Dec 4, 2011

What Shall We Do with a Drunken Economy?

What shall we do with a drunken economy
What shall we do with a drunken economy
What shall we do with a drunken economy
Early in the century

Okay, so this will most likely not become the next big sea shanty hit, but it does describe the current unsteadiness of our economy. The song can just as readily be applied to the legislative and executive branches of (most notably) the early 21st century when it comes to their willingness to spend. In either sense I shall compare the current economic situation to a drunken mess, that is, the way in which a free market supporter views the United States’ economy.

The picture that some people create when it comes to saving our economy is to relate to that of a burning house. They state that the economic trouble represents flames burning everything we own. The only way to continue living then is to spend more money to repair or buy a new house. Once that new house is acquired then the economy will return to a more stable, and overall better, environment.

The free market image of the economy is that of a non-sober individual. In this picture, Congressional spending is considered the alcohol while the economy is personified. As the bartender (Congress) dishes out more and more rounds to the economy, it becomes more impaired. At the same time, however, the economy continues to live on false happiness that it experiences from its uninhibited state. Thus at first glance it appears everything is fine and possibly better than the economy in a sober state.

There are two paths the economy can take from this point. The first is that the economy can submit to its alcoholism and continue receiving its shots from the bartender. In this scenario the initial drunken happiness begins to wear off and it begins to become unstable. If the economy continues to drink, bringing the country further into debt, it will eventually black out, symbolizing an economic collapse.

The alternate scenario involves the economy admitting it has an addiction. It can begin a regiment to be weaned off its alcohol cravings. Then what would occur is a period of sobering up followed by a period of withdrawal. The happiness that was felt during the spending period will wear off and the road to recovery may seem harsh. This will be especially true under during the withdrawal stage. It may appear to be better to continue drinking away the depression (in both psychological and economic terms), but the sooner the intense spending stops, the faster and easier the period of recovery will be.

This analogy can be taken a step further to Congress’s relationship to the Federal Reserve. The Federal Reserve acts as the bartender while Congress becomes the drunk. In return Congress shares its alcoholic wealth with its friends that are high up on the economic ladder.

The question that thus remains is, “What shall we do with a drunken economy?”

Oct 6, 2011

"Ron Paul's Charity" Critique

Dr. Ron Paul is a Republican representative, 2012 presidential candidate, and strong believer in private charity. That last piece of information may sound out of place, but it aligns with his libertarian-leaning political positions. While most Democrats and Republicans have no intention of cutting government charity, Paul strays from his party and believes that individuals can provide the best aid for those living under unfortunate circumstances. However, a recent article from the Huffington Post, “Ron Paul’s Charity: Libertarian Views Fail Reality Test” by Christina Wilkie (the article is linked at the bottom of the post), states the impossibility of solely relying on private charity to provide for those in need. The real impossibility lies in the ability to know absolutely which form of charity is superior: government, private, or the perfect blend of both.

It is important to understand the libertarian’s belief in charity and how it differs from those who hold other political positions before moving on to the article. Libertarians believe that charity through taxation is not actually charity. A charity is a relationship between a voluntary donor and a voluntary receiver (the receiver technically has to accept the offer being given). Taxation replaces the voluntary role with coercion, that is, the donor becomes forced to give up something that belongs to him/her or face the threat of being sent to prison, fined, or suffering some other punishment. Those outside the libertarian influence find that force is justifiable as the end result is a noble one. The government assumes the role of Robin Hood and takes from the rich and gives to the poor. Please note that those who do believe in government charity also believe, for the most part, that private charity can coexist in society.

Getting back to Wilkie’s article, I would first like to discuss Dr. Leslie Lenkowsky’s statements. First, Lenkowsky should have given the name of the study he was referencing. Personally I would like to see how much Americans gave throughout the years, to which people/organizations they gave, and how charity measures up against tax rates and unemployment. I believe that at least part of this increase is due to technological advances, mainly the internet, having some impact of this statistic. Second, assuming the data is correct, Americans donate more money to charities today despite having higher income tax rates than in 1930 (the increase in tax rate is true according to The Tax Foundation) .1 One way to interpret the data then is to expect a further increase in taxes would lead to an increase in tax revenue and an increase in donation to private charity. It is hard to make an actual conclusion though because this study was not experimentally based, but only represents a correlation. One can look at this information with a more positive view of humanity and determine that people are becoming more generous. In that case maybe people today would give even more to charities if there were fewer and/or lower taxes. This stance also, however, cannot be proved or disproved by the study.

The article goes on to describe Paul’s recent experience with private charity. Kent Snyder, a fundraiser for Paul, had passed away in July from pneumonia. A pre-existing health condition excluded him from receiving health insurance. His lack of insurance resulted in substantial medical bills. Even with Paul and Snyder’s other friends and family donating money they were unable to pay all the expenses.

