Wednesday, 2 October 2013

‘A Modest Proposal’ on America’s ‘Budget Crisis’

This is not the first ‘Budget Crisis’ faced by the American political classes. Nor is it the first partial shutdown of (some parts of) the US Federal government. By some counts, it’s the 18th.

The Circle Bastiat posted a piece written in 1990 by Murray Rothbard, at the time of that year’s ‘Budget Crisis,’ on the realities of government budget ‘crises’ and how they often seem to end up demanding that the taxpayers “sacrifice” or that the American people join in “fair sharing of the pain.”

In politics autumn, not spring, is the silly season. How many times have we seen the farce: the crises deadline in October, the budget “summit” between the Executive and Congress, and the piteous wails of liberals and centrists that those wonderful, hard-working, dedicated “federal workers” may be “furloughed,” which unfortunately does not mean that they are thrown on the beach to find their way in the productive private sector.
    The dread furlough means that for a few days or so, the oppressed taxpaying public gets to keep a bit more of its own money, while the federal workers get a rare chance to apply their dedication without mulcting the taxpayers: an opportunity that these bureaucrats invariably seem to pass up.
    Has it occurred to many citizens that, for the few blessed days of federal shutdown, the world does not come to an end? That the stars remain in their courses, and everyone goes about their daily life as before?
    I would like to offer a modest proposal, giving us a chance to see precisely how vital to our survival and prosperity is the Leviathan federal government, and how much we are truly willing to pay for its care and feeding. Let us try a great social experiment: for one year, one exhilarating jubilee year, we furlough, without pay, the Internal Revenue Service and the rest of the revenue-gathering functions of the Department of Treasury.
    That is, for one year, suspend all federal taxes and float no public debt, either newly incurred or even for payment of existing interest or principal. And then let us see how much the American public is willing to kick into, purely voluntarily, the public till.
    We make these voluntary contributions strictly anonymous, so that there will be no incentive for individuals and institutions to collect brownie-points from the feds for current voluntary giving. We allow no carryover of funds or surplus, so that any federal spending for the year–including the piteous importuning of Americans for funds–takes place strictly out of next year’s revenue.
    It will then be fascinating to see how much the American public is truly willing to pay, how much it thinks the federal government is really worth, how much it is really convinced by all the slick cons: by the spectre of roads falling apart, cancer cures aborted, by invocations of the “common good,” the “public interest,” the “national security,” to say nothing of the favourite economists’ ploys of “public goods” and “externalities.”
    It would be even more instructive to allow the various anonymous contributors to check off what specific services or agencies they wish to earmark for expenditure of their funds. It would be still more fun to see vicious and truthful competitive advertising between bureaus: “No, no, don’t contribute to those lazy louts in the Department of Transportation (or whatever), give to us.” For once, government propaganda might even prove to be instructive and enjoyable.
    The precedent has already been set: if it is proper and legitimate for President Bush and his administration to beg Japan, Germany, and other nations for funds for our military adventures in the Persian Gulf, why shouldn’t they be forced, at least for one glorious year, to beg for funds from the American people, instead of wielding their usual bludgeon?
    The 1990 furlough crisis highlights some suggestive but neglected aspects of common thinking about the budget. In the first place, all parties are talking about “fair sharing of the pain,” of the “necessity to inflict pain,” etc. How come that government, and only government, is regularly associated with a systematic infliction of pain?
    In contemplating the activities of Sony or Proctor and Gamble or countless other private firms, do we ask ourselves how much pain they propose to inflict upon us in the coming year? Why is it that government, and only government, is regularly coupled with pain: like ham-and-eggs, or . . . death-and-taxes? Perhaps we should begin to ask ourselves why government and pain are Gemini twins, and whether we really need an institution that consists of a massive engine for the imposition and administration of pain and suffering. Is there no better way to run our affairs?
    Another curious note: it is now the accepted orthodoxy of our liberal and centrist establishment that taxes must be raised,  regardless of where we are in the business cycle. So strong is this article of faith that the fact that we are already in a recession (and intelligent observers do not have to wait for the National Bureau of Economic Research to tell us that retroactively) seems to make no dent whatever in the thirst for higher taxes.
    And yet there is no school of economic thought–be it New Classical, Keynesian, monetarist, or Austrian–that advocates raising taxes in a recession. Indeed, both Keynesians and Austrians would advocate cutting taxes in a recession, albeit for different reasons.
    So whence this fanatical devotion to higher taxes? The liberal-centrists profess its source to be deep worry about the federal deficit. But since these very same people, not too long ago, scoffed at worry about the deficit as impossibly Neanderthal and reactionary, and since right now these same people brusquely dismiss any call for lower government spending as ipso facto absurd, one suspects a not very cleverly hidden agenda at work.
    Namely: a love for higher taxes and for higher government spending for their own sake, or, rather, for the sake of expanding statism and collectivism as contrasted with the private sector.
    There is one way we can put our hypothesis to the test: shouldn’t these newfound worriers about the deficit delight in our modest proposal one year with no deficit at all, one year with no infliction of pain whatever?  Wanna bet?


