Category Archives: Fiscal Policy

More Than One Class of Parasite

The welfare state is a problem in America, there’s no question about it. When you have a country were nearly 49 million people are dependent on food stamps as of this writing, that is a problem. We libertarians as well as conservatives lament the growing welfare state because of what it is doing to the economic health of this country and the negative incentives (i.e. the moral hazard) to discourage people from working when it’s easier to get a check from the government. That being said, I think we libertarians could do a better job with the messaging on this particular issue.

Today’s episode of the Neal Boortz show is a perfect example of what I’m referring to. Boortz’s personality is that of a curmudgeon. Over the years he has referred to himself as the “High Priest of the Church of the Painful Truth.” I usually enjoy his blunt, non-P.C. style but sometimes I think he goes a little overboard when he calls people who are on one type of welfare or another “parasites” regardless of their individual circumstances. I missed the first part of his show (which is normal) but I tuned in about the time a caller who said the only government assistance he was receiving was food stamps called in. He went on to explain that he worked 3 minimum wage jobs at about 120 hours a week to support his 5 kids (I think that was the right number). After explaining his circumstances, he asked Boortz: “Do you think that I am a parasite?” Boortz responded “yes.” Boortz went on to criticize the man for having children he couldn’t afford to support and told him that perhaps since he still couldn’t support his children on his three jobs that perhaps he should give them up.

Taking the caller’s word at face value that he works 120 hours a week, I have to disagree somewhat on Boortz’s characterization that the man is a parasite. I also think that telling someone who really is trying to support his children but still coming up short and supplementing his income with food stamps to give up his kids is an unreasonable suggestion. How much would it cost taxpayers if every person who struggled with supporting their children put their children in the foster care system or an orphanage? We hear all the time from conservatives – especially social conservatives* that the ideal situation for raising children is a household with a mother and a father. I have heard some social conservatives say that the reason the state shouldn’t recognize gay marriage or civil unions is that the purpose of marriage is procreation. They also argue for the child tax credit and favorable tax treatment for married couples to encourage more people to have families**.

I don’t know to what extent Boortz agrees with these notions as he doesn’t seem to talk about these issues much. I do think there is something to say about children growing up in a stable environment, however. I haven’t done much research at all about the foster care system but from what I understand, it’s far from ideal. How many children in the foster care system find themselves in the criminal justice system whether on probation or incarceration versus those who are raised by at least one loving biological parent? I don’t happen to know the answer but I suspect that there are more of the former than the latter. Again I ask, how much would this man giving up his children possibly cost the taxpayers? I suspect it would be more than whatever he is getting in food stamps.

To some degree***, this man is a parasite but certainly not to the extent some people I have met are. There are the single dads who have too many children to too many baby mamas who don’t take responsibility for their children and have no shame about going on the dole. There are also far too many single moms out there who have made some very bad choices who basically marry the government. If anything, the caller is probably receiving less government support because he is working so many hours. Slacking is rewarded while trying to better oneself is punished – this in of itself is a major part of the problem, I think.

While I agree with Boortz in principle that one man’s need does not mean he has a claim on another’s money, there are more classes of parasites I think are even more offensive than poor people on welfare. I am much more offended by the corporate welfare and the welfare for the rich. I’m not talking about tax cuts or anything like that but subsidies. I’m talking about billionaire sports franchise owners who have their stadiums built by taxpayer dollars so they can pay millions more to their millionaire athletes. I’m talking about TARP, the auto bailouts, QE 1, QE2, QE 3 and other policies the Federal Reserve has used to make our dollars worth less and less every day. I’m talking about corporate lobbyists who write regulations in their favor to make it difficult for competitors to enter the market place. I’m talking about lawyers.

Yes there are more than one class of parasite bringing our economy down. When it comes to going after those who are using taxpayer money for their benefit, I think it’s high time we libertarians say women and children last.

Point of Clarification: It wasn’t fair to lump all lawyers together as parasites. Lawyers are necessary in our system to take out some of the parasites I mentioned above (the white blood cells, if you will). Like any profession, there are bad apples. When I think of parasitic lawyers, I think of the likes of John Edwards and the ambulance chasers on late night TV. There are plenty of heroic lawyers who truly fight for liberty and justice such as those at the Institute for Justice and The Innocence Project. I’m sure we can count fellow Liberty Papers contributor Doug Mataconis among them as well (though I know nothing about his work as an attorney, he’s a good person and I’m sure that’s reflected in his profession as well).

