The age-old question of Taxes. In the early 1960’s Economist Milton Friedman adopted an idea hatched in England in the 1950’s regarding a Negative Income Tax, to replace the current system of Welfare. During the election year of 1968 the concept of the Negative Income Tax came up again and Friedman was on hand to champion it’s acceptance.
Here is an interview he did for the News Magazine Program Newsfront from NET (precursor to PBS) from May of 1968 where Friedman is asked to explain just what the Negative Tax idea is.
Milton Friedman: “Under present law we have a positive Income Tax that everybody knows about, particularly now, a couple weeks after they’ve paid their income taxes. And under the Positive Income Tax if you happen to be the head of a family of four, for example, and you have $3,000 of income, you neither pay a tax nor receive any benefit from it. You’re just on the break-even point. Suppose you have an income of $4,000. Then you have $1,000 of positive taxable income, on which at current rates (14%) you pay $140.00 in tax. Suppose today you had an income of $2,000. Well then you’re entitled to deductions and exemptions of $3,000, you have an income of $2,000. You have a negative income taxable income -$1,000. But currently under present law you get no benefit of those unused deductions. The idea of a Negative Income Tax is that, when your income is below the break-even point, you would get a fraction of it as a payment “from” the government. You would receive the funds instead of paying them.”
To a lot of people that idea sounded pretty good, especially to those who wanted “less government” floating around. The big problem, it was soon discovered, was that it was a system that could very easily to manipulated by the unscrupulous and whatever benefits it portended to have, were evaporated by the amount of large gaping holes the plan inherently had in it.
Friedman was adamant until a proposal came along to fold the Negative Tax scheme in with the present one and Friedman dropped it rather quickly.
But at the time, it was the “next big thing”
Milton Friedman interviewed by Mitchell Kraus on the NET program Newsfront for May 8, 1968
Milton Friedman “The Economic Crisis” (Part 3) 1968
Milton Friedman “The Economic Crisis” (Part 4) 1968
In the last few years the number of people receiving Food Stamps has skyrocketed. President Obama has not cut any federal welfare programs but has increased them, and he has used class warfare over and over the last few months and according to him equality at the finish line is the equality that we should all be talking about. However, socialism has never worked and it has always killed incentive to produce more. Milton Friedman shows in this film series below how so many people get caught in the “Welfare Trap.” Friedman also gives a great solution to this problem in the “negative income tax.” I am glad that I had the chance to be studying his work for over 30 years now.
In 1980 when I first sat down and read the book “Free to Choose” I was involved in Ronald Reagan’s campaign for president and excited about the race. Milton Friedman’s books and film series really helped form my conservative views. Take a look at one of my favorite films of his:
Friedman Friday:(“Free to Choose” episode 4 – From Cradle to Grave, Part 1 of 7)
Volume 4 – From Cradle to Grave
Abstract:
Since the Depression years of the 1930s, there has been almost continuous expansion of governmental efforts to provide for people’s welfare. First, there was a tremendous expansion of public works. The Social Security Act followed close behind. Soon other efforts extended governmental activities in all areas of the welfare sector. Growth of governmental welfare activity continued unabated, and today it has reached truly staggering proportions. Travelling in both Britain and the U.S., Milton Friedman points out that though many government welfare programs are well intentioned, they tend to have pernicious side effects. In Dr. Friedman’s view, perhaps the most serious shortcoming of governmental welfare activities is their tendency to strip away individual independence and dignity. This is because bureaucrats in welfare agencies are placed in positions of tremendous power over welfare recipients, exercising great influence over their lives. Because people never spend someone else’s money as carefully as they spend their own, inefficiency, waste, abuse, theft, and corruption are inevitable. In addition, welfare programs tend to be self-perpetuating because they destroy work incentives. Indeed, it is often in the welfare recipients’ best interests to remain unemployed. Dr. Friedman suggests a negative income tax as a way of helping the poor. The government would pay money to people falling below a certain income level. As they obtained jobs and earned money, they would continue to receive some payments from the government until their outside income reached a certain ceiling. This system would make people better off who sought work and earned income. This contrasts with many of today’s programs where one dollar earned means nearly one dollar lost in welfare payments.
Friedman: After the 2nd World War, New York City authorities retained rent control supposedly to help their poorer citizens. The intentions were good. This in the Bronx was one result.
