Reason for a New Age

The Tea Party – Part 2

Posted by publius2point0 on 2010/04/16


My apologies, I had a sudden bout of nap attack strike as I was writing part 1 and had to cut the post short. This post should complete the topic.

For several months, the Tea Party movement has existed with no clear unifying purpose beyond being “very very angry”. As such, discussion of the group was fairly impossible. “Angry” simply isn’t an objective.

A day or two ago, the movement finally decided a top ten list of goals, which gives me the chance to weigh in.

The first and simplest comment that I can make is that whoever wrote the thing is simply awful. The writing is not appreciably better than a high school student’s, that I can tell. This alone makes it a fairly worthless document as any time your organization puts a foot forward, its progress will be limited to the amount of respect it can get from its peers. If it looks like a blithering idiot, it will not find itself going far–except perhaps as some scheming fellow’s servant.

The one point that I can compliment is the title, “Contract from America”. Clever.

Introduction

The purpose of our government is to exercise only those limited powers that have been relinquished to it by the people, chief among these being the protection of our liberties by administering justice and ensuring our safety from threats arising inside or outside our country’s sovereign borders. When our government ventures beyond these functions and attempts to increase its power over the marketplace and the economic decisions of individuals, our liberties are diminished and the probability of corruption, internal strife, economic depression, and poverty increases.

The very last sentence of this utilizes the logical fallacy of Proof by Assertion. Insisting that these particular government activities lead to corruption, internal strife, economic depression, and poverty does not make it so. If you do not have the space to prove your assertion, you are not gaining anything by asserting it but making yourself look the fool. So far as I am aware, the economic crisis is mostly a factor of lessened government oversight of the banking and investment system. Given that it is this crisis which brought the Tea Party into being, stating that even less influence in the marketplace would be best seems rather foolhardy. Why not say that good influence is good and bad influence is bad?

1. Protect the Constitution

Require each bill to identify the specific provision of the Constitution that gives Congress the power to do what the bill does.

In their very first clear policy suggestion, they have wasted one of their ten slots. The Constitution gives the government the power to do whatever it wishes so long as it does not violate our rights. The US Federal government has the right to raise taxes, to protect the nation, and to see to the general welfare of the populace. I can think of nothing that is not encompassed in that. The preamble itself is so broad that one need quote nothing more than that to state which section of the Constitution gives the power to make that law. “We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.”

It’s also worth noting that there is an entire branch of the Federal government which does nothing more than verify that laws are kosher as regards the Constitution. This matter has been dealt with already.

2. Reject Cap & Trade

Stop costly new regulations that would increase unemployment, raise consumer prices, and weaken the nation’s global competitiveness with virtually no impact on global temperatures.

Governmental Response: Very well then, we will not create costly new measures that do all these various bad things. Instead we will prefer cost-effective measures that do not do bad things and will have a significant impact on global temperatures. Your wish for us to not do ineffective, costly, and bad things has been duly noted and is found to be in accordance with our own wishes. Thanks for visiting!

3. Demand a Balanced Budget

4. Enact Fundamental Tax Reform

Begin the Constitutional amendment process to require a balanced budget with a two-thirds majority needed for any tax hike.

Adopt a simple and fair single-rate tax system by scrapping the internal revenue code and replacing it with one that is no longer than 4,543 words—the length of the original Constitution.

The question of government debt is a large one and will be examined in a future blog. Regardless of what the answer to that question may be, I suspect that so far as taxation is concerned, it should be something which acts according to a formula or set of rules, rather than a set value that is lowered or “hiked”. Even then, the ability to tax or bless at will is a useful tool for many situations and I doubt that there are many economists who would advocate seeing these abilities removed or made unreachable — at least in regards to taxes other than income tax. I may be wrong on that point.

Ultimately, I would say that the issue should be to concretely examine the question more than to state anything as an absolute desire. These are not simple and clear issues.

5. Restore Fiscal Responsibility & Constitutionally Limited Government in Washington

Create a Blue Ribbon taskforce that engages in a complete audit of federal agencies and programs, assessing their Constitutionality, and identifying duplication, waste, ineffectiveness, and agencies and programs better left for the states or local authorities, or ripe for wholesale reform or elimination due to our efforts to restore limited government consistent with the US Constitution’s meaning.

While perhaps noble, this is a fairly meaningless desire. “Do it better!” sounds good, but neglects the fact that better is subjective. Just as often as not, an intent to clean the house up simply makes things worse because everything is as it is because of years or decades of evolution to the optimum state. Generally, when something is actually under-performing, it is not too long until this comes to light and things are revised. A base presumption that nothing is working can only cause chaos.