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Thoughts on the fiscal cliff

Just some quick thoughts on the fiscal cliff…

IT’S THE SPENDING, STUPID

It’s frustrating that no one is discussing the fact the the Obama plan for deficit reduction actually increases spending with the inclusion of a stimulus package in 2013. Raising taxes and borrowing more money for more stimulus not debt reduction. It’s just more debt.

The political failure from Republican leaders in the House is staggering. Republicans should have been hammering Obama’s plan so damn hard even the media had to listen. The ad writes itself: “Obama’s plan is tax now, borrow now, spend now. Is that a balanced approach?” It’s a compelling message, a potent political weapon, and it’s true. Had Boehner been looking for any of those, he would have figured this out. Unfortunately for the American people, Boehner felt it was more important to compromise with Obama.

At this point, if I were Boehner, I would actually give into Obama on tax increases but insist that tax increases be met dollar-for-dollar with spending cuts. If suddenly there were no conflict about tax rates but there was no deal, it would force people (even reporters) to ask what the remaining barriers were. This would allow Boehner to shift the conversation where it needs to be… on spending. (Yes, I know this plan is insane. However, when you’re negotiating someone who’s view of compromise is “heads, I win; tails, I win”, there is no such thing as sanity.)

NEWSPEAK OF THE DAY

From the WaPo article linked above:

Boehner’s latest offer calls for $2 trillion in savings over the next decade, half from higher taxes and half from cuts to the fast-growing health and retirement programs that are the federal government’s largest expense. All told, Obama’s latest offer calls for about $2.15 trillion in savings.

Taking more money from the citizens is “savings”? Who knew bank robbers were being so darn responsible, saving all that money?

The accurate description of Boehner’s plan would be $1.2 trillion in savings and $800 billion in taxes. Obama’s plan would accurately be described as $1.5 trillion in new taxes, $80 billion in new spending in 2013, and $570 billion in cuts thereafter. The truth, of course, would disrupt the narrative that the President’s plan is balanced while Boehner’s is not. Therefore, spending cuts and taxes are all called savings.

In other news, the English Language filed assault charges against the Washington Post after reading the article. (If only.)

WHAT IF GOING OVER THE CLIFF ISN’T THAT BAD?

The conventional wisdom is that going over the cliff will be an economic nightmare. But what if it isn’t? There are a some positives in going over the fiscal cliff:

  1. Government spending will go down.
  2. The debt limit will not need to be increased.
  3. Americans will actually be impacted by the cost of government.

Might these mitigate the harms of going over the cliff? In the short term, I don’t think so. The financial hit taken by Americans coupled with the continued economic uncertainty of a government groping for a solution will cause a lot of pain.

In the long term, the pain might (notice I said “might”) produce a healthy skepticism of government spending among the citizens. A 2011 Gallup poll already indicated that the public overwhelmingly favors spending cuts in the abstract. However, they tend not to favor cutting things that benefit them directly. Since different people benefit from different programs, this produces an unwillingness for politicians in either party to cut spending. If people suddenly become concerned with the economic pain of the fiscal cliff, they just might be receptive to a trade-off of reduced government benefits for decreased taxes and increased economic stability.

Of course, there has to be support from the GOP in Washington for this, since it certainly won’t come from the Democrats. Well, there goes that idea…

CONCLUSION

Take these thoughts for what they are… frustrations and wild speculations about the fiscal cliff. Hopefully they start a good discussion on the subject. Maybe they’ll even open a few eyes to facets of the situation left unreported by the mainstream media.

Let me steal adapt a song title from Avenue Q for a closing thought: There is life outside of the Beltway. This country has survived a hell of a lot and it still can. The will of the American people to be successful and prosperous has survived recessions and depressions and governments more suffocating than what we have today. We can do it again, even if we go over the cliff.

Your Incredibly Stupid Progressive Economic Propaganda for the Day

There is so much economic ignorance/stupidity in this video (below), I wouldn’t even know where to begin. John Maynard Keynes himself would probably be embarrassed by this video courtesy of the California* Federation of Teachers and narrated by the great economist of our time Ed Asner.

I don’t have much else to say about this video right now, it’s too easy (though feel free to rip it apart here…or defend it). Actually, I am in the planning stages of writing a book that challenges this sort of mentality (I’m shooting for a release date about May 2013). I’m hoping Liberty Papers readers will buy it; I will have discounts for Liberty Papers readers.

And now for your, um…enjoyment[?]: Tax the Rich: An animated fairy tale**

WARNING: This is 7 minutes and 50 seconds of your life you will never get back.

