Obama’s spending cuts!
After growing criticism of his massive spending programme, Obama has instrcuted agencies to find savings – of $100 million.
The chart from Silent Running illustrates nicely how small they are.
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Tags: Barack Obama, government spending, United States
April 23rd, 2009 at 10:12 am
lol is all I have to say…
April 23rd, 2009 at 10:24 am
So far, Obama has managed to disappoint many of his supporters (so much for the much vaunted campaign slogan “for change”). The photograph of Obama shaking hands with the Venezuelan thug Hugo Chavez makes the U.S president look weak and pathetic.
He’d be a hero in the unlikely case the stimulus package works, but, as of today, he appears destined to become a one-term President, another Jimmy Carter.
April 23rd, 2009 at 10:30 am
A US commentator recently compared the size of this cut to the total budget as follows:
You report that President Obama today “challenged” his cabinet to “cut the budget by $100 million” (“Obama to Cabinet: Cut $100 Million from Budget,” April 20). What courage. A President who proclaims the importance of making “hard choices” calls upon his government to trim away a whopping one thirty-six-thousandth of its projected expenditures for the year – or, alternatively reckoned, one twelve-thousandth of its projected budget deficit.
To put this budget “cut” in perspective, suppose that the typical American family, earning $50,000 annually, plans this year to run a budget deficit proportionate to the deficit that Uncle Sam will run. Such a family would plan to spend $75,000. Now suppose that this family, seeking to signal its faux-commitment to financial prudence, promises spending cuts equal, in proportion to its budget, to the cuts announced today by Mr. Obama.
This family would declare – surely with much fanfare – that it will reduce its planned expenditures for the year by $2.08! Perhaps it might promise to survive the year with one less gallon of gasoline or with one less cup of coffee.
Who would take such a gesture to be anything other than audaciously insulting sarcasm by the chronically irresponsible?
Sincerely,
Donald J. Boudreaux
My emphasis.
April 23rd, 2009 at 10:35 am
I hope Bill English can find some decent cuts to offset NZ’s growth in government spending in recent years. Worryingly, he talks about lowering the rate of growth rather than lowering the actual level of government spending relative to the economy – which indicates a less aggressive timeframe than I’d like to see. I know that reducing government spending at a time of recession is a no-no, but its not really bad if the spending produces benefits lower than the borrowing cost + wouldn’t mind just seeing some plans for the government to get out of the way as the private sector starts to kick-in again in future.
Meanwhile, feeling the pain here in the US. CA slapped on another 1% sales tax and I’m fairly near to Obama’s target income bracket for tax hikes. Who’d thought that even the US would let its tax situation get to the point where basically half the country doesn’t pay any? Representation without taxation is the key to success in modern left-wing politics, it seems.
April 23rd, 2009 at 10:36 am
2012 election slogan for the republican party –
“It’s time for Change”
April 23rd, 2009 at 10:37 am
My goodness. We have seen more criticism of Obama from DPF in one month than we did of Bush in eight years. Remind me again who was president when the financial industry collapsed and the world economy began to melt down?
April 23rd, 2009 at 10:42 am
Hey there Camryn. You’re fairly near to the increased tax bracket are you? I think if you’re earning close to two hundred and fifty thousand US dollars a year you’ve got very little to worry about. You know that’s over $400,000 NZ right?
Or perhaps you’re telling fibs
April 23rd, 2009 at 10:44 am
I like how you suddenly became fascinated with US fiscal policy on the 20th of January. I’m not saying you never wrote a single post about the Bush Administrations various fiscal catastrophes but I certainly don’t remember one.
April 23rd, 2009 at 10:49 am
I also don’t see the trillion or so (whatever it is now) of corporate welfare, aka bank bailouts specifically shown in that diagram? If stimulus, aka money for roads, schools, healthcare is so evil then why doesn’t it show how much is being spent on bailing out corporations who cheated and profited at insane levels until they eventually failed, and got hundreds of billions from the taxpayer?
Or is redistribution of wealth only a bad thing when it’s from the rich to the poor, and not the other way round?
April 23rd, 2009 at 10:50 am
Apparently Homeland Security will save $60m over the next 10 years by co-ordinating office supply purchases.
And Piggy – $250k is NOT a big salary in the US. Hell it’s not even a big salary in New Zealand
April 23rd, 2009 at 10:57 am
Ah so that’s what he meant by “change” – this budget cut will put about 50c more change in the pocket of every US taxpayer.
