A Tenther’s Guide to the Fiscal Cliff

Watching Republicans and Democrats squabble over the so-called fiscal cliff is like watching a duo of burglars arguing over who keeps your flat screen television. No matter which party prevails, you lose.

Tenthers, as a class, tend to be more pre-occupied with the liberty cliff, whose precipitous incline we fell off long ago. The other various cliffs – fiscal, debt, tax policy, entitlements – are really just the jagged rocks we’ve met on the way down. Which is why Tenthers tend not to wade into the whole fiscal cliff debate. If your causes are liberty, constitutional rule of law and sound currency, then it seems downright silly to sweat the details of how much the federal government should raise the debt ceiling to pay for foreign wars, Obamaphones and highways named after U.S. Senators.

Consider the numbers. The federal government now spends $3,800,000,000,000.00 per year. Various taxes supply about $2,900,000,000,000.00 of that amount. The free ride component – the annual deficit – has now accrued to a staggering $16,000,000,000,000.00 in national debt.

Faced with these appalling details, the Democrats (and Paul Krugman) respond with calls to tax and spend more. Republicans, the supposedly more fiscally continent of the two parties, grumble on about tax increases and then invariably capitulate to more borrowing and spending. And with the deck chairs on the Titanic nicely rearranged, the American people are once again free. By “free” I mean free to watch Dancing with the Stars and Real Housewives of Cleveland while an omnipotent federal government further enslaves us into a highly regulated, pathetically dependent blob of couch potatoes.

So what would a Tenther do? I’m glad you asked!  Here’s 4 steps a Tenther would take:

Details

No Budget, No Freedom

There are rallying cries from the American revolutionary period which are still axiomatic in American Society. One was apparently coined by Jonathan Mayhew in a 1750 sermon, “Discourse Concerning Unlimited Submission and Non-resistance to the Higher Powers“. It is, “No taxation without representation.” Similarly, James Otis is often credited with the phrase, “Taxation without representation is tyranny.” It is claimed that Otis used this phrase in his legal argument against the Writs of Assistance.

These phrases are unquestionably correct in a free society, but what is it that makes them true? What are the characteristics of taxation without representation that make it tyrannical — and how do these principles apply to today’s American society?

Details

New England Nullification Tradition Marches On

Though many living in New England today might be loathe to admit it, there is a long history of nullification being used in the region to defy unconstitutional federal edicts. This week, the town of Sedgwick, Maine voted to carry on that proud tradition by nullifying certain federal agricultural regulations.

They did so through what might be the most legitimate form of democratic expression left in America: the New England town meeting. (Which have been held in the Sedgwick town hall since 1794.)

According to one report, the residents of Sedgwick voted to enact a law that not only permits

“Sedgwick citizens…to produce, process, sell, purchase, and consume local foods of their choosing,”

but declares that

Details

Why Tenthers are Projected as Extreme and What We can do about It

If our Movement revels in its maverick persona, then, we will remain divisive.  In sports, divisive is fun.   In politics, divisive is fun, but if we are sincere in our desire to win over the population, then, we need to take the sport out of it.

There are certain pitches in our message which water down our cause.  In fact, we know this to be true because we admit our cause is all but lost.   We cannot convince enough people to respect our cause, and so we have concluded that nullification is the appropriate strategy.   Perhaps it is, but we should still continue to bring about a mainstream movement, rather than a marginalized, disobedient one.

Why are we marginalized?   It is fairly easy to see why.  Despite the many reasons to complain about the state of our nation, most of us would have to admit that life here is far more preferable than most any other nation in the world.   We are so lucky to be here, and we should not take our system entirely for granted.  Most moderates and independents would probably tend to agree with this.

Details

Obama and Infrastructure

The President is continuing his push for the federal government to go deeper into debt in order to fund infrastructure projects. While nobody disputes that the country has infrastructure needs, the precarious nature of federal and state finances indicate that policymakers need to starting thinking outside the box. Specifically, policymakers should be looking to make it easier for the private sector to fund and operate infrastructure projects.

