because they’ve engaged in an unusual transaction, but most of us will live our lives without ever noticing that the government has created this Orwellian regime.

Likewise, I don’t think the monitoring and collection of traffic data will impact our lives. At least not until the point the government uses its power in some of the ways described by Holman Jenkins. But I don’t think that’s going to happen anytime soon.

I’m also somewhat hopeful that car-control technologies won’t get abused. At least not right away. Local governments, for instance, would probably oppose a system to control travel speeds for the simple reason that they want to maintain the revenue from speeding tickets.

Moreover, I bet many Americans would rise up in revolt if the government tried to take control of our gas pedals. Politicians who pushed for such a scheme would lose election and bureaucrats who tried to impose such a system via regulation would get slapped down.

We’ve lost some of our freedoms and fighting spirit, but there are some lines the government still can’t cross. Driving faster than the government allows is as American as apple pie.

P.S. Speaking of American traditions, what about the young (and not-so-young) people who sometimes do a bit of romancing while in their cars? Maybe the bureaucrats (motivated by this Obama-NSA joke) will insist that we also install internal cameras in our vehicles.

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I’m not sure I could pick out a significant victory for human freedom in 2012.

Maybe I’m missing something, but the only good policy that’s even worth mentioning was the decision in Wisconsin to rein in the special privileges and excessive compensation for government workers.

But there definitely have been lots of sad developments.

The hard part is picking the most disappointing story.

1. Was it the craven decision by John Roberts to put politics before the Constitution and cast the deciding vote for Obamacare? This certainly could be the most disappointing event of the year, but technically it didn’t represent a step in the wrong direction since the Supreme Court basically gave a green light to unlimited federal power back in the 1930s and 1940s. The Obamacare case is best characterized as a failure to do the right thing. A very tragic decision, to be sure, but it maintained the status quo.

2. Was it the lawless decision by the Internal Revenue Service to impose a horrible regulation that forces American banks to put foreign law above U.S. law? This was a very bad development in the battle for tax competition, financial privacy, and fiscal sovereignty. But in the grand scheme of things, it’s just another in a long line of policies (such as FATCA) designed to increase the power of governments to impose and enforce bad tax policy.

3. Was it the Japanese government’s decision to double the value-added tax? I’m definitely not a fan of adding a VAT on top of the income tax, but Japan made that mistake years ago. The choice to increase the tax rate just shows why it’s dangerous to give politicians any new source of revenue. So this isn’t the worst policy development of 2012, particularly since the new Japanese government may suspend the tax hike.

4. Was it the delusional decision by 54 percent of California voters to impose a big, class-warfare tax hike? I thought the vote for Prop 30 was a very troubling development since it signaled that voters could be tricked into enacting class-warfare tax policy, even though they should have realized that more revenue for the state’s politicians would simply exacerbate the eventual fiscal collapse. But since I think this will be a learning experience on what not to do, I can’t put this at the top of my list.

5. Was it the French government’s punitive decision to impose a 75-percent top tax rate? This is a spectacularly misguided policy, and it’s already resulting in an exodus of entrepreneurs and other successful people. But just as I enjoy have California as a negative role model, I like using France as an example of bad policy. So it would be a bit hypocritical for me to list this as the worst policy of 2012.

6. Or was it the envy-motivated decisions by politicians in both Slovakia and the Czech Republic to replace flat tax systems with so-called progressive tax regimes? This is a strong candidate for the worst policy of the year. It’s very rare to see governments do the right thing, so it’s really tragic when politicians implement good reforms and later decide to reinstate class-warfare policies.

All things considered, I think this last option is the worst policy development of 2012. To be sure, I’m a bit biased since my work focuses on public finance issues and I’ve spent 20 years advocating for tax reform.

But I think there’s a strong case to be made, by anyone who believes in freedom, that politicians from Slovakia and the Czech Republic deserve the booby prize for worst public policy development of 2012.

Alvin Rabushka, sometimes referred to as the Father of the Flat Tax , summarizes the grim news.

On December 4, 2013, the center-left parliament of Slovakia modified the country’s historic 19% flat-rate tax…  Effective January 1, 2013, the income tax rate for corporations was raised from 19% to 23%, while that on individuals earning more than €39,600 (€1=$1.30) a year was raised to 25%, thereby creating two brackets of 19% and 25%. …On November 7, 2012, the lower house (Chamber of Deputies) of the national parliament approved a proposal to impose a second higher rate of 22% on annual income exceeding Czech Koruna (CZK) 100,000 ($5,200) per month.  President Vaclav Klaus signed the bill on December 22, 2012, which will take effect on January 1, 2013.

What’s especially depressing about these two defeats is that the supposedly right-wing parties deserve the blame.

Two nations filled with brain-dead conservative politicians

In Slovakia, all but one of the right-leaning parties in the old government decided to support the Greek bailout, leading to the collapse of the government and the election of a new socialist government that then sabotaged tax reform.

And in the Czech Republic, the current right-of-center government decided to scrap the flat tax for “fairness” reasons. I’m sure that will really be comforting to the Czech people as the economy suffers from less growth.

To understand what the people of those nations are losing, here’s my video on the flat tax.

Now for a bit of good news. There are still more than 25 flat tax jurisdictions in the world, including two of my favorite places – Hong Kong and Estonia.

So there are still some pockets of rationality. It’s just very unfortunate that the scope of human liberty is getting smaller every year.

P.S. The absolute worst thing that happened in 2012, if we look beyond public policy, was Georgia falling 4 yards short of beating Alabama in the Southeastern Conference Championship.