By the 50’s the same authorities were taxing their citizens. Including those who lived in the Bronx and other devastated areas beyond the East River to subsidize public housing. Another idea with good intentions yet poor people are paying for this, subsidized apartments for the well-to-do. When government at city or federal level spends our money to help us, strange things happen.
The idea that government had to protect us came to be accepted during the terrible years of the Depression. Capitalism was said to have failed. And politicians were looking for a new approach.
Franklin Delano Roosevelt was a candidate for the presidency. He was governor of New York State. At the governor’s mansion in Albany, he met repeatedly with friends and colleagues to try to find some way out of the Depression. The problems of the day were to be solved by government action and government spending. The measures that FDR and his associates discussed here derived from a long line of past experience. Some of the roots of these measures go back to Bismark’s Germany at the end of the 19th Century. The first modern state to institute old age pensions and other similar measures on the part of government. In the early 20th Century Great Britain followed suit under Lloyd George and Churchill. It too instituted old age pensions and similar plans.
These precursors of the modern welfare state had little effect on practice in the United States. But they did have a very great effect on the intellectuals on the campus like those who gathered here with FDR. The people who met here had little personal experience of the horrors of the Depression but they were confident that they had the solution. In their long discussions as they sat around this fireplace trying to design programs to meet the problems raised by the worst Depression in the history of the United States, they quite naturally drew upon the ideas that were prevalent at the time. The intellectual climate had become one in which it was taken for granted that government had to play a major role in solving the problems in providing what came later to be called Security from Cradle to Grave.
Roosevelt’s first priority after his election was to deal with massive unemployment. A Public Works program was started. The government financed projects to build highways, bridges and dams. The National Recovery Administration was set up to revitalize industry. Roosevelt wanted to see America move into a new era. The Social Security Act was passed and other measures followed. Unemployment benefits, welfare payments, distribution of surplus food. With these measures, of course, came rules, regulations and red tape as familiar today as they were novel then. The government bureaucracy began to grow and it’s been growing ever since.
This is just a small part of the Social Security empire today. Their headquarters in Baltimore has 16 rooms this size. All these people are dispensing our money with the best possible intentions. But at what cost?
In the 50 years since the Albany meetings, we have given government more and more control over our lives and our income. In New York State alone, these government buildings house 11,000 bureaucrats. Administering government programs that cost New York taxpayers 22 billion dollars. At the federal level, the Department of Health, Education and Welfare alone has a budget larger than any government in the world except only Russia and the United States.
Yet these government measures often do not help the people they are supposed to. Richard Brown’s daughter, Helema, needs constant medical attention. She has a throat defect and has to be connected to a breathing machine so that she’ll survive the nights. It’s expensive treatment and you might expect the family to qualify for a Medicaid grant.
Richard Brown: No, I don’t get it, cause I’m not eligible for it. I make a few dollars too much and the salary that I make I can’t afford to really live and to save anything is out of the question. And I mean, I live, we live from payday to payday. I mean literally from payday to payday.
Friedman: His struggle isn’t made any easier by the fact that Mr. Brown knows that if he gave up his job as an orderly at the Harlem Hospital, he would qualify for a government handout. And he’d be better off financially.
Hospital Worker: Mr. Brown, do me a favor please? There is a section patient.
Friedman: It’s a terrible pressure on him. But he is proud of the work that he does here and he’s strong enough to resist the pressure.
Richard Brown: I’m Mr. Brown. Your fully dilated and I’m here to take you to the delivery. Try not to push, please. We want to have a nice sterile delivery.
Friedman: Mr. Brown has found out the hard way that welfare programs destroy an individual’s independence.
Richard Brown: We’ve considered welfare. We went to see, to apply for welfare but, we were told that we were only eligible for $5.00 a month. And, to receive this $5.00 we would have to cash in our son’s savings bonds. And that’s not even worth it. I don’t believe in something for nothing anyway.
Mrs. Brown: I think a lot of people are capable of working and are willing to work, but it’s just the way it is set up. It, the mother and the children are better off if the husband isn’t working or if the husband isn’t there. And this breaks up so many poor families.
Friedman: One of the saddest things is that many of the children whose parents are on welfare will in their turn end up in the welfare trap when they grow up. In this public housing project in the Bronx, New York, 3/4’s of the families are now receiving welfare payments.