As my colleagues Chris Edwards and Peter Van Doren have explained, the main problem with government infrastructure spending is the lack of efficiency:

Details

Worried About Anarcho-Capitalism

Famed liberal journo Joe Conason is worried about the increasing influence of Rothbardian “anarcho-capitalism” and the related “Austrian school of economics.” As well he should be. It is these radical ideas–undistorted by the journos–that enthrall the young, and indeed any thinking person. We all know there is something desperately wrong–morally and economically–with the US empire and its police state, welfare state, and banksterism. We are, after all, living in yet another Federal Reserve depression. The average family’s income has not increased in real terms since the 1970s, the first decade of full Fed power. The state and its related corporations are enriching themselves by making us poorer.

“The Austrian craze is particularly curious because it has displaced a school of economics that ought to be more appealing to the proud and patriotic, especially those who claim to be true to the views of the nation’s founders. That would be the school known as ‘the American system’…[a]s articulated by thinkers from Alexander Hamilton to Henry Clay to Abraham Lincoln….” Very funny. Why can’t you people just be government-loving, trade-warring, state-building mercantilists? Then journos could praise you.

Details

Government Efficiency

I recently criticized the idea that policymakers should focus their attention on making government more “efficient.” Instead, I argued that policymakers should focus their reform efforts on reducing government’s size.

Government efficiency proponents make the mistake of viewing the cost of government in the same light as the cost of operating a private business. However, government cannot operate like a business because it isn’t a business.

Private businesses obtain their revenue through voluntary exchange: consumers willingly give a business their money in return for a product. Businesses must control the cost of providing a product in order to maximize profits. A business that does not adequately control its costs can find itself undercut by a competitor offering a like product at a lower price. In the private sector, the market sets the price of a product through the interaction of supply and demand.

Government is unconcerned with “profit.” The “cost” of government is equal to the taxes extracted from the private sector to pay for government activities, plus the economic damage caused by extracting resources from the private sector. Taxes are involuntarily obtained through compulsion and force. Regardless of the value a citizen assigns to the services provided by government, a citizen must pay for those services, and at a price set by government. The price one pays for government is primarily a function of political factors, which are only indirectly influenced by economic considerations.

Details

Obama’s Dubious Purchase of the Free Market

When people respond to the claim that Obama is not friendly to “business” they normally start with something like… ‘How can you say that? He (Obama) bailed out the banks, the auto makers and the insurance companies!’ If you claim he is anti-small business, they will point to one of the dozens of tax credits…

Details

A Government-Made Recession

By mid 2008 almost everybody knew that we were in deep financial trouble. But the forces that brought it about actually began decades ago with The Community Reinvestment Act in 1977. This legislation “forced lending institutions to grant mortgages to people whose income, credit histories, and net worth would previously have disqualified them from getting such loans.”

An old adage suggests that in getting a loan from a bank the recipient must first prove that he does not need one by listing his assets. The bank uses this list to retrieve all or a portion of what is owed should the recipient default on the loan. The less invested or potentially lost the easier it is for the recipient to walk or default. Such is long standing wisdom and favors the more industrious individuals, as it should. What this means in real life is that high crime or impoverished areas of town do not attract investors as readily.

Socialists (share the wealth advocates) saw a race connection, thus injustice, when it was realized that “only 72 percent of minority applicants were approved for mortgages, versus 89 percent of white applicants.” Moral outrage followed which was resolved by legislation ”forcing lending institutions to loan money to people they would otherwise not lend to and in places where they would otherwise not put their money” (“Government Bailout,” The New American, Sept. 29, 2008, pp.11-15).

Details

When Cars Run on Corn

Here’s Matt Purple in “Corny Capitalism,” posted on American Spectator at the end of August:

Earlier this year, the Environmental Protection Agency issued another one of those announcements read exclusively by government bureaucrats and green policy wonks. The EPA decided to delay a decision to increase the concentration of ethanol legal in gasoline from 10% to 15%. So-called E15 fuel would have to wait for approval until November.

It was a little-read regulatory decision that barely made a splash in the media. But it was also a rock thrown at Washington’s hornets’ nest of food and agricultural lobbyists. “We are disappointed,” warned food giant Archer Daniels Midland. “We find this further delay unacceptable” and a “dereliction of duty,” harrumphed ethanol lobbying group Growth Energy.

…The history of ethanol is a sad torrid affair of crony capitalism and green fantasies. By jumping in bed with the agriculture industry and blindly slapping on new regulations, the government artificially propped up an industry and put itself in a bind from which there may be no return.

Most certainly, the EPA decision is only a delay, not a reprieve.

Details