Cases similar to the one above make government programs such as universal healthcare seem appealing. Libertarianly speaking, there are alternate solutions to this problem. In fact, doing the opposite, that is, removing all government run healthcare programs would save the tax payer money. In return, he would have more money to spend on his own health choices. Government healthcare programs and regulations also have the risk of increasing the cost of private healthcare. Government does not have the same incentives as a private business does. They can charge above market prices because of the monopoly they have over the business. Citizens are forced to buy the government service whether they want/need to or not. Regulations, such as forcing insurance agencies to accept someone despite their current health, can increase the price of healthcare. Other regulations such as not allowing certain drug to be used or restricting the use of atypical medical practices (i.e. non science based treatments) can increase prices on the practice as well as limit the consumer’s medical path choice. Removal of government would allow for more competition among insurance agencies offering the best product at the best price.

Now that I have gone completely off topic, let us return to charity. If all the above happens to fail and the individual cannot find a health insurance plan either because it would be too expensive or no company would cover him, he can opt for charity. Paul says in Wilkie’s article that churches would be able to provide help. Paul’s theory is debunked by General Secretary James Winkler of the United Methodist Church who declares it impossible. However, this is assuming current conditions continue. Under a more libertarian government it may be possible. But it doesn’t have to be churches alone that handle those who need medical help. Clinics and hospitals set up by private charities can be created to support those in need.

You may be asking where we can find the money to invest in these charities. After all, we have already learned that a combined partnership of private charity and revenue raised by government in the form of taxes is still not enough today. Even if the libertarian theory is correct about people donating more with less taxation, would it be enough to offset and exceed the money made through taxation? Wouldn’t it be better to simply raise taxes to pay for this?

To the person who believes we should raise taxes, I would like to know: On whom should the government raise taxes? If your answer is the rich, what defines rich? How much should we raise taxes? Aside from health care, what other programs should the government invest in?

But where else can we get money if we’re not taxed more? My solution: Warren Buffett. Buffett has stated that he wanted to be taxed more. If he wants to give more of his money away, why doesn’t he just do it? Unless there is some crazy law that I do not know about that makes it illegal to give too much there is nothing stopping him. And he is not the only person who believes in giving more. Celebrities such as Seth MacFarlane and Jerry Springer have also stated they wanted to have their taxes increased. Again, why wait until you are forced to give your money? If you want to donate your money, my advice is to donate it. This would add lots to the charity fund and provide many families and individuals with a better chance at increasing their living standard.

“Ron Paul’s Charity: Libertarian Views Fail Reality Test”


Sep 8, 2011

Democrats, Republicans, and the Other Guys

With the United States exceeding record levels of national debt, civil liberties diminishing, and a growing military power around the world, government’s power appears to be increasing at exponential levels. But as these policies continue, citizen’s trust and faith in government’s ability to fix the current situation also seem to be on the fall. America’s two great parties (I should probably specify that I am referring to the Democrats and Republicans as many would yield from using the adjective “great”) have again and again made promises to fix at least one of the major problems stated above, but failed to deliver. From these observations it can be concluded that a change is needed from the same two parties. However, not everyone would agree to that conclusion. These people are those that either remain loyal to their party (yes, these people still exist) or believe the only way a new ideology can come to power is through change from within the party.

In this article we will take a look at some of the political ideologies and views that people have towards a change (or stagnation) in the political system. Then I will offer a critique of their platform. First, however, let’s quickly glance at the policies of our two current leading political parties. But even before that, please note that when I discuss a particular group I am not referring to everyone that holds that label, but to a majority of those who do. Finding a 1.00 correlation is difficult at best (please view your Statistics 101 textbook to review the concept of correlations).

Democrats: This is how we “say” we will restore the nation.
Democrats believe that the current debt issue is not as much about spending as it is a revenue issue. Their belief is that if government is allowed to increase taxes, especially on the rich, the US can afford to pay for our current system and even fund new government run programs. When it comes to civil liberties, they believe in laws that allow people the ability to make their own choices on issues such as who they will marry and whether they will smoke marijuana or not. As for foreign policy, Democrats believe we should maintain peace and avoid wars.

What Democrats really mean.
When it comes to wanting to raise taxes, or change current taxes to fit a progressive tax model, Democrats tell the truth. Democrats were able to push through the removal of “Don’t ask, don’t tell,” but no other major strides have been made in restoring civil liberties. Our country continues to keep large number of troops in Iraq and Afghanistan and a new unconstitutional war has been declared in Libya, thus debunking the anti-war rhetoric.

Republicans: This how we “say” we will restore the nation.
Republicans think debt problems are caused by too much spending. Cutting programs to reduce spending is their plan to solve the debt issue. They believe social issues should be dictated by the government as to keep us safe from ourselves. They also believe that the current wars the Unite States are fighting are necessary for the security of the nation.

What Republicans really mean.
Republicans speak a lot about spending cuts, but this about all we get from them: talk. The cuts are usually unspecified and include a 20 year plan before any (if any at all) progress is made towards reducing spending. In the categories of civil liberties they have been successful at continuing the War on Drugs and introducing the PATRIOT Act to protect us (I feel so much safer). And we cannot forget about those defensive wars that they launched during the past decade against two nations that threatened our existence.