Well Mr. Brown wanted to keep away from this kind of thing for a very good reason. The people who get on welfare lose their human independence and feeling of dignity. They become subject to the dictates and whims of their welfare supervisor who can tell them whether they can live here or there, whether they may put in a telephone, what they may do with their lives. They are treated like children, not like responsible adults and they are trapped in the system. Maybe a job comes up which looks better than welfare but they are afraid to take it because if they lose it after a few months it maybe six months or nine months before they can get back onto welfare. And as a result, this becomes a self-perpetuating cycle rather than simply a temporary state of affairs.
Things have gone even further elsewhere. This is a huge mistake. A public housing project in Manchester, England.
Well we’re 3,000 miles away from the Bronx here but you’d never know it just by looking around. It looks as if we are at the same place. It’s the same kind of flats, the same kind of massive housing units, decrepit even though they were only built 7 or 8 years ago. Vandalism, graffiti, the same feeling about the place. Of people who don’t have a great deal of drive and energy because somebody else is taking care of their day to day needs because the state has deprived them of an incentive to find jobs to become responsible people to be the real support for themselves and their families.
I am currently going through his film series “Free to Choose” which is one the most powerful film series I have ever seen. TEMIN: We don’t think the big capital arose before the government did? VON HOFFMAN: Listen, what are we doing here? I mean __ defending big government is like defending death and taxes. […]
I am currently going through his film series “Free to Choose” which is one the most powerful film series I have ever seen worked pretty well for a whole generation. Now anything that works well for a whole generation isn’t entirely bad. From the fact __ from that fact, and the undeniable fact that things […]
Uploaded by YAFTV on Aug 19, 2009 Nobel Laureate Dr. Milton Friedman discusses the principles of Ronald Reagan during this talk for students at Young America’s Foundation’s 25th annual National Conservative Student Conference MILTON FRIEDMAN ON RONALD REAGAN In Friday’s WSJ, Milton Friedman reflectedon Ronald Reagan’s legacy. (The link should work for a few more […]
I am currently going through his film series “Free to Choose” which is one the most powerful film series I have ever seen. PART 5 of 7 MCKENZIE: Ah, well, that’s not on our agenda actually. (Laughter) VOICE OFF SCREEN: Why not? MCKENZIE: I boldly repeat the question, though, the expectation having been __ having […]
Milton Friedman’s solution to limiting poverty Liberals just don’t get it. They should listen to Milton Friedman (who is quoted in this video below concerning the best way to limit poverty). New Video Shows the War on Poverty Is a Failure Posted by Daniel J. Mitchell The Center for Freedom and Prosperity has released another […]
I am currently going through his film series “Free to Choose” which is one the most powerful film series I have ever seen. PART 4 of 7 The massive growth of central government that started after the depression has continued ever since. If anything, it has even speeded up in recent years. Each year there […]
I am currently going through his film series “Free to Choose” which is one the most powerful film series I have ever seen. PART 3 OF 7 Worse still, America’s depression was to become worldwide because of what lies behind these doors. This is the vault of the Federal Reserve Bank of New York. Inside […]
I am currently going through his film series “Free to Choose” which is one the most powerful film series I have ever seen. For the past 7 years Maureen Ramsey has had to buy food and clothes for her family out of a government handout. For the whole of that time, her husband, Steve, hasn’t […]
Friedman Friday:(“Free to Choose” episode 4 – From Cradle to Grave, Part 1 of 7) Volume 4 – From Cradle to Grave Abstract: Since the Depression years of the 1930s, there has been almost continuous expansion of governmental efforts to provide for people’s welfare. First, there was a tremendous expansion of public works. The Social Security Act […]
This article appeared in Forbes on October 3, 2011
The desperate search for an acceptable Republican Party presidential candidate continues. Republican leaders apparently are pushing New Jersey Gov. Chris Christie, who previously said no, to jump into the race.
The GOP’s frustration is palpable. Mitt Romney has been running for four years but generates little enthusiasm. Rick Perry was an instant front-runner before losing much of his support after unimpressive debate performances. Michelle Bachmann briefly streaked across the political firmament but now barely registers in the polls. Newt Gingrich committed political seppuku shortly after announcing his candidacy. Ron Paul’s support is fervent but limited.
However, the real Republican problem is positions, not candidates.
The Republican Party cheerfully ran up the national debt before surrendering the keys to Capitol Hill and the White House. President George W. Bush’s promiscuous war-making cost the U.S. thousands of lives and hundreds of billions of dollars, while making Americans less secure. The GOP centralized more power in Washington. Republican lawmakers managed to turn laudable opposition to tax hikes into a deplorable defense of the status quo.
