On the Other Hand, Let’s Kill All the Economists

The old saying has it that if all the economists in the world were laid end to end they wouldn’t reach a conclusion. Economists can’t agree on the past, let alone the future. Who needs them?

There are, for example, economists who say that Clinton’s 1993 tax increase caused the subsequent economic boom by (a) reducing the deficit, which (b) resulted in lower interest rates, which (c) stimulated consumer and business spending. There are, on the other hand, economists who say that (a) deficits have no discernible effect on interest rates and, therefore, (b) the boom of the ’90s was a normal post-recession recovery pumped up by rapid gains in productivity — phenomena beyond the influence of presidential power.

The Bush tax cuts have economists equally divided, pro and con. Some economists argue that reversing the cuts in higher tax brackets wouldn’t harm economic recovery but would reduce the deficit, which would in turn…blah, blah, blah. Other economists say that reversing any of the Bush cuts would put the economy into a nosedive by discouraging investments in new technology and business ventures.

Switching from macroeconomics (the study of aggregate economic activity) to microeconomics (the study of, what else, disaggregate economic activity), we find opposing camps on such issues as the minimum wage. Some economists say that raising the minimum wage has little effect on the employment of minimum-wage earners. Others argue the opposite. Both sides have data to support their conclusions — of course.

Then there’s Social Security — the economic issue of the Twenty-first Century. Some economists argue that Social Security can be “saved” by “tweaking” the system, namely, by increasing Social Security taxes (oops–“contributions”) and/or cutting Social Security benefits. Others argue that the system is moribund and the only way to save it is to kill it and replace it with private retirement accounts.

Now, if you’ve been reading carefully you’ll have noticed a trend. There are those economists who think the federal government should intervene in the economy (unless there’s a Republican president), and there are the others who believe we’d all be better off if the federal government didn’t try to fine-tune the economy, kept its hands out of taxpayers’ wallets, didn’t interfere with businesses’ (legal) operations, and didn’t run (badly) the world’s largest ponzi scheme (oops — pension program).

Can you guess which side I’m on?

Next post: why Social Security should be privatized, in one easy lesson.

Miscellany, Potpourri, and Other Stuff That Comes to Mind

* Taxes and regulations drain almost half of the output of the U.S. economy. Where’s the outrage?

* Truth is to government as daylight is to vampires.

* Democrats — having embraced balanced budgets as a sign of “fiscal responsibility” — must keep taxes high to keep the welfare state intact. They know where their votes come from.

* Remember “urban sprawl”? Of course there’s urban sprawl. Not everyone wants to live in the hot, crowded, noisy, filthy confines of downtown Washington, D.C., and other centers of urban elegance.

* Remember the budget surplus? Sorry it has vanished? Well, just remember that the surplus was your money. When politicians were arguing about what to do with the surplus they sounded just like thieves arguing about how to split the loot from a bank heist.

* If the President is responsible for the state of the economy, he must be responsible for the state of the weather as well.

* Those who say that the era of big government is over he must be talking about the Soviet Union.

* Here’s a success strategy for the Republicans: Drive the religious right out of the party and into the arms of the Democrats.

First Principles

A society is formed by the voluntary bonding of individuals into overlapping, ever-changing groups whose members strive to serve each others’ emotional and material needs. Government — regardless of its rhetoric — is an outside force that cannot possibly replicate societal bonding, or even foster it. At best, government can help preserve society — as it does when it deters aggression from abroad or administers justice. But in the main, government corrodes society by destroying bonds between individuals and dictating the terms of social and economic intercourse — as it does through countless laws, regulations, and programs, from Social Security to farm subsidies, from corporate welfare to the hapless “war” on drugs, from the minimum wage to affirmative action. On balance, the greatest threat to society is government itself.

The constitutional contract charges the federal government with keeping peace among the States, ensuring uniformity in the rules of inter-State and international commerce, facing the world with a single foreign policy and a national armed force, and assuring the even-handed application of the Constitution and of constitutional laws. That is all.

The business of government is to protect the lawful pursuit and enjoyment of income and wealth, not to redistribute them.

Liberty is the right to make mistakes, to pay for them, and to profit by learning from them.

The most precious right is the right to be left alone.

Political Parlance

Constitution
Archaic document viewed by politicians on the left as an impediment to progress by judicial fiat.

Entitlement
Legislative term for handout.

Fiscal responsibility
Shibboleth of big-government liberals, whose version of a balanced budget requires higher taxes to pay for “social programs.” Formerly a New Deal ploy characterized as “tax and spend, spend and elect.”

Gridlock
Something we could use less of on Washington’s streets and more of in the Capitol building.

Liberal
Someone who wants the best of everything for everyone, at the expense of those who have achieved more than mediocrity.

People’s business, The
Something which, it seems, cannot be conducted without imposing more taxes and regulations upon the people.

Socialism
Foreign political movement founded on the principle of “to each according to his needs, from each according to his ability.” Thought to be defunct but thriving in the United States, thanks to “progressive” taxation, “protective” regulation, and myriad “social programs” at all levels of government.

Social Security
Welfare program disguised as pension plan. Robs otherwise hard-working individuals of the incentive and ability to invest wisely toward retirement.

Unfinished business
Whatever it is that Congress hasn’t done lately to impede the economy and trammel liberty.