The Congressional Budget Office has released its latest report and it contains this rather distressing fact: the federal government is now borrowing 46 cents of every dollar spent in fiscal year 2013. I have long been a critic of the fiscal policies of both parties, but it is astonishing that the American people have not thrown out the whole lot of these people — Democratic and Republican. We look like an utter ship of fools as politicians allow the country to drift toward an unprecedented financial collapse. In the meantime, the Administration is borrowing this money to simply give Israel a $100 million building complex and pour billions into corrupted governments in Iraq and Afghanistan. China of course continues to hold much of our debt and is going on a buying spree in the U.S.
The government chalked up a $172 billion deficit in November alone — part of a $300 billion deficit for the first two months of the fiscal year. While both sides talk about the need to reduce spending, they have been spending like drunken sailors for years. For those of us who are skeptical about the use of tax increases in this economy, it is unnerving to think of giving more money to these same players. We need new revenue because of their horrible record over the last eight years. We must need however a third party to break the monopoly of power in this country — a monopoly that has left the entire country captive to these self-perpetuating parties.
It is clear that neither party wants to make hard choices and continue to hand out hundreds of millions of dollars to curry favor with different groups as with the $100 million gift of a building. There is also no serious accountability for the waste of billions under Bush and Obama as “stimulus” funds. I agree with the need to raise taxes but I have little faith in the Obama Administration or Congress in using such money responsibly. You do not get to a point of borrowing virtually half of every dollar spent without a complete lack of leadership and responsibility. Even if this figure falls, the point is that Congress still makes hundred million dollar gifts to wealth countries without a sound of objection or concern. Yes, all countries borrow money but we have a massive debt and continues to grow — an politicians who pledge to be more responsible in the future. The need for revenue is likely to change but not the need for responsibility in Washington.
Source: Washington Times
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@Gary: Okay, I agree with virtually all of that. I mistakenly thought you were arguing (as many free-market advocates do) for charging individuals for responses, like fire-fighting, or police intervention.
If that is not the case, then our difference is in computing the cost to the persons. You mention a starting point for computing the “proper” cost, but no ending point. I do not believe in charging everybody the same amount of money, because I think that unfairly burdens those with very little money. Taking 30% of a minimum wage worker’s income has far more practical impact than taking 30% of my income; in my case it only reduces the amount I save, in their case it reduces the amount they eat or health care they can afford, or whether or not they have a car.
Also, I think you have accidentally excluded from taxation the biggest beneficiaries of the infrastructure, corporations and businesses.
So we disagree on your “proper” cost; because you have focused on raw dollars and individuals, and I am focused on hardship, which I do not think can be measured as either a fixed dollar amount or even as a percentage of overall income. Unlike a corporation, individuals do not get to deduct 100% of their living expenses in computing their income.
However, I have a simple and pragmatic suggestion to fix that. Make the average income the deductible, and then implement a percentage tax on the remainder, for both corporations and individuals, that is sufficient to cover the costs of the infrastructure.
People earning less than average are already suffering enough, relative to the rest of the population; those earning more that average are not without their financial struggles, but will still be doing better than average after paying their share of the tax. Those a few hundred over the average will pay the least; those earning a million a week will pay the most.
Here is another, completely different alternative: Let people deduct like corporations do. As a corporation I could deduct the cost of offices (housing), all of my communications, all of my food and entertaining costs, my utility bill, my transportation costs for airfare and car service without ever a question from the IRS, all cleaning fees, trash fees, and the cost of accounting, tax preparation, lawyers, and consultants. I could also deduct all interest and financial fees I paid for any reason. Also all of my business insurance payments. Also the cost of all furniture for my offices. If you can claim money was spent in the pursuit of business, you can deduct 100% of it (some purchases must be deducted over time as a depreciation expense, but 100% ends up untaxed, nevertheless).
The IRS is neutral on whether expenses make sense, they won’t argue if a corporation wants to spend $10,000 on your office chair, or $100,000 on your desk, or if you want to hang a million dollar work of art on your wall.
So why not do the same for individuals? The poor have to spend basically all of their paycheck on living expenses. Housing (as rent or mortgage payments), food, utilities, transportation and health care. If we made their living expenses deductible, and applied the same rules and lack of scrutiny and neutrality of judgment as we apply to Bank of America, about half of America would have basically no income; because they spent most of it in the process of living.