Most of the GOP presidential candidates offer little new. Mitt Romney, the ultimate political weathervane, implemented ObamaCare in Massachusetts before there was ObamaCare. He now fervently defends Social Security, despite its design as a public Ponzi scheme. Gov. Perry talks of domestic budget cuts but on foreign policy appears to be Bush-lite, yet another hawk disconnected from reality. The sharpest dissent from big government conservatism comes from the candidates least likely to win the nomination: Rep. Paul, former Utah Gov. Jon Huntsman, and former New Mexico governor Gary Johnson, who has been excluded from most of the debates.
President Barack Obama obviously is vulnerable, as well he should be. The problem is not that he is responsible for all of America’s economic woes — no president “runs” the $15 trillion U.S. economy. But this president has no solution for slow growth and high unemployment other than spending more money, increasing the deficit, and running up the debt.
Unfortunately for the Republicans, simply denouncing President Obama for every ill known to man may not lead to victory. Voters dislike much current GOP orthodoxy. President Obama could win an election which turns into competitive political demonization and personal destruction.
Republicans should offer a positive agenda while addressing the party’s past failings. First, they should explain that current budget policy is unsustainable on both a short- and a long-term basis. Economist Larry Kotlikoff figures that America’s real public debt is $211 trillion, 15 times the nominal national debt. Public finance in states like California already looks a lot like that in Greece.
Unless Americans want to turn their entire incomes over to government, public spending must be cut, and cut sharply. And it must be cut across-the-board.
However, to regain lost credibility GOP politicians should lead with proposals to cut spending benefiting “their” interest groups. Corporate welfare should top any Republican Party list of budget cuts. Too often Republican apparatchiks have been pro-business rather than pro-free market, attacking financial transfers to the poor while endorsing subsidies for corporate America.
The GOP also needs to support significant reductions in military outlays. There is no more important responsibility for the U.S. government than protecting America. However, most of the Pentagon’s current activities have little to do with protecting America.
Instead, most U.S. forces currently defend prosperous, populous allies around the world. Europe has a larger GDP and population than America, yet continues to rely on Washington to provide most of NATO’s combat capability. Japan long had the world’s second largest economy but nevertheless relied on America for its protection. South Korea has 40 times the GDP of its northern adversary, but nearly 30,000 U.S. military personnel remain in the South, creating a “tripwire” for war.
Equally wasteful and far more costly in human terms have been nation-building exercises in Somalia, Bosnia, Kosovo, Iraq, Afghanistan, and more. Going to war in 2001 to punish the Taliban for hosting terrorist training camps made sense. Staying at war a decade later in an attempt to create a competent, honest centralized government in Kabul is foolish.
Also required is an honest discussion of Social Security’s and Medicare’s funding crises. Neither is financially sustainable and both risk triggering generational conflict. The longer Congress puts off addressing these issues the costlier will be any solution.
The GOP should reaffirm its opposition to tax hikes, but emphasize that taxes can be kept low only if outlays are reduced. Endless borrowing threatens a financial death spiral of increased debt, higher interest payments, slower economic growth, and lower investor confidence. The U.S. now is on the road to fiscal ruin.
Moreover, Republicans should endorse President Obama’s attack on special interest tax breaks. Not all tax preferences are equally bad, but the narrower the tax break the more it approaches a special interest subsidy. The GOP should push legislation that simultaneously kills dubious tax “loopholes” and reduces overall marginal tax rates. Republicans should similarly respond to tax proposals from President Obama or congressional Democrats. Rather than defend the undefendable, the GOP should challenge yet another form of corporate welfare.
With job creation at issue, Republicans should develop a list of regulations and taxes which interfere with a growing economy. Political candidates enjoy denouncing “over-regulation” in the abstract, but they would be more convincing if they targeted specific policies costing real jobs. The House GOP should follow the example of its earlier majority which held hearings on regulatory abuses.
Republicans should challenge politically popular public agencies. For instance, the government-sponsored enterprises Fannie Mae and Freddie Mac were at the epicenter of the housing and financial crises. The GOP rightly criticized Democrats for not including the two GSEs in last year’s financial “reform” bill. But so far House Republicans have done nothing to close Fannie and Freddie, which continue to lose money.