6. End Runaway Government Spending

Impose a statutory cap limiting the annual growth in total federal spending to the sum of the inflation rate plus the percentage of population growth.

Seeing as a call to balance the budget was already demanded in item #3, this seems entirely superfluous. Its arbitrary limit can only be called bizarre. What if the country is being invaded? What if there is an economic crisis that is causing deflation?

7. Defund, Repeal, & Replace Government-run Health Care

Defund, repeal and replace the recently passed government-run health care with a system that actually makes health care and insurance more affordable by enabling a competitive, open, and transparent free-market health care and health insurance system that isn’t restricted by state boundaries.

Outside of the pesky detail that the recently passed health care bill did not create government-run health care, I can only point out that the issue of state boundaries account for less than 2% of health spending. If the goal is to decrease spending, there is still another 50% to go from there. See the entire series on the cost of health care, starting here.

8. Pass an ‘All-of-the-Above” Energy Policy

Authorize the exploration of proven energy reserves to reduce our dependence on foreign energy sources from unstable countries and reduce regulatory barriers to all other forms of energy creation, lowering prices and creating competition and jobs.

So far as I am aware, the government is more often doing its best to encourage various forms of energy creation than in putting in regulatory barriers. I can only presume that this refers to bans on oil exploration domestically. It’s not obvious why they felt a need to beat about the bush in stating what they wanted.

President Obama, in fact, recently opened up several regions to be explored. Democrats that I know of didn’t seem to particularly mind and certainly Republicans are already for it, more or less. I suspect that the age of the old-time hippies has died. The only objection I saw anyone mention was that under President Bush II, he certainly would have done something stupid regardless of the theoretical benefit of the act. I can’t particularly fault that logic.

9. Stop the Pork

Place a moratorium on all earmarks until the budget is balanced, and then require a 2/3 majority to pass any earmark.

If the goal is to keep the budget balanced, this was — again — demanded in item #3. If the goal is to stop earmarks, it should be noted that earmarks are how politics are done. Trading hogs is what we pay our politicians to do. I also wonder how one is supposed to balance the budget before the items of spending have been agreed upon?

10. Stop the Tax Hikes

Permanently repeal all tax hikes, including those to the income, capital gains, and death taxes, currently scheduled to begin in 2011.

“Balance the budget” and “don’t raise taxes” are entirely at odds. The cost of a balanced budget is that you have to deal with your expenses. You can defer payment, but the longer you do so the harder the hammer comes down at a later date. If anything is going to negatively affect the economy, that will.

Ultimately, taxes are a side-effect of spending. If you do not like taxes, there is only the option of cutting spending. Nearly all spending goes to the military, social security, medicare/medicaid, or interest on the national debt. Not raising taxes simply increases the last of those. Removing social security or medicare/medicaid from the government simply moves that expense to private insurance. You’ll still be out that money.

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10 Responses to “The Tea Party – Part 2”

  1. Government spending is out of control.

    You are arguing that much of the spending (such as health care) is the same whether government provides it, or private industry provides the same services.

    My belief is that governments are very inefficient. And, I’d argue that heavily regulated private businesses are less efficient than non-regulated businesses.

    Some regulation is certainly good, and necessary, but over-regulation creates inefficiency.

    The right answer to all of this is to have a government that understands this concept, and seeks to support the private sector. I’m not a tea-party guy, and not even sure I know any — but, my understanding is that are advocating:

    1) Small government
    2) Limitations on government spending

    As you pointed out, entitlements are a huge percentage of government spending. These need to be cut significantly. Also, to reduce debt, government revenues need to be increased. There are those who argue that cutting taxes raises government revenues. In other words, I have heard it argued that there are statistics which show that lowering taxes raises government revenues. I am skeptical about this, and doubt the stats. My rule is ‘you buy it, you pay for it.’ American’s voted for lots of spending, and now they need to pay for it.

    My problem is ‘representation without taxation’. As much as half of Americans pay no federal income tax, yet feel they should have a voice in deciding how the money is spent. This is ludicrous. If you let 100 people vote on government giveaway programs, but ask only half of them to pay the bill (and, really have only about 20% pay 90% of the bill) — you are going to see huge spending increases voted into place. This is a system doomed to failure. People who do not have to pay money back will always vote themselves money.

    -Ken W

    • “You are arguing that much of the spending (such as health care) is the same whether government provides it, or private industry provides the same services.”