The only people that would be taxed would be those that spent all they cared to spend on living, and after deducting 100% of that still had money left over.
TonyC said:
@Gary: the services do need to be paid for by the recipient of them.
@Tony: I do not believe that, because I do not believe “recipients” can be narrowed down to individuals.
In my city, a burglar is sentenced to prison. Who is the “recipient” of that service?
The recipient(s) are the people covered by the government service of being at the ready to respond and process law violators, if and when they happen.
And then, if and when it occurs, the further services of capturing, convicting and punishing the violators.
You artificially constrain the definition of a service to mean only an actualized service.
But a service can cover potential eventualities as well. That happens all the time in insurance offerings.
You pay for house insurance, even when your house doesn’t burn down.
That is a service, even when it is not actualized.
Similarly, all persons within the jurisdiction of the local police/courts/jailers are served by the infrastructure and readiness to respond, even when a response does not happen.
As a starting point, the proper cost for that service to each individual should be the operating costs of the infrastructure, divided by the number of persons in the jurisdiction. Also, as it is a government service, it is a non-profit entity.
All income, costs and losses must be factored in to the final per person cost, (i.e., a high crime area would cost more per capita) but that is how it is done with any servicer/servicee relationship.
There is no magic here, unless you intentionally mystify it.
@Gary: in places where those services are not welcome.
You can only mean not welcomed by you.
But when the choice is an either-or proposition, as the choices you are talking about are, then they have to be decided one way or another, and the fair way to do that is by majority vote. Most of us want those product liability protections, those workplace protections, those drug and food protections, and most of us are willing to give up our right to waive those protections in return for the added safety of them existing.
Before there was an FDA, or OSHA, or Social Security, the people of those times experienced the world you wanted, and they rejected it. It didn’t work for them. Contrary to free market principles, they had no effective power against the banks and corporations that would compel the powerful to do anything, they were getting phucked over at every turn. Bad food, bad medicine, deadly jobs, monopolistic pricing by trusts and collusions of basic life needs, and screwed out of retirement by one bankruptcy after another.
There may have been some other way of fixing that, but the easiest way was to collectively use the power of the government to do what the free market had failed to do, force the sellers to spend additional money making food, medicine, jobs and retirement reasonably safe.
For all the protestations of free market advocates, the free market does not work as advertised. The reason it does not work as advertised is because it is missing a key ingredient and motivator, desperation when asymmetrical power is held. When humans get desperate enough they will waive anything to prevent catastrophe, even their own rights and freedoms. It is why soldiers surrender, after all, they think it is the only chance of continuing their life, no matter how miserable, slavish or deprived it may be.
Until you detail for us a plausible mechanism that will make sellers voluntarily agree to be sued over what you call implied warranties, we can safely assume this is a binary choice. Either sellers are forced to accept liability for their products, or buyers are forced to waive all liability and take our chances without recourse. The vast majority of us prefer the former, so that is the way it should be.
@Gary: the services do need to be paid for by the recipient of them.
I do not believe that, because I do not believe “recipients” can be narrowed down to individuals.
In my city, a burglar is sentenced to prison. Who is the “recipient” of that service? That is impossible to tell, if the burglar was not sentenced to prison, then presumably he would still be burgling houses, but we do not know specifically which houses have been saved from his burgling, because that is a future that did not happen.
In addition, the jailing of the burglar may discourage others from burgling, due to that example of law enforcement raising the risk of burglary. In fact the actual person burgled by this jailed criminal may not be really served in the least; many burglars are caught without any stolen property being recovered or paid for. If anything, the capture of a burglar may just cost the victim additional time, lost work and the hassle of red tape.
The only way to compute the benefit of jailing a burglar (or murderer, or thief, or fraud) is probabilistically, and inaccurately at that. We presume all citizens benefit from law enforcement by reducing the probability of crime. There is no specific beneficiary; society as a whole is the beneficiary of all law enforcement and military protection, both for the deterrent effect and the removal of what would be an ongoing threat.
@Gary: To force services (and that includes quality control) upon any person makes his transaction an involuntary one.