Deregulation should include proposals to make more market friendly controls which are necessary even in a free society. After all, few Americans want to breathe dirty air or swim in dirty water. And there is no simple market solution to such problems. But people don’t want to needlessly waste money and destroy jobs when cleaning up the environment.
The Republicans also should offer a more restrained foreign policy. Doing so is necessary to curtail military outlays — in effect, the defense budget is the price of a nation’s foreign policy, since the more Washington seeks to do in the world, the more military force it requires. So long as the U.S. government is determined to dominate every region of the globe against every power, it will have to spend as much on the military as the rest of the world combined. Indeed, real, inflation-adjusted military outlays have doubled over the last decade, and today are higher than at any point during the Cold War, Korean War, and Vietnam War.
But a more humble foreign policy also would be a better foreign policy. Rather than engage in social engineering abroad, Republican politicians should leave friendly states with responsibility for international problems. If there is a problem in the Balkans or North Africa, Europe should address it. Japan, South Korea, Australia, and other democratic nations should cooperate to restrain potential Chinese aggressiveness. Only the Afghans can create a sustainable political order, of whatever form, in Afghanistan.
The GOP should simultaneously support a globally engaged America and Americans. For instance, international cooperation can help meet humanitarian, environmental, and other problems which transcend national boundaries. Whatever U.S. policy toward illegal aliens, Americans should expand the legal immigration of entrepreneurial professionals.
Trade benefits Americans. Washington’s failure to ratify the free trade agreement with South Korea is beyond foolish. A commercial war with China would hurt Americans while poisoning the most important bilateral relationship of the 21st century.
Other issues also deserve attention — such as expanding educational opportunities for children stuck in poorly performing public schools. Even here, however, the GOP needs to break with recent Republican Party orthodoxy. President Bush and the Republican Congress centralized even more authority in Washington with the “No Child Left Behind” legislation.
Perhaps Chris Christie or some other late electoral entrant will revolutionize the GOP presidential sweepstakes. But without good ideas well-expressed, the GOP could still end up outside the White House looking in. The Republican Party deserves to win in 2012 only if it recognizes that it deserved to lose in 2008.
Some folks say they want “austerity,” but that’s largely a code word for higher taxes. They’re fighting against the people who say they want “growth,” but that’s generally a code word for more Keynesian spending.
And then, to get me even more irritated, lots of people support bailouts because they supposedly are needed to save the euro currency.
When I ask these people why a default in, say, Greece threatens the euro, they look at me as if it’s the year 1491 and I’ve declared the earth isn’t flat.
So I’m delighted that the Wall Street Journal has published some wise observations by a leading French economist (an intellectual heir to Bastiat!), who shares my disdain for the current discussion. Here are some excerpts from Prof. Salin’s column, starting with his common-sense hypothesis.
…there is no “euro crisis.” The single currency doesn’t have to be “saved” or else explode. The present crisis is not a European monetary problem at all, but rather a debt problem in some countries—Greece, Spain and some others—that happen to be members of the euro zone. Specifically, these are public-debt problems, stemming from bad budget management by their governments. But there is no logical link between these countries’ fiscal situations and the functioning of the euro system.
Salin then looks at how the artificial link was created between the euro currency and the fiscal crisis, and he makes a very good analogy (and I think it’s good because I’ve made the same point) to a potential state-level bankruptcy in America.
The public-debt problem becomes a euro problem only insofar as governments arbitrarily decide that there must be some “European solidarity” inside the euro zone. But how does mutual participation in the same currency logically imply that spendthrift governments should get help from the others? When a state in the U.S. has a debt problem, one never hears that there is a “dollar crisis.” There is simply a problem of budget management in that state.
Because European politicians have decided to create an artificial link between national budget problems and the functioning of the euro system, they have now effectively created a “euro crisis.” To help out badly managed governments, the European Central Bank is now buying public bonds issued by these governments or supplying liquidity to support their failing banks. In so doing, the ECB is violating its own principles and introducing harmful distortions.
Last but not least, Salin warns that politicians are using the crisis as an excuse for more bad policy – sort of the European version of Mitchell’s Law, with one bad policy (excessive spending) being the precursor of additional bad policy (centralization).