      Medicare and Medicaid are cheaper than private insurance since they do not charge for profit and they have a larger client base which reduces overhead costs per client. That might not always be true, but at the moment it is. If you were to change everyone who is on government insurance to private, the amount of money being funneled to health care would only rise. The problem of our health care spending is not an issue of government inefficiency.

      That said, I do still advocate private insurance over public. I’m just pointing out that the Tea Party is legislating without research. If you are going to demand a change that fixes problems, demand the change that fixes it.

      “My problem is ‘representation without taxation’. As much as half of Americans pay no federal income tax, yet feel they should have a voice in deciding how the money is spent. This is ludicrous. If you let 100 people vote on government giveaway programs, but ask only half of them to pay the bill (and, really have only about 20% pay 90% of the bill) — you are going to see huge spending increases voted into place. This is a system doomed to failure. People who do not have to pay money back will always vote themselves money.”

      I would consider that an issue of voting rights, not taxation. While it sounds good to be able to say, ‘Earn representation, sucker.’ As I pointed out in Libertarianism and Human Foibles, nearly everyone does. Regardless of whether the money that a person earns is credited to his account before it is debited or not, he is manufacturing the money that powers the nation. That he is too stupid to require a wage that is worth taxing is irrelevant to whether or not he earned it. Giving it to him just for the sake of taking it away is inefficient and raises the baseline for entry-level employment, which benefits no one one but illegal aliens.

      • I believe you are wrong in this. Medicare and Medicaid are not cheaper than private insurance when compared on an APPLES on a APPLES TO APPLES basis. There is an important distinction (double check me on this):

        Neither makes money. The costs are higher than the associated revenues, with the difference being charged against the national debt.

        If these were run as private programs with exactly the same benefits, the cost would be higher, but the cost of governmnent entitlements would go down.

        If they were run as private programs, with no government interference, meaning a total free market medical system, the cost would likely go down, but I have no way of proving that, so I won’t argue it.

        -Ken W

      • Let me give a small example,

        Bob comes up with the idea for a business making widgets. He hires Elaine to manufacture the actual widgets while he manages accounts, handles sales, etc. Every day, widget sales make $1000. Now while Elaine needs to earn $10 per day if she wants to save up enough money to retire, she is an idiot and accepts a wage of $1 because that is enough for her current needs. She should have demanded $10 but she didn’t and unfortunately because nearly everyone in entry-level positions long-term are similarly idiotic, there is no other company offering any entry-level wage but $1. Bob takes the other $999 for each widget and, because he is intelligent, invests the spare money in research, upcoming industries, etc. This is the natural allocation of money.

        Now, the government needs $300 per day to hire military, police, etc. They must levy a tax to pay for this.

        Elaine is already, effectively, earning negative money because she didn’t demand as much as she needs to retire. And if you tax her even 1 cent, she will die of starvation because she truly asked for only the smallest necessary wage to be able to survive day-to-day.

        If I tax everyone 30%, Elaine will go to her boss and demand a raise sufficient to cover taxes. She will now make $1.43 which requires that Bob lower his own wage to $998.57. After the government has taxed everyone, Elaine will have $1, Bob will have $699.

        If instead I tax only Bob, Elaine’s salary will remain at $1 and Bob’s salary will remain at $999. After taxation, Elaine will have $1, Bob will have $699.

        In practical terms, the only end difference between these two cases is that in one case I had to go through the effort of collecting taxes from two people instead of one, which raises overhead. And in the first example, Elaine’s salary is $1.43. If Bob can find an illegal immigrant who is happy enough to work for $1, because he isn’t going to pay any taxes and that’s all he needs to survive, then Bob may as well fire Elaine and hire the Mexican. Elaine makes $1 fore being on unemployment, the Mexican makes $1, and after taxes Bob makes $698–debited $1 greater because he’s the only person who can be taxed to pay for Elaine’s unemployment stipend.

        Assuming that Elaine does keep her job, she is going in and making an honest living every day. Outside of being an idiot and asking for a lower wage than she needs, she’s done nothing wrong. If she was to demand enough to pay taxes, she would earn enough money to be taxed, and hence be able to vote (in your system). But regardless of whether you tax her that money or not, it is her labor that allows the creation of $1000, and no matter how you cut it, all taxes come from that $1000. How the money gets apportioned out after taxes is only an issue of foresight and bargaining skills, not of taxation rights.

        If you think that Elaine is too stupid to vote, well then that’s the issue, not her wage.

      • “I believe you are wrong in this. Medicare and Medicaid are not cheaper than private insurance when compared on an APPLES on a APPLES TO APPLES basis. There is an important distinction (double check me on this):

        Neither makes money. The costs are higher than the associated revenues, with the difference being charged against the national debt.”

