Economic Policy [Libertarian Starter Pack]

[By Ben Noble]

Welcome to another installment of the Libertarian Starter Pack. My goal here is to let those not interested in voting for Hilary Clinton or Donald Trump know that there is another option. The Libertarian Party.

Today I want to talk about the libertarian stance on the economy. Perhaps the best way to sum it up is to say that the government should not interfere in the economic activities of individuals and businesses until some sort of harm or fraud has occurred. In other words, reacting to perceived future crime is not the role of the government.

YouTube version [ https://youtu.be/H-QqqjNNxb4/ ]

I’ll break this topic into two parts: taxes and regulation.

Taxes

It has been said that fines are taxes for going bad and taxes are fines for doing good. Each dollar that is taxed out of your pocket is a dollar that you can’t spend or save. Both spending and saving are vital to an economy. Spending sends messages out to the rest of the economy about what products and services are in demand. Savings allow banks to make loans to entrepreneurs and businesses so that they can make investments that they otherwise would not be able to. Taxes pull money out of both of these processes and hurts employment and innovation. It is difficult to see exactly what economic activities are not taking place due to taxation, but it is an unavoidable result.

That being the practical argument for low taxes, there are also ethical arguments for low taxes. Whenever the government taxes something, whether it is an individual’s income or property, a purchase, or returns on an investment, the underlying assumption is that the government claims ownership over that thing. If the government doesn’t get its cut of the transaction there will be punishment either in cash or freedom. Libertarians view the income and property taxes as the greatest violations of private property and would have those abolished as soon as possible. Some libertarian’s favor The Fair Tax, a national sales tax, in place of the income tax. Simply put, if slavery is the confiscation of 100% of the products of your labor, when does it stop being slavery? Before the creation of the income tax in 1913 the US had roads, fire departments, police, a military and all the other basic services people associate with small government.

In 2014 the government taxed over $3 trillion dollars out of the economy. For comparison, the US GDP in 2014 was $17.6 trillion. That’s 17% of the economic activity in the US. Does the US government think it owns the product of our labor? I think so. The only thing an individual is owed is the ownership of the wealth he creates or earns.

Regulation

Recently, a study from the Mercatus Center at George Mason University estimated that the US economy might have been $4 trillion larger now if regulatory accumulation had halted in 1980.

“Compared to a scenario where regulations are held constant at levels observed in 1980, the study finds that the difference between the economy we are in and a hypothetical economy where regulatory accumulation halted in 1980 is approximately $4 trillion.”

The practical and ethical arguments for minimal regulation on the economy are very similar to those made for low taxes. There is a compelling argument that regulation steals money and efficiency from businesses. Compliance with government regulation and taxation is very costly. In addition, excessive regulation is also an admission that government owns all the businesses in its jurisdiction. Sure, enforcing penalties on businesses that cause harm can be seen as legitimate, but anything beyond that is the same as the government dictating how a business is to be run. If the government has a significant say in how you run your business, is it you or the government that owns it?

Data points and statistics are good, but I find the ethical argument for economic freedom the most persuasive. After all, we know that statistics are not immune to manipulation. In the US we like to say that we are the shining beacon of freedom in the world. Are we living up to that rhetoric if the government all but declares ownership of its citizen’s income, property, and businesses?

I imagine all this might be a bit more palatable for Republicans to accept. For those that identify or typically vote Democrat: I know that you dislike the rigged game that big business gets to take advantage of and view deregulation as laughable. Let me briefly address your concerns. The massive body of regulation gives cover for politicians to grant special tax breaks, bailouts, and protections to big business. We now have the largest body of regulation and regulatory agencies we have ever had over the economy and the problem has only gotten worse. The power to regulate is also the power to grant special privileges. They are opposite sides of the same coin. Big business gives massive amounts of money to both parties. We all know that they have most politicians in their pockets. If big business actually desired a free market they would be funding the Libertarian Party, but they don’t. What else do you need to know that the Libertarian Party is no friend to crony capitalists?

Live Free.

 

Sources:

What If the US Regulatory Burden Were Its Own Country?
http://mercatus.org/publication/what-if-us-regulatory-burden-were-its-own-country/ ]

The Cumulative Cost of Regulations
[ http://mercatus.org/publication/cumulative-cost-regulations/ ]

U.S. tax revenues at record high. Who’s paying?
[ http://money.cnn.com/2015/08/14/news/economy/us-government-taxes-record/ ]

Federal Receipt and Outlay Summary
[ http://www.taxpolicycenter.org/statistics/federal-receipt-and-outlay-summary/ ]

Ron Paul says federal income tax rate was 0 percent until 1913
[ http://www.politifact.com/texas/statements/2012/jan/31/ron-paul/ron-paul-says-federal-income-tax-rate-was-0-percen/ ]

GDP Graph [ https://research.stlouisfed.org/fred2/series/GDP/ ]

Thumbnail sourse:

Money [ https://www.flickr.com/photos/76657755@N04/7408506410/in/photolist-chEwR9-bH1gac-bt4mNt-aFAQEv-dK2oa7-s9qRgg-a2YSa6-97gKwe-nvfmAY-fTr2eB-8HWvej-omrcRK-5aSAmS-dK2osL-rDMhNP-aJdoEV-aFB2Ba-rAG5dm-4a8cF1-8BwCSj-ako44b-8Gn2wS-aQaDvx-6c6Q6r-djNX5-bbeUhH-aQaDED-biaQuZ-BrPJ2-7HKuTk-bn4oq2-d3koK-2gXbvF-7xFCXW-5noirC-aFAPtx-5rzm-az2SCh-677q9C-5nj3tT-QxcaH-5QKWwC-fBsQs-apUnh-83uUfE-i6VAS8-aFDgrH-713m5r-5rzn-cGH7UQ/ ]

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Piggy Bank and Thief [ https://www.flickr.com/photos/pasukaru76/5296559285/in/photolist-953fxF-cbDNZN-8AiszU-5Mhn4n-5bRE4m-2cW7oo-5veZmR-5s5fSn-5TNJZV-d8CLaS-4p1584-65agR7-q8ZPc-dN92CE-9VBNtL-bxDhoE-8MCUGP-s61mqS-7wyHS-smF8UJ-fKu9zd-s61hZy-bvpzT5-bxDdFC-9Vz162-bLxWgt-9VBTZs-7UotTg-7wpu1H-9VBwHY-e66cyp-c3sJ8W-9izvJv-9VzMFc-pE5pv5-92xhM3-jvAEg-9VBDFb-afG17b-5Vpo2B-cpMPZm-dareJt-2baVpG-bLxWVn-2giXpK-5qF2kc-5Y7qtp-4HtddD-77iADV-ekKHUM/ ]

Handcuff [ https://www.flickr.com/photos/v1ctor/6711234961/in/photolist-be3QkB-7WG6YA-bk6wwG-onpfx-nCFveM-9KpdMV-8ZghGC-KtQet-cjV4vQ-awUSmc-bk6whj-dkjS4M-aaAXRL-5CwRT2-axkz6a-9mqtkP-5fVLzf-4bk1A9-4iCP2G-fzZPtb-oCS3Ri-y6TC4-oiGkmt-oiMPnG-o2uxnk-9Ey5rT-7YoCi2-9Ey5sP-7QiQN7-625E5z-5hv9HU-4Zw7yU-aNLcQ-9b8JYi-6ikerq-4Zw7YN-5vyPSP-9Ajm-2k8BUs-2wGaqf-ao5HKT-9uzzTc-bk6vSj-2wGapE-2wGarq-4mrFra-bnyoh1-5BTJnu-cCYFa1-2wGasf/ ]

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