P.P.S. Speaking of sports, the best thing about 2012 occurred in Virginia Beach back in October.

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Over the past few years, I’ve shared a handful of images that capture the essence of government.

Now I have something new to add to the list – an image showing the evolution of government.

Evolution of Government

I’m not quite sure what the next-to-last image is supposed to specifically convey, but the clear message throughout is that government means coercion.

And that coercion doesn’t become legitimate merely because 51 percent of the population decides to plunder 49 percent of the population.

Which is perfectly shown by the final image, which accurately portrays today’s system of government and the IRS.

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I’ve written, ad nauseum, about the economic impact of excessive government spending.

But I’ve also acknowledged that Article I, Section VIII of the Constitution grants specific powers to the federal government.

What I’ve neglected to explore, though, is the key issue of how today’s bloated welfare state interferes with and undermines the government’s ability to competently fulfill its legitimate responsibilities.

Imagine, for instance, if we had the kind of limited federal government envisioned by the Founding Fathers and the “best and brightest” people in government – instead of being dispersed across a vast bureaucracy – were concentrated on protecting the national security of the American people.

In that hypothetical world, I’m guessing something like the 9-11 attacks would be far less likely.

I’m mostly thinking about reducing the inefficiency and incompetence of Washington, but the same principle applies to other levels of government.

Using lots of humor and sarcasm, Mark Steyn elaborates on this issue.

In political terms, Hurricane Sandy and the Benghazi consulate debacle exemplify at home and abroad the fundamental unseriousness of the United States in the Obama era. …John Brennan, the Counterterrorism guy, and Tony Blinken, the National Security honcho, briefed the president on the stiff breeze, but on Sept. 11, 2012, when a little counterterrorism was called for, nobody bothered calling the Counterterrorism Security Group, the senior U.S. counterterrorism bureaucracy. …our government is more expensive than any government in history – and we have nothing to show for it. …one Obama bill spent a little shy of a trillion dollars, and no one can point to a single thing it built. “A big storm requires Big Government,” pronounced The New York Times. But Washington is so big-hearted with Big Government it spends $188 million an hour that it doesn’t have – 24 hours a day, seven days a week, including Thanksgiving, Christmas and Ramadan. And yet, mysteriously, multitrillion-dollar Big Government Obama-style can’t doanything except sluice food stamps to the dependent class, lavish benefits and early retirement packages to the bureaucrats that service them, and so-called government “investment” to approved Obama cronies. …Last week, Nanny Bloomberg, Mayor of New York, rivaled his own personal best for worst mayoral performance since that snowstorm a couple of years back. This is a man who spends his days micromanaging the amount of soda New Yorkers are allowed to have in their beverage containers rather than, say, the amount of ocean New Yorkers are allowed to have in their subway system – just as, in the previous crisis, the municipal titan who can regulate the salt out of your cheeseburger proved utterly incapable of regulating any salt on to Sixth Avenue. Imagine if this preening buffoon had expended as much executive energy on flood protection for the electrical grid and transit system as he does on approved quantities of carbonated beverages. But that’s leadership 21st-century style: When the going gets tough, the tough ban trans fats. Back in Benghazi, the president who looks so cool in a bomber jacket declined to answer his beleaguered diplomats’ calls for help – even though he had aircraft and Special Forces in the region. Too bad. He’s all jacket and no bombers. This, too, is an example of America’s uniquely profligate impotence. When something goes screwy at a ramshackle consulate halfway round the globe, very few governments have the technological capacity to watch it unfold in real time. Even fewer have deployable military assets only a couple of hours away. What is the point of unmanned drones, of military bases around the planet, of elite Special Forces trained to the peak of perfection if the president and the vast bloated federal bureaucracy cannot rouse themselves to action? What is the point of outspending Russia, Britain, France, China, Germany and every middle-rank military power combined if, when it matters, America cannot urge into the air one plane with a couple of dozen commandoes? In Iraq, al-Qaida is running training camps in the western desert. In Afghanistan, the Taliban are all but certain to return most of the country to its pre-9/11 glories. But in Washington the head of the world’s biggest “counterterrorism” bureaucracy briefs the president on flood damage and downed trees.

Amen. Four Americans are dead in part because the idiots in Washington are focused on things that are not the proper responsibility of the federal government.

I don’t know if this was his intent, but Steyn just made a very compelling argument for the libertarian vision.

Here are a few of my favorite examples of Steyn’s writings.

This post is about the link between effective government and small government, with the obvious implication that the current federal behemoth is largely incapable of handling its legitimate responsibilities. Well, the flip side is that doesn’t do a good job in areas where it shouldn’t be involved, as cleverly illustrated by this cartoon.

P.S. Speaking of libertarianism, here’s some self-mocking humor. We’ll start with a video portraying Somalia as a libertarian paradise, followed by cartoons on libertarian ice fishing and libertarian lifeguards, then an info-graphic showing 24 types of libertarians, and close with a poster showing how the world sees libertarians.

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I’ve already written about the despicable practice of “civil forfeiture,” which allows governments to confiscate the property of innocent people who have not been convicted of any crime.

And I’ve cited great columns on the issue from George Will and John Stossel., as well a sobering report on the topic from the Wall Street Journal.

Now the Institute for Justice has a video that should outrage any decent person.

It’s examples of government thuggery like this that make me a libertarian. You should be one as well.

If you need more convincing, check out these horror stories of statist abuse.

But let’s end on a happy note, with a few jokes about cops, one sympathetic, one mocking, and one political.

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