Politicians now argue that “saving the euro” will require not only propping up Europe’s irresponsible governments, but also centralizing decision-making. This is now the dominant opinion of politicians in Europe, France in particular. There are a few reasons why politicians in Paris might take that view. They might see themselves being in a similar situation as Greece in the near future, so all the schemes to “save the euro” could also be helpful to them shortly. They might also be looking to shift public attention away from France’s internal problems and toward the rest of Europe instead. It’s easier to complain about what one’s neighbors are doing than to tackle problems at home. France needs drastic tax cuts and far-reaching deregulation and labor-market liberalization. Much simpler to get the media worked up about the next “euro crisis” meeting with Angela Merkel.
Last weekend, the people of France took a sharp turn to the left, and the rest of Europe may be on the brink of rebuking its recent tack toward fiscal responsibility. With Sunday’s election of French Socialist leader Francois Hollande, France has leapt backward toward the policies that have helped sink the continent in a sovereign debt crisis. Disturbingly, the big government platform Hollande campaigned on is all too familiar to the American people, and if the United States is not careful, it could suffer the same fate as its European allies.
Hollande sailed to victory by appealing to an electorate dissatisfied with having to face necessary cutbacks, proclaiming that he is “proud to have been capable of giving people hope again.” That brand of hope called for a change from President Nicolas Sarkozy’s relatively conservative policies — in his first term, Sarkozy worked to reduce the number of public sector employees, eliminate the 35-hour work week, reform the university system and cut taxes.
Hollande, by contrast, promised to raise taxes on big corporations and wealthy individuals, implement a top rate tax of 75 percent, increase public spending by 20 billion euros, raise the minimum wage, hire 60,000 more teachers, and lower the retirement age from 62 to 60 for some workers. He says he is “president of the youth of France” and believes that government stimulus, not cutting spending, is the right way to achieve economic growth.
If you’ve been a student of President Obama’s presidency, much of this should sound familiar. President Obama came into office on a promise of hope and change, appealed to young Americans and promised renewed prosperity. His solution was more government spending to the tune of a near-trillion-dollar stimulus, a government-run health care plan, a bailout of government unions, and a call for higher taxes on wealthy Americans and corporations.
The difference between the United States and France is that the latter is much further down the path of a social welfare state. Hollande’s proposals are not a new direction, they’re merely a return to form. France is notoriously emblematic of the European way of life. As Daniel Hannan, a member of the European Parliament, describes in Why America Must Not Follow Europe, “Long vacations, paternity leave, a higher minimum wage, a short working week: What’s not to like? The trouble is that eventually the money runs out.”
In France, the money has indeed run out. The country’s public debt now stands at more than 80 percent of GDP, government spending is at 55 percent of GDP, the tax burden is equivalent to 42 percent of total domestic income, and it hasn’t balanced its budget since 1974.
The United States, unfortunately, is headed in much the same direction. As Heritage’s Federal Budget in Pictures shows, U.S. debt stood at 67 percent of GDP in 2011, but unless the United States controls its spending, its debt will surpass that of France, Italy and even Greece, hitting 187 percent of GDP by 2035. Spending on Medicare, Medicaid, the Obamacare subsidies, and Social Security will devour all revenues by 2045, and taxes are soaring past their highest levels ever. And as for the budget, the U.S. Senate hasn’t passed one in three years — let alone brought it to balance.
The world has seen what lies at the end of this road to perdition. Though France is a prime example of a country that is spending itself into crisis, Greece has already gone beyond that tipping point. The country’s debt has exploded, 21.8 percent of its people are unemployed, and among the youth, more are out of work than have jobs. In the face of belt-tightening measures that came as a condition of an EU/IMF bailout — which include public sector pay cuts and pension reductions — the country turned to open political revolt with violent riots in the streets. In elections this week, Greek voters rejected the political parties that support fiscal responsibility and instead turned toward the Radical Left.
If there is any bright spot in Europe’s far left turn, it came Friday in the re-election of Boris Johnson, the Conservative mayor of London. Johnson campaigned for tax cuts and eliminating public sector waste in the hopes of spurring job growth. But alas, France’s return to the deeply entrenched socialist policies could signal an end to the fiscally responsible measures that German Chancellor Angela Merkel has championed, leading to economic disaster.
Though Europe is an ocean away, the policies that are sinking the continent could have the same impact in the United States if replicated here. Endless spending has dire consequences, and if America is not careful, it could follow Europe’s path to economic ruin.
_________________
Thank you so much for your time. I know how valuable it is. I also appreciate the fine family that you have and your commitment as a father and a husband.