  1. For me Peter, it seems Murray Rothbard may be wanting to throw a fair bit of smarts and well established good systems of keeping communities working for the reason he believes their pay has come through "stolen" taxes.

    I would like to add two points to this; Are Taxes Stolen or taken unmorally from its population and 2.) Do people have a semi choice of what services they pay for now in the United States.

    Point 2.) Murray Rothbard talks here about what would Americans truly want to donate and support given a choice and pay taxes "voluntarily and "anonymously". My thoughts are that to some degree Americas do basically consent and agree to paying taxes and do see their worth from the Government in the way of services.

    I say this because after many decades of a basic democracy they do vote often for centralist Government and social polices and support their local service people and hold them in high regards. They often put praise on their Government
    workers, and their military personal are rewarded with Heroism and the US people believe they are valuable to their wellbeing. I suggest they also see merit in there state parks and museums and basic social services. The citizens voices to remove taxes also however can be heard through he standard democratic process. Extremists can find ways of reducing their own tax system if the really want - and use systems such as putting their business in other countries to avoid tax.

    I think the debate is fairly transparent and overall their people seem happy with a Government who does tax and provide a service for that. Even many Liberty lovers in USA seem to agree to Enforcing Boarder control with "taxes" and paying for Miltary through "taxes".

    Also their state system does allow some competition between different state Government Polices and ideas. Trans State mobility.

    Point 1.)
    Coming back to the First Point "Are taxes taken immorally from its Population."

    I don't think I really have an answer to that except could an argument be made that the Government Prints the Currency and has the international responsibilities for monetary policy so could the use of the USA currency to do business hold with it an inherent contract to pay part of all money earned back to the distributor i.e the Government. Sort of like the currency is not owned but licensed.

    Then if people felt strongly they could trade with a bargain system -which happens now.


  2. You are quite wrong AntonNZ - people do not "basically consent and agree to paying taxes".

    What has happened through the generations is a kind of numbness, a kind of hopelessness - rather like a rape victim having to accept the inevitable (however horrific and unwillingly) as 'penetration' occurs.

    That is hardly consent, it is simply a view that nothing can be done about it so everyone shrugs their shoulders and gets fleeced.

  3. Mr Lineberry, Its that the Opinion of most Americans "Really"?

  4. Yes, I believe so.

    I think most Americans would rather spend their tax dollars on themselves rather than handing it over - buying a new car, or new furniture, or a nice holiday, or paying down their mortgage.

    Everything you mention - military spending, border control - and 1001 things you didn't mention are all part of the game, all part of the con trick "see how lucky you are? the Government keeps you safe from rampaging Canadians crossing the border..."

    The same con-trick is used for all manner of things from regulating shower heads, to the water in your lavatory, to air traffic controllers... ("pay us for your own protection")..and the Kool-Aid is sweetened with those welfare and social security cheques - "see? we have proved it! without the government there would be no free ride? no cheque in the mail - are you really going to get rid of us?"

    I bet that monster Mr Castro used to tell the girls in his basement how lucky they were too; no doubt he topped himself in a state of incomprehension ("but they consented?!?!").

    Anton - do not mistake a victim's numbness, resignation and depression for consent or agreement

  5. Well Mr Lineberry, I completely agree that that is how I have felt here in New Zealand myself. I thought America was in a better position than N.Z. like 1000 times better?

  6. Your theory doesn't stack up Mr Lineberry. Rejecting our current our current taxation policy is as easy as ticking the 'Liberterianz' box on the election form, and NZers overwhelmingly choose not to.

  7. Ian, I do not wake up in the morning and think "how can I do and say the wrong thing today?" - the very notion is preposterous and silly, and I challenge you to name a single day in the last 24 years when I have done so.

    Please feel free to name the specific date and time when I did so.

    It therefore must mean that everything I do and everything I say is, logically, correct as an absolute.

    It further follows that, if everything I say and do is correct, those with a contrary opinion to anything I say or do are wrong.

    It should also not surprise anybody to learn - vis-à-vis votes for the Libertarianz - that all but 1600 New Zealanders are morons; our 'family' (according to Tony Abbott) in Australia has been saying so for more than a century HAHAHAHAHAHA!!!

  8. God you're a dick, Lineberry. That you can take to the bank.

  9. @Ian it should be fairly apparent from conversations and certain people posting here that very few people even understand what a libertarian philosophy is, let alone would know it's in their best interests to vote for a party they've never heard of claiming to represent that philosophy. I know that resigned feeling Mr. Lineberry is talking about. I feel it all the time, but I tick that box anyway. What else is there to do?

    @AntonNZ No, latest information suggests that NZ ranks far better than the USA in economic freedom. My own area of interest is the brewing industry. I feel the vice grip of our regulation here, and it's NOTHING compared to the mountains of regs the US brewers have to deal with. You make a really interesting point about independent state legislation/taxation providing an opportunity to vote by migrating. I guess the issue is, like Mr. Lineberry's resigned rape victim, it becomes a question of "you're going to be violated, you may choose the rapist, and the type of degrading act performed upon you."

    Apologies to anyone offended by the analogy. It's not mine, and I don't much like it, but it does seem apt, so I'm extending it.


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