Thursday, October 4, 2012

Sesame Street socialism

One of the most cited exchanges from last night's presidential debate was this one:
MR. ROMNEY: Well, good. I’m glad you raised that. And it’s a -- it’s a critical issue. I think it’s not just an economic issue. I think it’s a moral issue. I think it’s, frankly, not moral for my generation to keep spending massively more than we take in, knowing those burdens are going to be passed on to the next generation. And they’re going to be paying the interest and the principle all their lives. And the amount of debt we’re adding, at a trillion a year, is simply not moral.
So how do we deal with it? Well, mathematically there are -- there are three ways that you can cut a deficit. One, of course, is to raise taxes. Number two is to cut spending. And number three is to grow the economy because if more people work in a growing economy they’re paying taxes and you can get the job done that way.
The presidents would -- president would prefer raising taxes. I understand. The problem with raising taxes is that it slows down the rate of growth and you could never quite get the job done. I want to lower spending and encourage economic growth at the same time.
What things would I cut from spending? Well, first of all, I will eliminate all programs by this test -- if they don’t pass it: Is the program so critical it’s worth borrowing money from China to pay for it? And if not, I’ll get rid of it. “Obamacare” is on my list. I apologize, Mr. President. I use that term with all respect.
MR. ROMNEY: Good. OK, good. (Laughter.) So I’ll get rid of that. I’m sorry, Jim. I’m going to stop the subsidy to PBS. I’m going to stop other things. I like PBS. I love Big Bird. I actually like you too. But I’m not going to -- I’m not going to keep on spending money on things to borrow money from China to pay for it. That’s number one. [...]
Now, we can talk about whether or not raising taxes is a good idea (and if so, on whom they should be raised and why), and we can talk about the rhetoric of debates and how little the promises made in debates compare to the reality of how a president may govern in office, etc.  But what I want to talk about here is what I perceive as a fundamental difference in philosophy not just between Republicans and Democrats, but between people who are generally conservative and those who are generally liberal, and that is this: just because a program is a good idea, something needed or appreciated by many, important in its own right, and so forth does not mean that the federal government should provide or subsidize it: in fact, it may be highly irresponsible and obnoxious to our founding principles of liberty for the federal government to make any such attempt.

The federal funding of PBS is a case in point.  True, from what I've been able to gather online (and someone can correct me if there's better info out there) PBS only gets about 15 to 17% of its annual budget from federal funds.  Cutting federal funding of PBS would not mean the end of PBS; I have a feeling that some of the celebrities who have appeared on Sesame Street alone over the years could be persuaded to make up that amount from their private fortunes (and get a tax break in the process: a win-win!).  Cutting federal funding of PBS would also not do very much to lower our national debt, but that's where I think this debate can get a little odd: is it not worth doing anything unless that thing in itself will have a huge solo impact on debt reduction?

The larger question is this one: why, in the Internet age, are American taxpayers still footing even a tiny bit of the bill for a public broadcasting service which still includes radio and television as two of its primary broadcasting media?  Do we--that is, does the federal government through confiscatory taxation--really have an important public purpose in doing so?

I haven't studied the Catholic political idea of subsidiarity as much as I'd like, but I do know that a central notion of it is the idea that things should be taken care of as much as possible on the smallest level of government, not the largest one.  It would be inefficient and possibly even unjust to expect small towns or rural areas to plan and pay for the sections of the nearest interstate highway, but isn't it also inefficient and possibly unjust to expect Americans to pay more in federal taxes for various types of projects and services that could be better handled by the local community, by the town or city, or by the state instead of the whole country?

If there's no real, compelling reason for the federal government to raise taxes to support Big Bird, then let the federal government end its relationship with PBS and let either other levels of government or private charities take over the fiscal responsibility.  The impact of doing that not for one tiny bit of federal funding, but anywhere the federal government is paying for what ought to be paid for by states, local governments, individuals, charitable institutions, etc. would be to create a thousand points of flight from the creeping socialism that starts out as a well-intentioned program, and ends up just one more burden on the backs of American taxpayers.

(Again, apologies for the weird paragraph spacing.  In the template the paragraphs look single-spaced, but when I publish they come out double-spaced.  If I try to fix it all the paragraphs get squished together into one long paragraph.)


Rebecca in ID said...

One reason subsidiarity makes more sense is that the federal govt tends to be inefficient in the way it spends money. I think everyone knows this. When this person or that person, this organization, this town, has funded something, they are more likely to keep an eye on how that money is being used. When it's just "government money" it becomes impersonal, not so important to be very careful with each dollar. That is why it is so well-known that organizations which receive yearly grants based on amounts "needed", gauged by spending in previous years, will desperately do whatever they can do to spend the last dollar, in order to ensure next year's grant. This kind of thing just isn't as likely to happen to such a great degree when things are funded privately or on a more local government level.

