Sinners in the Hands of an Angry Blog

While on one level I realize it’s cool (and humorous) to make fun of the tea parties (am I late on this topic? too bad!), I find the “but they don’t have a plan” criticism to lack punch:

I cannot really come up with a better word than juvenile for the tea parties — don’t protest the taxes unless you can identify the specific cuts in expenditures that you would make to bring the budget into balance.  If you think taxes are bad, then you should think deficits are worse, because they raise the taxes of people who were not represented in the decisions to spend the money. 

First, from what I could tell from the minor amount of attention I paid to them, there actually were lots of anti-spending signs involved.  Some I agree with, some I don’t, some fall into the “protest weirdo” category.  Secondly, if you want to criticize the specific people at tea parties with this argument, that’s fine.  But to imply that this criticism applies to libertarians (the post title above was “Libertarians And Taxes”) in general is kinda nuts.  Libertarians love cutting spending, for better or worse.  If you look around you can find prominent (and not-so-prominent) libertarians talking about cutting nearly everything: the post office, medicare, welfare, social security, military, corporate subsidies, nearly every major department of government, scientific research, public schooling, and just about anything else.  

In fact, of all the political persuasions you can be in America besides “pure anarchist,” it’s hard to imagine any of them talking more about cutting spending than libertarians — certainly “cutting spending” is not featured in either of the major parties’ platforms.  I completely agree with the Friedman quote in Samwick’s piece that there’s no point to cutting taxes without cutting spending, but if we’re going to be tarring people with that brush, libertarians wouldn’t be my first target.

Also, I’m not sure I get why there’s a “I’m not so sure” in Samwick’s statement here: [my bold]

Libertarians and Taxes: From David Boaz of the Cato Institute, who visited Dartmouth yesterday:

Too many advocates of small government still have this lingering attachment to the Republican party,” Boaz said. “It’s like being a battered wife — how long do you wait to leave?

Perhaps the more interesting part of the analogy is, Where do you go when you leave?  Typically, it is not to another partner, but to a period in which you are not in a relationship until you can recover from what just happened and make the changes that are needed so it never happens again. Are the Libertarians doing that?  I’m not so sure.  Consider more of what Boaz said: Boaz described the recent Republican tea parties in protest of tax day as “the revival of a freedom movement.” He also referenced a recent advertisement run by the Cato Institute in several major U.S. newspapers, including The New York Times. The advertisement discussed perceived flaws in the economic stimulus package. “Someday, this ad is going to be remembered as the revival of the free market movement,” Boaz said.

It seems to me that an ad pointing out flaws in the economic stimulus package (which is spending) actually does seem precisely like “identify[ing] the specific cuts in expenditures that you would make to bring the budget into balance.”  Certainly even eliminating even the entire stimulus wouldn’t have balanced the budget by itself, but it really does seem like proposing something you think should be cut.  Just glancing over Cato’s website I see quite a few articles that, if their recommendations were heeded, would cut government spending.  Did I really just have to explain that Cato often advocates cutting government spending?  Is this a revelation to anyone?

Finally, if we all agree with ”To spend is to tax” then in addition to demanding that anti-tax people having spending cuts lined up, then we must also demand that anyone advocating spending proposals have tax increase plans to go along with them.  I’m sure any libertarian will agree to this bargain.

Tyler Cowen believes that the government will use a consumption tax to make up for social security and Medicare shortfalls:

Today’s report is this:

“The financial outlook for Medicare and Social Security has significantly worsened, as the bad economy and mounting job losses have pushed both programs years closer to insolvency, according to a grim report issued Tuesday by the Obama administration.”

Maybe you once argued that “Social Security is fine,” but dollars are fungible and the budget must be judged as a whole.  The consumption tax is coming, I am sorry to say.

While I think he’s definitely right that taxes will increase, I think they will not increase as much as is actually necessary to cover these programs.  This is because I think politicians will take what they perceive to be the easier way out — a combination of excluding high-cost individuals from eligibility for healthcare as well as laws that seek to prevent unhealthy actions.

As an example, take many of the nanny-state laws we have now: seatbelts, bicycle helmets, banning of fatty foods.  The rationale for limiting behavior that only harms oneself is that we all bear the burden of your injuries — and if we increase the scope of our current national healthcare programs, this will only enhance these arguments.  An alternative choice the government could have made would’ve been: “Well, we don’t want to restrict the freedoms of our citizens to choose to not wear seatbelts, so instead we’ll just increase taxes to pay for the medical care they will inevitably require” — which is basically the decision that Cowen is describing.  I can’t think of any time this actually happened.  The government always chose the path of punishing or restricting the actions of  ”bad-decision-makers” instead of socializing the costs to the “good” people.

So my guess is that as national healthcare costs rise to unsustainable amounts, the government will exclude high cost (and assuredly politically powerless) individuals from coverage (drug users would be the logical start) as well as outlaw high cost activities (not exercising, eating anything listed at thisiswhyyourefat.com).  Eventually these two policies will have a certain amount of synergy —  if you’re convicted of any high-cost-prevention laws, you get booted from the healthcare system.