“Our practical choice is not between a tax-cut deficit and budgetary surplus. It is between two kinds of deficits: a chronic deficit of inertia, as the unwanted result of inadequate revenues and a restricted economy; or a temporary deficit of transition, resulting from a tax cut designed to boost the economy, increase tax revenues, and achieve . . . a budget surplus.” John F. Kennedy


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May 21 2010

Social Justice and Economic Structure

C.M. Phippen

I need some responses from any of you out there who think that we need, through force of law, to seek greater social or economic justice. I talk with a lot of liberals who see this as a major priority but very few who can verbalize precisely what that means. Some of those I know are fine with a socialist society, others say there’s no relation between socialism and social justice. Some are highly offended by our capitalist society, while others say that we can seek greater social justice within our current system but offer no means of doing so except through the repression of the free market and free choice (which sounds to me like being offended by our capitalist system, just without saying so).

The one consistently unanswered question, though, from all those who say that social justice and socialism have nothing in common is: what is the general outline for the new economic system on which this newly just society would be based?

I come from a background where we all help each other and when someone is in need, we work together to help enable them to provide for themselves unless they’re completely incapable of doing so. I was raised by parents who often provided opportunities for those in need to work and support their families through their own labors, never forced to feel inferior or incapable.

Those seeking “social justice” tend to talk about our responsibility to help others, all the while demanding someone else pay for it, thereby violating their right to their private property and fruits of their own labors. That just doesn’t make any sense to me.

I also have frequently heard the argument of late that communities coming together to provide infrastructure and public safety mechanisms through the taxation of its members is a form of socialisms and thus, no different than income redistribution. Let’s just discredit that argument from the start – government was formed by the people in order to create an avenue for doing those things they weren’t able to do individually such as infrastructure development, public safety, national defense, etc.

Subverting the rights of certain groups in order to reward other groups was never the purpose for which this country was formed and in fact violates the most basic principles of a free society. If the wealthy were seizing the private property of the poor, it would be unjust; why is the reverse not true?

Let’s have a discussion. Rather than knee-jerk reactions to what we view as problems in society, let’s think the problems and the solutions through to where they ultimately lead us. What does this economic structure look like? If we plan on “fundamentally transforming” the most free, opportunity-granting country in the history of the world, we ought to at least understand what the end will be.

May 8 2010

Greece, US, and Economic Reality

C.M. Phippen

Among weeks of civil unrest that included at least three deaths, numerous injuries, and widespread property damage, the Greek government has agreed to major economic adjustments in exchange for an IMF rescue. Among the measures required is the opening up of private markets in crucial areas of the economy, namely health care, transportation, and energy.

These steps will be taken in conjunction with tax increases and public sector pay freezes. The ability of the government to lay off public sector workers, whose “low levels of productivity and high wages are a big contributor to Greece’s debt problems,” should also substantially assist the country’s recovery.

It seems like the only part of this equation proposed here in the US, with our debt load ever closely mirroring that of Greece, is the tax increases. According to Art Laffer, our entire federal revenue could be replaced with a flat tax of 11% on individual gross income and 11% on net business income, even without accounting for the greater economic growth and increased revenue which would certainly follow. That solution would be much too simple and would decrease the power of politicians in Washington. It’s much simpler to talk about wealth redistribution and increase the taxes on the already over-taxed, even if it means stunting the longer-term economic growth of our economy.

The greater question is why we’re currently headed in the very direction Greece is being forced to leave because of the structure’s inherent unsustainability. If government-run health care, transportation, and energy are bad for an economy, why are we instituting such systems in our country in the midst of the greatest economic downturn in 80 years? If public sector workers, supported by unions who negotiate with government officials not representing the interests of taxpayers, end up with higher than average pay and benefits ($79,197 for federal workers v. $50,028 for private sector employees; with benefits, $119,982 federal v. $59,909 private) and their ranks are increasing faster than the ranks of those footing the bill, how do we grow ourselves out of a Greek-like mess?

In 1988, the debt was 51% of GDP and by 2020, it’s projected to hit 90%. Either we follow Greece now, before it becomes too late for us, or we just unite as a country, hold hands and chant, “Hope and change.” Surely that will save us.