*Oh yes, the state of California which is being run by people with this kind of mentality! Yeah, their economic policies have been working great, haven’t they?

**Fairy tale is actually a very good description.

The Modern Republican Party is a Special Kind of Suck (Part 2 of 3)

Part 1

Confusing Economic Policy of Suck
I’m sure there are many other areas where Romney went wrong but I think most of the rest of this special kind of suck is courtesy of other Republicans. During the Republican primary, the “anyone but Romney” crowd was so desperate to eliminate Romney that they resorted to a line of attack one would expect to come from Democrats. Many Republicans seem to forget that the attacks against Romney concerning Bain Capital were first leveled by Newt Gingrich and Rick Perry at campaign rallies, in the primary debates, in their campaign ads, and in anti-Romney super PAC ads. Perry called Romney a “vulture capitalist.” The Obama campaign picked up this line of attack where Gingrich and Perry left off. In swing states like Ohio, this message had basically been pounded since before the state’s primary and never let up for the rest of the campaign.

Once charges like these are made by Republicans who are supposed to be proponents of free market capitalism, it’s kind of difficult for people who actually understand how the free market works to explain why business practices employed by Bain Capital are not only legitimate, but also necessary. In this Occupy Wall Street era we live in, there seems to be an attitude that no one is ever supposed to lose his or her job and that every job is not only necessary but equally valuable.

Companies like Bain invest in businesses in trouble and try to make them profitable. In making a business profitable, sometimes this means that some people are going to lose their jobs. Like a doctor who is trying to save the patient’s life, sometimes a limb needs to be amputated. No one wants to lose an arm or a leg in such a scenario but most who face such a dilemma would rather lose an arm or leg than lose his or her life. If the amputation is done soon enough and correctly, the patient lives. Other times, however; even despite taking such drastic measures, the patient still dies. The same is true for some of the companies Bain tried to rescue. Of course no one wants to think of themselves as a limb that needs to be amputated in order to save their company*.

Immigration Policy of Suck
In addition to the mixed messages concerning Capitalism, the Republican Primary debates took on a very harsh tone concerning immigration. Any candidate who suggested that the idea of rounding up each and every illegal immigrant was impractical and that perhaps deporting individuals who were otherwise productive members of our society, said candidate would be accused of advocating “amnesty” – a four letter word among conservative Republicans.

Such harsh anti-illegal immigration rhetoric carried over into the general campaign when President Obama (rightly, in my view) made an executive order to allow individuals who were brought here illegally as children under the age of 16 to stay and have temporary work permits. This was an outrage among Republicans because, you know, the law is the law.

As Gary Johnson pointed out on several occasions during the campaign, while it’s true that we live in a nation based on the rule of law, too many Republicans fail to understand that the laws are changeable. And as I pointed out at the time, when there are more than 27,000 pages of federal law on the books with over 4,500 criminal laws, this necessarily means that any president would have to prioritize and choose which laws he will enforce and which he will not. When the number of laws is this numerous, it’s the same as having no rule of law at all.

Immigration is an issue the GOP needs to figure out and figure out quick as the Hispanic population will become an increasingly major factor in future elections (even GOP strongholds like Texas might eventually turn blue due to this demographic reality). Should we be surprised that the Hispanic population overwhelmingly supported Obama over Romney given the rhetoric?

It’s time to reexamine the notion that the border should be secure first before any comprehensive reforms are made. I think this is exactly backwards. If the legal immigration process wasn’t such a bureaucratic nightmare to begin with, I doubt seriously that illegal immigration would remain an issue.

This much needed debate** is not going to be very productive if every time someone proposes something other than building a 20’ tall fence along the Southern border, checking ID’s of everyone with brown skin, and rounding up every illegal immigrant regardless of circumstances, s/he is accused of promoting amnesty. Even more importantly, whatever the GOP decides immigration policy should be, they need to soften their tone and be mindful that we are talking about human beings here. I think it’s safe to assume that just about every legal immigrant (especially from Mexico) has at least a few family members who are here illegally. They do not like to think of their relatives as “invaders” who need to be rounded up. These people vote too.

*And I’m writing as someone who has been the limb being amputated. Just a couple of years ago, it was my department that needed downsized to save the company…at Christmas time no less. I’m happy to say that the downsizing measure did in fact save the department and six months later, they called me back and have been working there ever since.

**Doug and Kevin have each offered up some ideas for immigration reform that I think warrant consideration.

Part 3

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