April 23rd, 2009 at 11:01 am
Obama is totally out of touch with reality, the key identifier of all on the left.
April 23rd, 2009 at 11:03 am
$250k is NOT a big salary in the US. Hell it’s not even a big salary in New Zealand
Actually it’s about seven times the median salary. Less than 1% of the population earns more than $100,000.
April 23rd, 2009 at 11:11 am
Greg, mate. Could you do me a favor and look up how many people in the USA earn more than $250,000 USD? I think you’ll find it’s about 5%.
Everybody earning under $250,000 USD receives a tax cut under the Obama tax plan. That, therefore, is a tax cut for 95% of people in the country. Perhaps, in the words of Redbaiter, you could tell me how a tax cut for 95% of people is ‘totally out of touch with reality.’ Because it sounds pretty good to me.
As for New Zealand? I’m sorry, but if $400,000 a year here, even $250,000 a year if you don’t want to do the currency conversion is “NOT a big salary” – the phrase “totally out of touch with reality” comes to mind. I’m sure Redbaiter has my back on that.
April 23rd, 2009 at 11:15 am
Danyl and Piggy – you seem to think that because its RELATIVELY more than most people make that its a “big salary”.
April 23rd, 2009 at 11:19 am
U.S. Federal Individual Income Tax Rates History, 1913-2009 and the Top U.S marginal tax rate
April 23rd, 2009 at 11:25 am
you seem to think that because its RELATIVELY more than most people make that its a “big salary”.
Beautiful.
April 23rd, 2009 at 11:47 am
The chart from The Heritage Foundation illustrates nicely how small they are.
http://blog.heritage.org/2009/04/20/obamas-spending-vs-obamas-spending-cuts-in-pictures/
April 23rd, 2009 at 11:55 am
To me the US Democratic Party is a collection of parasites on the productive economy without any capacity to understand that they all depend on a healthy host. They regard the economy as a commons, and each special interest is determined to take as much as possible for as long as possible, regardless of the long term.
In this the Democrats differ from the Republicans only in that the Republicans represent different special interests, just as parasitic; a Democrat will seek to save the Polar bear and a Republican will regulate access to birth control…
Bush Obama; the budget blow-out ight be different in size, but it is just as stupid.
April 23rd, 2009 at 11:56 am
Piggy said:
“….Everybody earning under $250,000 USD receives a tax cut under the Obama tax plan. That, therefore, is a tax cut for 95% of people in the country…..”
Get sucked in by the spin, then.
47% of Americans ALREADY paid no net federal income tax, so how can you give tax cuts to 95%?
Simple; use the tax department to dispense welfare, as in NZ’s “Working For Families”, and call it “tax cuts”; this in spite of the fact that a sizable proportion of people receiving the “tax cut” welfare, get MORE back than they paid in taxes.
April 23rd, 2009 at 12:20 pm
But I agree with you, Piggy, on bank bailouts, but possibly for different reasons.
I think that the main problem in the USA is now the RESULT of all the government money being splashed around. This has resulted in paralyzing the whole economy with everyone waiting for their money from the government in preference to responsibly working their way through the problems. Thomas Sowell recently commented that stimulus packages have turned out to be sedative packages, and he is right. Even responsible operators, down to individual mortgage holders, have been incentivised to cease acting responsibly as they will only be penalised in having money transferred from them to the irresponsible operators.
Can anyone tell me why the US government simply did not do the following?
Instead of bailing out banks, they could have just made a proportion of mortgage interest principal repayment ON EXISTING MORTGAGES, tax deductible, for a limited number of years.
Results: people maximise their reported income so as to be able to claim the biggest possible rebate against the biggest possible repayments. Banks get injection of capital in the form of repayment of mortgages; honest, earned, “real” money. People less inclined to walk away from their houses and underwater mortgages. House values still allowed to drop without the owners left out of pocket for the rest of their lives.
Next time one of you important guys who follow this blog is talking to President Obama, please suggest this to him.
April 23rd, 2009 at 12:25 pm
Danyl
It was a higher percentage before the policies of envy drove them all off to Aussie and started a domestic recession. Thanks Labour.