So what? We cannot protect the country from invasion for some people and not for others that do not want to pay for it. Protecting the country from invasion requires a military and that costs money, that money has to come from somewhere, and relying upon some sort of voluntary contributions is not a solution, especially by libertarian or free market principles: For any given individual their maximum self-interest is served by letting somebody else volunteer (either as a soldier or as a source of money).
There is only ONE way to protect the country from invasion by foreign countries that seek to profit by the forceful looting of it; and that is with involuntary payments.
There is only ONE way to protect the rights of people, and that is with the involuntary defense of the rights of others. Rights are nothing but empty rhetoric if the violation of rights is not punished, and not every person can defend themselves; some of them because they are mentally or physically unable or disabled. Not everybody can pay, and they are not “Rights” if only those able to pay for them are entitled to them.
We have a way to defend rights, which we call the police, but they need to be paid for doing a dangerous job, and that payment is accomplished by involuntary transaction.
Rights, contract enforcement, liberty, sovereignty, protection against thievery, fraud, assault and slavery all cost money. The only plausible way to pay for those protections is by coerced transaction: In our case, the taxation of the money these freedoms allow us to earn.
There is no free lunch, and there is no way to have a country without the coercion of citizens by law.
TonyC:
You do know that I am not opposed to paying for government services, including all the ones you mentioned, don’t you?
Whether you call it taxes, or I call it fees for services, the services do need to be paid for by the recipient of them.
So you are preaching to someone in agreement on that.
The context in which I was talking about it, was in areas that I do not believe the govt has to be in, in places where those services are not welcome.
@Gary: This is a minor point, but in most cases I do not believe in fees for government services. I personally see taxes on income as a partner’s share of wealth created using their facilities.
Many businesses (like Malls) are quite explicit about that income sharing; in addition to rent, common area maintenance, security and marketing, stores owe a percentage of profits over a threshold (i.e. a deductible). In most malls doing that it is a non-negotiable take-it-or-leave-it proposition.
I see the country in a very similar light; as citizens we provide an infrastructure that helps people create wealth, and we are not content to just charge rent, we want a piece of the profits. Or, those people can go try to find a different mall; but they should not be allowed to sell in ours.
@Gary: Tax Evasion is a crime, even in a Libertarian system. There is no system of society that affords people rights without that system protecting those rights for all people, even people without a penny. Protecting rights, of life, of property, of contracts, can only be supported by some sort of tax or tax equivalent. Evading them is necessarily also a crime, it is the crime of undermining (and therefore violating) the rights of others to be free.
Any system without taxes is an anarchic system or despotism without rights, in which one can be killed, robbed, raped, beaten or enslaved without any consequences for the attacker, a system in which the only justice that exists is mercenary justice that must be bought, a system in which you own nothing, not even your own life, because anything can be taken from you by sufficient force and nobody is obligated to defend you or try to get it back.
TonyC:
Well yes you are right on that one, I only caught that faux pas after I posted it; notwithstanding I do believe HSBC did pay their taxes.
In a libertarian system they would be considered more like government fees for services rendered, and yes if you used those services you would definitely owe them. Evading them would a legal breach that the evader would be liable for.
Mike:
Libertarian legal systems do not “abjure any governmental interference with business enterprise for any reason.”
To the contrary, business contractual and criminal breaches are viewed far more seriously in a libertarian environment than in our own, and any such violations are dealt with swiftly and vigorously.
It is not anarchism; there is a need for government regulation and enforcement under libertarianism.
As to waivers, as I said before the availability of these to buyers and sellers are fundamental to a voluntary trade system.
The acceptable risk in any activity must be gauged by the person taking that risk. To force services (and that includes quality control) upon any person makes his transaction an involuntary one.
Idealism certainly drives libertarians, as it did just about any prior political or economic system during their inception.
But idealism does not automatically undermine practical application and adoption.
Unlike what TonyC avers, I (and many others) do have solutions for the ad hoc criticisms as to how to insulate the collective from any freedoms granted to the individual.
The distinction being made here, between concern for the collective’s rights being violated if an individual chooses to take his chances in a business transaction, vs the collective’s rights being violated if an individual chooses to take his chances in social choices, I believe to be artificial.
In both cases, society is saying there are minimum standards of risk that you, as an individual, are allowed to participate in.