Sincerely,
Everette Hatcher III, 13900 Cottontail Lane, Alexander, AR 72002, ph 501-920-5733, lowcostsqueegees@yahoo.com
What F.A. Hayek saw, and what most all his contemporaries missed, was that every step away from the free market and toward government planning represented a compromise of human freedom generally and a step toward a form of dictatorship–and this is true in all times and places. He demonstrated this against every claim that government control was really only a means of increasing social well-being. Hayek said that government planning would make society less liveable, more brutal, more despotic. Socialism in all its forms is contrary to freedom.
Nazism, he wrote, is not different in kind from Communism. Further, he showed that the very forms of government that England and America were supposedly fighting abroad were being enacted at home, if under a different guise. Further steps down this road, he said, can only end in the abolition of effective liberty for everyone.
Capitalism, he wrote, is the only system of economics compatible with human dignity, prosperity, and liberty. To the extent we move away from that system, we empower the worst people in society to manage what they do not understand.
__________
Thank you so much for your time. I know how valuable it is. I also appreciate the fine family that you have and your commitment as a father and a husband.
Sincerely,
Everette Hatcher III, 13900 Cottontail Lane, Alexander, AR 72002, ph 501-920-5733, lowcostsqueegees@yahoo.com
The Heritage Plan Would Reverse Trajectory of Unsustainable Debt
Everyone wants to know more about the budget and here is some key information with a chart from the Heritage Foundation and a video from the Cato Institute.
Without significant spending reforms, the national debt is projected to reach 185 percent of GDP by 2035. Under the Heritage plan, federal spending would be reduced by about half, which would dramatically lower the debt to 30 percent.
Senator Mark Pryor wants our ideas on how to cut federal spending. Take a look at this video clip below:
Senator Pryor has asked us to send our ideas to him at cutspending@pryor.senate.gov and I have done so in the past and will continue to do so in the future.
On May 11, 2011, I emailed to this above address and I got this email back from Senator Pryor’s office:
Please note, this is not a monitored email account. Due to the sheer volume of correspondence I receive, I ask that constituents please contact me via my website with any responses or additional concerns. If you would like a specific reply to your message, please visit http://pryor.senate.gov/contact. This system ensures that I will continue to keep Arkansas First by allowing me to better organize the thousands of emails I get from Arkansans each week and ensuring that I have all the information I need to respond to your particular communication in timely manner. I appreciate you writing. I always welcome your input and suggestions. Please do not hesitate to contact me on any issue of concern to you in the future.
I just did. I went to the Senator’s website and sent this below:
Over the past decade, Congresses and Presidents haveundertaken a
surge of spending that has accelerated America’s speed along the road to
economic ruin. Since 2000, non-defense discretionary outlays have expanded 50 percent faster than inflation. Antipoverty spending has risen 83 percent faster than inflation, and other programs have grown rapidly. Despite multiple government audits that have shown many programs to be duplicative or ineffective, no significant federal program has been eliminated in more than a decade. Government continues to grow, financed by taxes on Americans and an explosion of borrowing that is imposing huge additional burdens on future generations.
Thus, although the major entitlement programs are the primary driver of
long-term spending and debt, Congress must take tough action on discretionary programs and smaller entitlement programs to reach a balanced budget and ensure that federal spending is smaller, more effective, and more efficient.
Under the Heritage plan, non-defense discretionary spending—appropriated programs such as foreign aid, K–12 education, transportation, health research, housing, community development, and veterans health care, which account for 4.5 percent of GDP—is reduced to 2.0 percent of GDP by 2021. These reforms will reduce the burden of government, thereby empowering families and entrepreneurs and promoting economic prosperity.
In addition, antipoverty spending is reformed. Obamacare is repealed, as
noted earlier, and replaced with an alternative solution to uninsurance and high costs. Agriculture and education programs are structurally reformed. The central goal for defense is to guarantee national security as prudently and economically as possible. With improvements in efficiency, we estimate that defense needs will require spending approximately 4 percent of GDP for the foreseeable future.
Rather than across-the-board spending reductions, which would not set true priorities for government, the Heritage plan follows six guidelines in designing reforms:
The federal government should focus on performing a limited
number of appropriate governmental duties well while empowering state and local governments, which are closer to the people, to address local needs creatively in such areas as transportation, justice, job training, the environment, and economic development.