April 23rd, 2009 at 12:26 pm
Grant Michael McKenna (523) 3 0 Says:
April 23rd, 2009 at 11:55 am
“To me the US Democratic Party is a collection of parasites on the productive economy without any capacity to understand that they all depend on a healthy host……”
Hey, Grant, you beat me to it, I wanted to use that great sentence. I applies to a certain collection of politicians in NZ too…..
From James V. DeLong
“The Coming of the Fourth American Republic”
“…….I see the Democrat Party as consisting of a collection of parasites on the productive economy that has lost any capacity to understand that they all depend on a healthy host. The groups regard the economy as a commons, and each is determined to loot as much as possible for as long as possible, regardless of the long term. Democrats make corresponding claims about the Republicans, of course……”
The whole essay is a goodie:
http://american.com/archive/2009/april-2009/the-coming-of-the-fourth-american-republic
April 23rd, 2009 at 12:30 pm
PhilBest
NZ shows that although this may win one or two elections it is not sustainable long term. It’s part of the reason we (NZ) beat the rest of the world into recession. You simply can’t sustain a long term situation where you pay people more benefits than they pay tax simply to retain their vote.
April 23rd, 2009 at 12:32 pm
More from the same essay:
“…..it is not unusual for decadent political arrangements to blaze brightly before their end. Indeed, the total victory of the old arrangements may be crucial to bringing into being the forces that will overthrow it…..
“……A catalogue of its insoluble problems includes:
Sheer size. The usual numbers concerning the size of government in the United States are that the Feds spend about 20 percent of GNP and other levels of government at least another 16 percent. These do not reflect the impact of tax provisions, regulations, or laws, however, so an accurate estimate of how much of the national economy is actually disposed of by the government is impossible. Whatever it is, it is growing apace, and the current administration is determined to increase it considerably.
Responsibility. As the government has grown in size and reach, it has justified its claims to power by accepting ever more responsibility for the economy and society. Failure will result in rapid loss of legitimacy and great anger. It is amusing to read pundits’ pronouncements that the Chinese government must deliver economic stability and growth or suffer social unrest; what do these pundits think will be the fate of an American government that fails in these tasks? And as the government’s reach extends, any chance that it will meet its self-proclaimed responsibilities declines.
Lack of any limiting principles. There is no limit on the areas in which special interests will now press for action, nothing that is regarded as beyond the scope of governmental responsibility and power. Furthermore, special interests are not limited, cynically trying to get an undeserved economic edge or subsidy. Would that they were! Inevitably, special interests try to convert themselves into moral entitlements to convince others to agree to their claims. The problem is that many have convinced themselves, which means that no half loaf satisfies. The grievance remains sharp, and compromise immoral.
Thus environmentalists claim not just a few million dollars for endangered species protection, but total control over all land use, and, most recently, over the entire economy in the interests of protecting the polar bear……
“……..Conflicts. The Special Interest State could get along quite well when it simply nibbled at the edges of the society and economy, snipping off a benefit here and there, and when the number of victorious interests was limited. But the combination of moral entitlement, multiplication of claimants, and lack of limits on each and every claim is throwing them into conflict, and rendering unsustainable the ethic of the logrolling alliances that control it.
The guiding principle is that no member of the alliance will challenge the claims of any fellow member. But this principle has a limit, in that unlimited claims cannot help but impinge eventually on each other.
To pick on the Democrats: basically sensible financial operators will not challenge the climate changers. Now, the climate changers are asserting a power and a duty to control (i.e., shut down) the economy. At the moment, the financiers simply trust that their own inside-government people will somehow manage to control the situation, even if they get no public support from the other elements of the Democrat coalition. This is unlikely, so either the financial operators will wind up losing big or they will have to confront the issue directly. (Of course, many of them have joined the climate changers, and hope to profit from the issue, but this is not an infinitely large bandwagon.)……
“……..U.S. leaders do not grasp the situation. None of the leaders of any branch are demonstrating an appreciation of the problems and limits of the Special Interest State.
Past presidents have understood the importance of keeping special interests out of the White House. They may have given up the agencies, but most ensured that the White House staff worked for the president, not for his constituencies. President Obama has no grasp of this. To stick with the climate change issue, to choose global warming fundamentalists as personal advisers on this issue is absurd; there is no chance that the skeptics’ case will receive representation.