It also seems to me that those who are for federal funding of everything have a deep fear that unless the federal govt takes charge, people won't be nice enough to fund important things. In a way I see their point--if we are used to the govt taking care of everything, we are less likely to be on the lookout for taking care of things ourselves. I find that I tend to have this attitude; I tend to assume that the poor must have food stamps etc., so I don't keep an active lookout for things I might do personally to help. That's pretty rotten and not an excuse; I need to change my attitude regardless of our economic system, but I see that creeping in, and I doubt I'm the only one who is affected in this way by the nanny state. Since we have gotten used to being so babysat, and we are not leaders but sheep, there will probably be a time of shifting, changing from dependence to positive action, and that may be a rough period. Assuming that we ever get a chance to de-centralize.

Red Cardigan said...

Rebecca, just to add to your comment, I think that the other problem is that when incomes are down but taxes are up our ability to keep up with charitable donations falls correspondingly. So however much we might want to help with charitable organizations in our local community, the nanny-state often takes away our ability to help effectively.

John Henry said...

I could argue about the value of federal funding for things like research (and PBS) - things that could be funded on a lower level in theory, but in practice would not be.

But my biggest beef with Romney's point is that there are other ways to fight a deficit too that neither Democrats nor Republicans are willing to mention. I can think of two off the top of my head:

1. Tariffs: Why focus on taxing the incomes.of hard-working Americans when we can tax the profits of companies that export our jobs overseas and make a killing selling goods produced with cheap Chinese sweatshop labor at American prices?

2. Nationalize the Fed: Why do we allow privately held banks to print money from thin air and then loan it to the public at interest? Not only could this considerable source of income be helpful in driving down the deficit, *coining and regulating money is specifically stated to be a Congressional responsibility in Article 1, Section 8 of the Constitution.*

There is a heck of a lot of waste and inefficiency in the federal government, and I'm all for trimming it. But neither party is ever honest in the way they talk about these things.

For some reason we, as a nation, have forgotten about Afghanistan and the insurance/bank bailout, and are arguing over PBS and income tax brackets. We're being distracted with pageantry and nonsense, which is all these "debates" are really about. The current political, social, and economic situation will not change appreciably by replacing one elitist tool with another.

vera said...

I am with Henry. No real issues will be mentioned by these sock puppets.

Turmarion said...

A few thoughts:

1. With subsidiarity, you have to be careful. There are libertarian-leaning types who want to used the concept in an illegitimate manner to argue that not only shouldn't government do things inappropriate to its scale, but shouldn't do anything at all. I.e., they want to go down the Grover Norquist route of making government small enough to "drown it in the bathtub". That's not subsidiarity, but some try to argue that.

2. You say, my emphasis, "Do we--that is, does the federal government through confiscatory taxation--really have an important public purpose in doing so?" First, if you look in Merriam-Webster, the primary definition of "confiscate" is "appropriate by the government". By definition, taxation--even if you were only taxed ten cents--is confiscatory. I assume, though, that what you mean is "excessive or inappropriate" taxation. But you can't assume that beforehand. If you think we're taxed too much, make that argument. Moreover, that's still a separate argument from the argument as to what the government uses taxes for.

3. You, my empahsis: "[I]sn't it also inefficient and possibly unjust to expect Americans to pay more in federal taxes for various types of projects and services that could be better handled by the local community, by the town or city, or by the state instead of the whole country?" In principle, I agree; but I've lived most of my life in small towns and rural areas, and I've got to tell you that local newspapers, radio stations, television stations, etc. are folding right and left, or being bought out and homogenized by media giants like Clear Channel. Ditto for small businesses--the family-owned drugstore we've gone to for the last decade was bought out last year; one of the two locally-owned hardware stores is going out of business, partly because of a big Ace Hardware that opened up across the street from it; and bad as I hate to do so, I find that I have to shop at Wal-Mart a lot for lack of choice of other places to shop. It seems to me that changes in government policies to discourage such conglomeration--such as good old Teddy Roosevelt trust-busting--might help; but that'd be government intervention, wouldn't it?

4. You're using "socialist" as a dirty word, rather than as a descriptor of an economic system. Dorothy Day, currently in the process towards canonization, was an anarchist socialist all her life. Socialism, so long as it meets the criteria of Catholic Social Teaching for a just society, is not incompatible with Catholicism or Christianity more generally, just as capitalism as such is not incompatible. It's the kind of socialism (or capitalism). One can be a Christian and legitimately favor socialism--or capitalism. The preference for one or the other is not directly a matter of faith. There have been--and are--fine, upstanding Christians socialists, as well as capitalists. If you think capitalism is preferable (as I think the opposite), that's fine; but make the case, don't just use "socialism" as a slur (the way some use "capitalist" inappropriately to mean "heartless moneybags Scrooge"), and keep in mind that those Christians on the other side are not any less Christian. Frankly, I'm inclined to think it's more a matter of the issues of industrial economies of scale, which neither capitalism nor socialism have yet figured out a way to solve; but still.