Social conservatives insist that the risks to the collective are just too high when individuals choose to partake in drugs, prostitution, gay sex, gambling, etc.
Fiscal Liberals insist that the risks to the collective are just too high when individuals choose to partake in unregulated trade and business transactions.
Both sides make structurally similar and, in my opinion, specious arguments, supported by logic, statistics, anecdotes, and projections.
And both disrespect and belittle the autonomy of the individual, which is the antithesis of what libertarianism does.
Mike:
The problem with HSBC’s violations of law, and the penalty they are receiving, is not an indictment of the free market – quite the opposite, it is an indictment of the incumbent regulatory system that is supposed to ensure the honesty and quality control of the market.
Libertarianism in no way permits this kind of discretion to slap wrists when an admitted proven violation of law has occurred.
Libertarian law would come down hard on violators, much harder than this, and demand restitution to the victims, and fines to cover investigations, continuing law enforcement and whistleblowers..
(Of course it wouldn’t actually happen in this instance, since drug dealing, tax evasion and money laundering are not libertarian crimes to begin with.)
“Libertarianism in no way permits this kind of discretion to slap wrists when an admitted proven violation of law has occurred. Libertarian law would come down hard on violators, much harder than this, and demand restitution to the victims, and fines to cover investigations, continuing law enforcement and whistleblowers.
Gary,
Surely you know that is easier said then done particularly with some people who call themselves libertarian today and would abjure any governmental interference with business enterprise for any reason. Even by your own statements regarding the freedom to waive liability, the libertarian presumption of the free choice of the consumer is more wishful thinking that reality backed by experience. This is the flaw of modern libertarianism, in that it presupposes a condition that has never been present in human history, except perhaps in hunter/gatherer times. I would really love to see the libertarian movement work this out so that I could join, but so far the movement rates high on idealism. My cynicism is such that I believe idealism is the state that eventually leads to human disaster. We humans are still not at a stage of evolution where we can exist without some trying to screw everybody else.
@Gary: They argue exactly like you do,
No, they argue exactly like you do; by assertion without logic or proof or example. Ask them how the exchange of money for sex harms two consenting adults any more than if they had free sex, and they will have no logical answer. Or they will, as you do, claim the logic is there but they have no time to get into it. In short they cannot explain themselves, their logic is not provided because it will not hold up to logical scrutiny or critique, or it is based upon beliefs they hold which are not universal at all.
Enough experience with that is what leads me to expect the same about your missing argument. Ultimately free market solutions to these problems fail for a very simple reason that is fundamental to the free market: It discriminates based on the ability of customers to pay; it is fundamentally and at its heart a bidding war, and that is not how “Rights” should be awarded.
And good thread guys.
What Mike said.
The ultimate flaw of Libertarianism (discounting the flaws of some of their individual candidates in the LP) isn’t the social idea of protecting and maximizing liberty. It’s that their economics don’t jibe with reality and open the door for crime and economic tyranny. A laissez-faire market is every bit as dangerous to society as a locked down total command economy albeit for different reasons.
Your reply simply re-affirms what I just said:
“You believe there is no way to preserve the individual’s right to choose what risks he cares to take for himself without endangering the collective.
I believe the exact opposite, that an individual can be afforded his personal right and discretion to choose what risks he cares to take, while still protecting the collective from whatever sin his choices may engender.”
Your assertion that taking drugs, partaking prostitution, gambling, only affect the individual is something I agree with – but it is not what the powers-that-be agree with.
They argue exactly like you do, that these choices negatively impact the collective, and they have all kinds of statistics to “prove” it. And that therefore these activities must be made illegal or highly regulated.
That I have not jumped into the pool of arguing the hows, whys and ways of implementing the preservation of individual choice in trade and business, doesn’t mean can’t.
I just know how long and meandering such a discussion would be. I am trying to distill this discussion down to primary principles, and fundamental expectations of personal freedom.
(And I do mean personal choices.
When someone does something that pollutes my drinking water, that is no longer a personal action, but directly and unambiguously harms me.)
And that you have given examples of a constrained area of trade that has the problems you think would writ large, does not prove the immutable principle you propose, it only proves there are problems in this relatively new area of trade and business.