Functions that the private sector can perform more efficiently
should be transferred to the private sector.
Duplicative programs should be consolidated both to save money
and to improve government assistance.
Federal programs should more precisely target those who are
actually in need, which means reducing aid to large businesses and upper-income individuals who do not need taxpayer assistance and enforcing program eligibility rules better.
Outdated and ineffective programs should be eliminated.
Waste, fraud, and abuse should be cleaned up wherever found.
By following these six guidelines, the Heritage plan produces a more
effective and efficient government and promotes stronger economic growth.
Milton Friedman said that getting George Bush I to be his vice president was his biggest mistake because he knew that Bush was not a true conservative and sure enough George Bush did raise taxes when he later became President. Below is a speech by George W. Bush honoring Milton Friedman:
Milton Friedman Honored for Lifetime Achievements 2002/5/9
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President Obama c/o The White House
1600 Pennsylvania Avenue NW
Washington, DC 20500
The USA’s grand economy was built by the free enterprise system and basically the government got out of the way most of the time. That is what works everywhere you have wealth built up. If socialists get their way then they will piggyback on the success the capitalists have created and many times when socialist policies take over things start to fall apart with the vast welfare states that are created. Take a look at this fine article by Dan Mitchell of the Cato Institute below.
To answer the question in the title, it means you need to read the fine print.
This is because we have a president who thinks the government shouldn’t confiscate more than 20 percent of a company’s income, but he only gives that advice when he’s in Ghana.
After the Greek elections, which saw the defeat of the pro-big government Syriza coalition and a victory for the supposedly conservative New Democracy Party, here’s some of what Politico reported.
President Barack Obama on Monday called the results of Greece’s election a “positive prospect” with the potential to form a government willing to cooperate with Europe. “I think the election in Greece yesterday indicates a positive prospect for not only them forming a government, but also them working constructively with their international partners in order that they can continue on the path of reform and do so in a way that also offers the prospects for the Greek people to succeed and prosper,” Obama said after a meeting with the G-20 Summit’s host, Mexican President Felipe Calderon.
In other words, it’s “positive” when other nations reject big government and vote for right-of-center parties, but Heaven forbid that this advice apply to the United States.
Interestingly, it’s not just Obama who is rejecting (when talking about other nations) the welfare-state vision of bigger government and higher taxes.
… it is far from clear, especially after the French election, that there is any kind of majority or even plurality support for responsible policies.
Remarkable. Larry Summers is dissing Francois Hollande and the French people by implying they want irresponsible policies, even though the Hollande’s views about Keynesian economics and soak-the-rich taxation are basically identical to the nonsense Summers was peddling while in the White House.
It’s almost enough to make you cynical about America’s political elite. Perish the thought!
_________
Thank you so much for your time. I know how valuable it is. I also appreciate the fine family that you have and your commitment as a father and a husband.
Sincerely,
Everette Hatcher III, 13900 Cottontail Lane, Alexander, AR 72002, ph 501-920-5733, lowcostsqueegees@yahoo.com
Total Government Spending Has More Than Doubled Since 1965
Everyone wants to know more about the budget and here is some key information with a chart from the Heritage Foundation and a video from the Cato Institute.
State and local government spending per household imposes a significant, and growing, burden on taxpayers on top of federal spending. In 1970, median household income was $17,839 greater than total government spending per household, compared to only $2,431 in 2009.
PER-HOUSEHOLD SPENDING, IN INFLATION-ADJUSTED DOLLARS (2010)
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Source: U.S. Census Bureau, White House Office of Management and Budget, and 2011 Economic Report of the President.
The charts in this book are based primarily on data available as of March 2011 from the Office of Management and Budget (OMB) and the Congressional Budget Office (CBO). The charts using OMB data display the historical growth of the federal government to 2010 while the charts using CBO data display both historical and projected growth from as early as 1940 to 2084. Projections based on OMB data are taken from the White House Fiscal Year 2012 budget. The charts provide data on an annual basis except… Read More
Authors
Emily GoffResearch Assistant
Thomas A. Roe Institute for Economic Policy StudiesKathryn NixPolicy Analyst
Center for Health Policy StudiesJohn FlemingSenior Data Graphics Editor
Milton Friedman and friends.DOWNLOADS: 36
Federal Spending Is Outpacing Inflation
Mandatory Spending Has Increased Five Times Faster Than Discretionary Spending
The Daily Hatch 