Red Cardigan said...

Well, Turmarion, I tend to use confiscatory taxation as shorthand to mean taxes taken directly from individual Americans, as opposed to tariffs (John Henry's suggestion). When I've read the history of the income tax I've been pretty amazed to see that it was originally used as a short term tax to cover war expenses (after the Civil War), was allowed to expire, and was then pushed again--at which point many ordinary people thought it would never affect mere salaries or farm profits, but only the kind of income earned by the barons of great capital. I can only imagine what the workers of the past would think of today's payroll taxes, which are often the biggest tax bite in a worker's budget.

I'm not using socialism as a dirty word; I'm not that huge a fan of unbridled capitalism, either. But the history of the past hundred years or so have shown us that socialism is just as, if not more, susceptible to abuses of power that ultimately impinge on the true liberty of those living under those systems.

Turmarion said...

Well, the U.S. is the only industrial democracy that lacks a VAT (value-added tax, roughly a sort of "national sales tax"), and most economists across the spectrum think that we ought to have one, too. That's go some way towards reducing payroll taxes. I don't necessarily have a problem with tariffs, either--it can be argued that tariffs could also put into place a moderate protectionism that might be helpful for American industry.

It's just that lots of people, especially libertarians, toss around terms like "confiscatory taxes" and such and what they really mean is "I don't want the government to have any of my money for anything, and if anyone doesn't like it, that's too bad!" I'm old enough to remember Howard Jarvis and his agitation for Proposition 13 in California. A lot of the ills in that state ultimately stem from that--the tax revenues have dropped steadily since, there is no revenue to replace it, and services suffer.

Anyway, I'm glad to find that you're not a Grover Norquist type. Whether income taxes can be abolished altogether (I'm inclined to think they can't, but I could be wrong) or significantly reduced without crippling legitimate government by means of tariffs, VAT's, and such (I think that probably is possible) is a legitimate discussion.

I don't know--when you said, "creeping socialism" it sounded negative. One could say we've been living through "creeping laissez-faire crony capitalism" for the last forty-odd years. In any case, I'm thinking more of Scandinavian-type social democratic models when I say "socialism" more than Communist or Marxist flavors. Distributuism, of which you may be aware and which Chesterton and Belloc favored, would be quasi-capitalist in that it would emphasize private enterprise, but quasi-socialist in that it would limit the size of corporations, conglomerates, and such--something that would have to be enforced by government power.

My personal opinion is that socialism and capitalism both suffer from the fatal flaw of assuming infinite economic growth and having the attitude of "better living through technology". They disagree on who will oversee the economy and how goods will be allocated, but as oil becomes more and more expensive and we reach the limits of growth, neither is yet willing or able to give up its presuppositions of a sort of cornucopia view of the world.

Red Cardigan said...

I honestly think we agree more than we disagree, Turmarion! As for income tax, what about a proposal that eliminates all income tax on the first $50,000 for individuals or $100,000 for families, combined with a committment to lower payroll taxes across the board? Recall that in 1913, incomes for married people below $4000 a year weren't taxed at all (since they could exempt the first $4000 of income from the income tax)--and $4000 a year in 1913 is equivalent to about $88,000 in today's money, give or take. (In fact, according to one website I consulted, the 1% in 1913 included anybody who made about $11,000 and up!)

A VAT could help offset such a huge exemption, but would be inherently more fair as it would be consumption, not income, that would be taxed. To keep a VAT from hurting the poor certain items like food and medicine and perhaps targeted children's items (diapers, maybe?) would be exempt (just as such items are exempt from sales tax in some states now), and it would be absolutely required that no VAT could *ever* be charged on resold merchandise (e.g., we don't penalize thrift stores or yard sales). In addition to encouraging responsible consumption, the exemption on resale merchandise would foster a more recycle-minded consumption than what we have now (where it's all too easy to throw away perfectly good stuff because you want the latest iteration of that thing).

Where I really get worried is when we are talking about Social Security entitlements. I'm certain the system will be bankrupted by the Boomer generation, but we can't even start having conversations about how to improve things without someone framing the debate as "throwing Grandma off a cliff." Well, what if "Grandma" leaves her pricy house and drives up in her brand-new car to a medical clinic to demand her "free" Hoveround (tm)? At what point does that sort of thing start being unjust?

vera said...

What you tax, you get less of. Taxing labor/income is stupid, and resented as "confiscation". Tax bads, like pollution, and using up of virgin resources. Another source of revenues can be fees on land (similar to Georgist land value tax). Lots of good ideas out there...

But those in power do not wish to implement them.