What Libertarians need to do to win. Part 2

To win against Democrats and Republicans, Libertarians need to point out that both major political parties support the idea of “big government”.  That the only difference between them is what they want Big Government to do.  What laws and regulations it should pass.  Laws and regulations that make you far less “free” today than you would have been a century ago!  At the same time both major parties support deficit spending, which means that your children and grandchildren will end up paying the bill that this generation has run up.  Currently that deficit is about $17 trillion dollars.  More than our national GNP for a year!  And both the Democrats and the Republicans refuse to do anything “effective” about it!  When a private individual runs up a big debt, generally they will do two things.  One, reduce their spending.  Second, attempt to earn more money.  So why can’t the federal government do the same?  The federal government certainly has things it could do to spend less money besides cutting entitlements like Social Security and Medicare and Medicaid.  These three being what the Republicans favor as a means of cutting spending.  The Democrats would prefer to raise taxes if they could, but the sort of taxes they want to raise would be counterproductive in the effect that they would have on the economy.  No one appears to be willing to consider the elimination of things like “The War on Drugs” which has an economic cost, when all is considered, including its effects upon both people and society, of something in the ball park of a hundred billion dollars a year (when you add in state costs and the effects upon other countries such as Mexico).  Or cutting back on the defense budget which has an overall cost (including Homeland Security, the TSA, FBI, CIA,NSA) of nearly a trillion dollars a year.  Especially as we are paying the costs of wars in disabled veterans and those damaged by war all the way back to World War 2.  We also maintain military forces in well over a hundred countries.  We are so spread out across the world (in the military sense) that it is actually true that “the sun never sets on our forces”…  There certainly must be expenditures in this category that we could cut back by a considerable amount.

You can download from Google a list of all of the federal agencies that now exist.  You will also note that many of these have much the same tasks as state agencies do.  So there is a duplication of tasks, which means money is being wasted that could be better used somewhere else.  We also have agencies that do nothing but “protect” the interests of certain “favored” groups by “protecting” them from outside competition.  These of course add to our cost of living.  Then we have the licensed professions and occupations. Again these enjoy the “protection” of government, allowing them to collect higher incomes than what they would be able to obtain in a truly competitive society.  Additionally, they add considerably to our cost of living over what we’d be paying for these same services if performed under free market conditions.  This is also one reason why Medicare costs are soaring so high.  Since we have the world’s highest health care costs, we simply spend almost twice as much for our medical services than what these same services would likely cost if they didn’t enjoy government “protection”.  Of course Obamacare makes this problem even worse.  We are going to be spending THREE TRILLION dollars a year on health care very soon.  About 18% of our gross nation product.  Readers, fellow libertarians, we are going to be going bankrupt pretty soon!

So, what can we do about this?  Like the debtor, we have two options and most likely both will be necessary.  We need to seriously reduce government spending.  But given the current state of government revenues, that isn’t likely to be quite enough.  There is also the issue that any major reduction in the size of our government will increase the level of unemployment.  Attempting to remove the “protections” that the licensed professions and occupations will be seen as a serious threat to their own incomes… Reducing the size of the military also will have an economic effect both here and in those countries where they are now based.  To bring government spending in line with government revenues requires a very substantial cut in spending…  Which in turn is likely to reduce government revenues in turn.  So we need to reform the tax system.

The personal income tax likely affects investment along with making it more difficult to start a business, although going by my own experience, government regulations are more a problem for the small businessman than is the income tax itself.  The cost of unemployment compensation (paid by employers) and workman’s compensation are also a burden.  As is the payroll tax and corporate taxes. The same for property taxes. Granted, these taxes aren’t all “federal”, but state taxes can also be a burden to the small business owner.  It would be ideal if the tax system could cover all levels of government.  And be as “automated” as possible.  Sales taxes have been suggested, but once you start exempting things, the remaining items subject to the tax have to carry a heavier burden. However, there is one type of tax that lends itself well to both automation and is not either regressive (like sales taxes) or progressive (as the income tax is said to be).  The “automated financial transaction tax” (aka the Tobin tax, and other names) meets this standard.  To completely replace all taxes anywhere in the US and start paying down the deficit would require a financial transaction tax of 4% to 5%.  Less than the 6% sales tax we have here in Michigan as a matter of fact!  Under this tax system, every financial transaction is taxed.  There are (at a conservative estimate) about one hundred trillion financial transactions per year in the US.  So total revenues would be about four to five trillion dollars, but there would absolutely no other form of tax permitted at any level!

Under my plan, Social Security would pay every retiree the exact same amount of money based upon the federal poverty level.  Medicare costs would drop a great deal once the medical profession has been “deregulated” and forced to operate in a true free market.    Under free market conditions, American health costs would be reduced at least by 50%. Health care would then be “affordable” for most people.  A modified version of Medicaid would take care of the indigent who are not likely to be as numerous in a libertarian society where there are no restrictions on providing goods and services to everyone else. I see no reason for a trillion dollar military and believe one half that cost would be adequate to our needs once we get over the idea of being the world’s “policeman”.  Additionally tasks that are performed by the states should not have any federal counterparts.  That is just a waste of good money. As a matter of fact, I believe that the federal government should be limited to national defense and relations with other nations.  This is the sort of federal government that we used to have there in the past.  The role of state governments can be expanded to take the place of what we have the federal government now doing.  If you don’t like what your state government is doing, you can move to another state.  Moving to another country is much more difficult…

 

 

 

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About muskegonlibertarian

77 year old retired owner of a security guard agency. Member of the Libertarian Party.
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