        Both figures are for how much the relative programs (Medicare, Medicaid, and private insurance) ‘cost’. Whether the cost of the program comes from real money or from debt is irrelevant. That cost is still accruing. As a government organization MM can shift that cost out on later generations whereas private insurance cannot. But, of the two, MM cost less if you actually pay for it. If you were to raise taxes to cover the cost of MM (i.e. if you had a balanced Federal budget), the taxpayer would be out less money every year than if he was told to buy equivalent private insurance.

      • Money, whether it is paid immediately, or by our kids — is still real money. It is crooked to spend money now and ask future generations to pay it back. I don’t mind it when it is for something unexpected, like a war, or a major catastrophe — but, in these circumstances, I’d like to see the money paid back within a fairly short timeframe.

        I’d like to see the government respect my money as much as I do. Have you ever heard the term “government waste?” It does exist.

        I always describe myself as a fiscal conservative and a social liberal. I suspect there are more of these than people realize, and that the tea party spans both democrats and republicans. It’s people who are sick of being taxed more than they should be — even if much of government spending is being passed off on future generations.

  2. I do have a problem with people voting that don’t understand the issues they are voting on — but, that is a completely different topic. I assure you that there are people who vote who you would agree, if you met them, do not really understand the pros and cons of what they are voting on. I do not understand why we want people voting who have not taken the time to study the issues.

    Anyway.. to the point of your example, there are many ways to assess taxes, and many possible formulas. Our current system is really not bad, and I even think it is acceptable, if not fair, that higher income people pay a higher share.

    My complaint is when a person who pays ZERO tax gets to vote on something that costs taxpayers money. Although we are theoretically a republic, which should provide some degree of protection against people voting themselves entitlements, the system isn’t working. If there are two candidates and one promises more entitlements, and the other doesn’t (a chicken in every pot), the give-away candidate has an edge. Especially amongst people who don’t have to write a check. When we have a world in which only a hand full of people pay for the vast majority of taxes, and those that pay little or no taxes get to approve the spending, it is a broken system.

    The bottom line is: Spending money has to hurt, or the economy is ultimately doomed. Currently, people are sheltered from the spending by:

    1) Half do not pay federal taxes
    2) Taxes are not reflective of spending – we are spending money we do not have, hoping our kids will pay it back

    If everyone had to write a check each time someone came up with a “government program”, there would be fewer government programs, and less waste. Possibly fewer wars fought too…

    In the words of that great philosopher, Howard Beale, “I’m mad as hell and I’m not going to take it anymore”.

    • Let me ask this, did you have any particular questions about the Bob and Elaine example? It’s quite short, and was by intent simple. Perhaps I did not succeed at that. If you did read it and did understand it, then I fail to see how you intend to promote the idea that raised taxes makes anyone suffer? You have not addressed any failings in my logic nor math, so I can only assume that you did not read it, Libertarianism and Human Foibles, The Minimum Wage, Illegal Immigration, nor Why the Health Care Bill Doesn’t Matter One Jot; that you have entirely failed to understand any of these; or that you can’t figure out how to debate any of these topics beyond reasserting your initial position.

      I am happy enough to engage you in debate, but a debate is not two people talking past each other.

  3. Roberta said

    Whereas I do not agree with much of your assessment of the Tea Partyers — I do have one area of agreement with you: I do agree that the government needs to cut expenses. Question: Where do you think we can cut expenses enough in the U.S. government to pay off our debts (or, at least reduce them drastically) so that more taxes do not need to be raised on the American public?

    • Firstly, let me note that I have no desire to be wrong in anything. If you disagree, this means either that you believe I have stated something wrong, that you haven’t been sufficiently convinced, or that you have been unwilling to examine your own position. I have no way of knowing which of these might be the case. If it is the first, I would always rather be able to correct myself in any mistakes so I am reliant on you to point them out to me (I won’t necessarily agree that I have been wrong, of course, but I can’t know that until I know what alternatives there are). If it is the second, then I need to at least do a better job of explaining the issue. And if it is the third, then that isn’t disagreement, it’s a failure to examine your position.

      But the area that can most easily be cut is of course health care. We know that the cost of it can be halved if the proper measures are taken and without reducing the actual quality of health care. There is no reason not to do this. The only question is the method. Either a single-payer system must be created or a blanket ban on employer-based insurance must be passed. Personally, I advocate the latter, but either one should be sufficient. But even then it must take at least a decade if not two for the cost to halve. Cost is directly linked to employment. Halving the size of an industry is equivalent to mass layoffs.

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