For two parties that are supposed to be total opposites of one another there is not much difference between them at all. Libertarianly speaking, it seems that the only policies that get pushed through are the worst ideals of the Democrat’s and Republican’s platforms. I will further compare and contrast, if there is anything to contrast, their platforms and actions in more detail in a separate post. Until then, if you believe that big government is what we need to preserve society, then a typical Democrat or Republican is the perfect candidate for you.

If you happen to disagree with the status quo Democrats and Republicans, but see all other candidates as “unelectable,” I ask you to reconsider that thought for a moment. Below I will list some solutions to working around America’s two-party system that specific individuals or groups are advertising. I will spend little time on ideology, except where necessary, in this section and focus more on changes to the election process.

The Tea Party Approach
The Tea Party movement began in 2009 in opposition to big government, specifically in the economic sphere. The Tea Party belief is that career politicians have lost touch with the majority of Americans. These politicians should be voted out and replaced by someone who usually fits the two conditions of 1) not giving into special interest groups and 2) believing in term limits. Both conditions are thought to keep politicians more honest and loyal to their campaign promises. They do not wish to start their own political party, nor is there a single Tea Party, but many small Tea Party groups that, for the most part, share similar ideas. However, since most run as Republicans, it seems to be a way changing the Republican Party from within.

Sticking with their belief that government is too big, many, if not all, Tea Party candidates have run on the belief that taxes are too high and spending needs to be cut. My problem with the Tea Party is that many contradict their belief in small government by taking a social conservative stance. They believe that people should be free to make their own economic decisions, but government is needed to regulate people’s personal lives. Also, many are pro-war, making them the equivalent of a slightly more fiscally conservative status quo Republican.

The Gary Johnson Approach
Gary Johnson is the former two-term Republican Governor from New Mexico. He believes that the Republican Party is the only party that can restore America. His beliefs currently align more with libertarian ideology than the run of the mill Republican. However, he believes historically that Republicans have been the ones to balance the check book and wants to bring back and expand that belief. Johnson also believes that by having the Republican Party focus more on finical rather than social issues more people would be willing to vote Republican.

The Ron Paul Approach
Known as the grandfather of the Tea Party movement, 12-term Republican Texas Congressman Ron Paul has held favorable beliefs for third party candidates for many years. Why then is he running as a Republican? Paul tried running as a Libertarian back in 1988 election, but because of America’s two-party powerhouse he received little attention. He ran every election since as a Republican finding it is an easier way to obtain ballot access and receive media attention. Paul is more concerned with spreading the idea of liberty to people rather than linking it to a specific party.

Both Johnson’s and Paul’s choice to maintain Republican status could also cost them votes, however. Those that believe the Republican Party is too corrupt to be changed or to hold viable candidates would not end up voting for one of the two. The next two approaches work towards moving away from the two-party system.

The Libertarian Party (and probably other third parties) Approach
I bring up the Libertarian Party because it is the primary third party that I follow (I bet you would have never guessed that). Other third parties probably have similar beliefs. The Libertarian approach is that the two-party system is completely broken. That means there is no way of saving either of the parties through an internal fix. Third parties would need to make a name for them, thus they would run candidates that hold true to their positions. There would also be a growth in crisp platforms that break away from the traditional Democrat and Republican extremes. Libertarianly speaking, political parties would enter a free market atmosphere forcing the parties into competition to produce the candidate that most aligns with the party’s beliefs.

The Jesse Ventura Approach
Yes, that’s right. I am referring to the (former) Governor himself. Jesse Ventura served as the governor of Minnesota from 1999-2003. Initially he had strong faith in third parties. He even won his position as governor on the Reform Party ticket. More recently, however, Ventura has stated that for any third party to rise to power it must become as corrupt as the Republicans or Democrats. He now advocates the independent approach to running. His belief is that if one runs as an independent, voters will be forced to learn what the person is running for and not vote simply because the person belongs to a certain party.

As with the other approaches, both the Libertarian and Ventura approaches come with their setbacks. In practice, both approaches prove difficult to run a successful campaign. The candidates are usually given less, if any, air time to get their messages across to the public. This causes them to lose several votes that they could gain just by people knowing who they are. The best candidate to run in either situation is one that is well known, rich, or a combination of the two.

Ideally, I agree most with Ventura’s approach, which could also be known as Washington’s approach, as it is the most free market idea offered. When looking at reality, however, Paul’s approach seems the most practical. Although, I do see two conditions that could spark a revolution in favor of the rise of third parties and independents. The first is the growing mistrust in government that I mentioned at the beginning of the article. As more people become disgruntled by the two-party system, third parties and independents will become a more viable choice. The second condition is the growth of internet communication. If these non two-partiers start taking advantage of social networking sites they can communicate more directly with people and build a larger audience. If they chose to use these conditions to their advantage, independents and third parties could start building up a new base of supporters now and become a more prominent force in near future elections.