15 Sep 2010

Fiscal Euphemisms

Shameless Self-Promotion 5 Comments

This was my Mises Daily on Monday; because I’m still in Vegas I haven’t had much spare time to blog… In any event I was shell-shocked by a Martin Feldstein op ed, which (naturally) Greg Mankiw loved. An excerpt:

“But once we run Feldstein’s prose through the Orwellian Translator, we realize what he’s actually saying: The government needs to raise taxes on households and businesses right now, so that it won’t have to do it later.”

5 Responses to “Fiscal Euphemisms”

  1. senyoreconomist says:

    I think that a very strong libertarian case can be made that the belief that was held by Friedman and is held by other libertarians that tax cuts are always good is, from a libertarian point of view, complete and utter nonsense. I think that a very strong case can be made that one of the reasons government has grown so much is because people have not been forced to pay directly for the full cost of that growth by way of taxes. People no longer understand the concept that government spending has a cost to it. If people really wanted to cut the size of government, in the long run, then what should be done is to have the government raise taxes immediately to completely eliminate the deficit. Do this without any spending cuts. When people then see the resulting chaos, then the chances for cutting government would be very good indeed. I mean, come on, why do you think April 15 is so far from election day? If libertarians really want to cut the size of government in the long run, then they should be walking around with placards that say, “TAX HIKES NOW!!!”

    • Dan says:

      I get your point but the chaos is coming whether we raise taxes or do nothing. I would rather have my money and be able to prepare for what is coming than advocate the government steal more for me. I think a better proposal along the lines you propose is to stop taking taxes out of checks and have people write out a check each month to the government. If you got a monthly statement and saw how big the checks were each month I think that would have the same effect.

    • KP says:

      And more people will become anti-war once the draft is re-instituted. I don’t think many libertarians think the ends justifies the means.

  2. senyoreconomist says:

    I think that the mistake that both Dan and KP are making is that you both think you are not paying anything if the government is not taxing you. If the government is spending, then you are still paying for it even if you are not taxed. If you are not taxed, then the government will simply pay for their endevors (did I spell that right?) by way of borrowing or printing money. Both actions will affect the population in general, inclulding, I suspect, both of you. To say something nice about Friedman, do as he said and watch the spending, that is the important stat. to watch. To address KP specifically, I don’t think that his draft analogy holds because If we don’t have a draft, then you don’t have to go, period. (Now, unfortunately, many people in lower income groups may feel like they don’t have any choice but the military, but still, there is more choice than if the government had a draft and said that they had to go.) On the other hand, for reasons explained above, if you are not taxed, then you are STILL paying for it, just in indirect ways. My contention is that these indirect ways of financing produce a cognitive breakdown that is at the least destabilizing and at its most, extremely dangerous. By taxing directly for the full cost of spending, then this cognitive breakdown can be laregely eliminated. Both Dan and KP made good points that made me think, particularly KP’s draft analogy, but for reasons listed above, I will for now at least, stand by my original position. Thanks to both of you and if you have more to add, then please do so. I know that the beach in So.Cal. must be terribly nice this time of the year, but will the big dog himself be commenting on this? What’s up doc?

  3. KP says:

    If we use indirect affects then my analogy should still hold as American military ventures overseas and abroad still do effect the general population in varying ways. However, the direct/indirection distinction being made doesn’t seem relevant to my point of ends justifying means. Is it just to harm innocent people?