At the Supreme Court, “liberals” and “conservatives” each dwell in a world of “originalism,” “federalism,” “Chevron deference,” and other abstractions that do not reflect the realities of the Special Interest State. Missing is any recognition of the real point of much constitutional litigation: a Constitution is a mechanism by which polities solve prisoners’ dilemma problems, allowing cooperation over geographic and temporal distance and, in a democracy, protecting against the tyranny of the majority. Yet the term “prisoners’ dilemma” appears nowhere in Supreme Court jurisprudence, and the alternative formulation of “Constitutional Interest vs. Particular Interest” is almost as rare…….
“………We are in a crisis of legitimacy. The concept of legitimacy, the right to rule, is the single most important factor in political life. The particulars of how it is gained and lost are infinitely varied, according to the culture and history of the polity….
“…….In the United States, legitimacy is conferred by elections, but it is not total. Through the ages, the basic question mark about democracy as a form of government has been that 51 percent of the electorate can band together to oppress the minority—“the tyranny of the majority” is a valid concern. To address it, the United States has a formal written Constitution to guarantee basic rights, but it also has an unwritten constitution that sets limits on how far the winners can push their victories. Exceed the amorphous bounds, and not only does the minority no longer accept the legitimacy of the government, many members of the majority coalition will have a guilty conscience as well, knowing that their acquiescence to the demands of one of their allies was a bad deed. As Thomas Jefferson said, “Great innovations should not be forced on slender majorities.”
Over the past few years, political winners have become increasingly aggressive, culminating in President Obama’s recent “We won” as an assertion of an unlimited mandate. Losers have become increasingly restive, ready to attack the legitimacy of the winners’ victory. Bush, in particular, was the target of an amazing and consistent campaign of de-legitimizing, and the opposition to Obama is on a hair trigger.
The merits of the case in each instance is a topic for another day, but the problem is a fact, and an important one. In particular, if each party is regarded by the other as a principle-free alliance of special interests, eager to claim the government so as to loot the other side, then a large chunk of legitimacy is lost…….”
April 23rd, 2009 at 12:36 pm
Sorry for such a lengthy one, but that is one important essay. Lots of points applicable to the legitimacy of government elsewhere than in the USA too.
I have been saying something like this for a while:
“…..it is not unusual for decadent political arrangements to blaze brightly before their end. Indeed, the total victory of the old arrangements may be crucial to bringing into being the forces that will overthrow it…..”
Only I say that the possible alternative is to sink into an abyss of totalitarian hell on earth akin to North Korea.
April 23rd, 2009 at 12:40 pm
More from the same author, well worth reading:
“Preparing the Obituary”
http://american.com/archive/2009/february-2009/preparing-the-obituary/article_print
(On the media and the likelihood of government takeover of the collapsing MSM)
“Avoiding a Tech Train Wreck”
http://american.com/archive/2008/may-june-magazine-contents/avoiding-a-tech-train-wreck/article_print
(On government interference in new technology)
April 23rd, 2009 at 12:52 pm
Burt, I agree with you 100%.
The whole reason that the USA even pre Obama, could pretty much let nearly half their population off paying any federal income tax at all, is simply because the top 1% paid 35% of it; and the top 5% paid 65% of it, and the top 20% paid 85% of it; and so on.
NZ, and other countries who put obstacles in the way of people becoming extremely wealthy, on the other hand, rapidly find themselves obliged to have a “broad tax base”; i.e. poorer people end up paying quite a lot of tax.
It is actually low income earners who have the most to gain by leaving NZ; if they go to Aussie or the USA, not only are low paying jobs paying higher over there, but these people end up paying no tax or only a fraction of what they paid in NZ; the effect is many thousands of dollars per year.
If they pick their destination in the USA, they will also be able to buy houses at a fraction of the price necessary to be paid in NZ. (Especially in the Southern States – and those states also happen to be the MOST economically prosperous, not the least – it is all to do with attitudes to development and land use).
Obama actually was asked specifically about the fact that lower tax rates on higher income earners leads to higher govt revenue, not less; his reply was that he did not care about this; it was a matter of “making the rich pay their fair share”. And people criticised me all last year for saying that Obama was a dangerous marxist somewhere out to the left of Keith Locke……..Thomas Sowell aptly put it that “spreading the wealth around” always only ever ends up “spreading the poverty around” instead.
April 23rd, 2009 at 12:55 pm
One of the most depressing things I saw recently was in that “backbenchers” debate recently that had Roger Douglas and Michael Cullen and Stephen Franks in it. Stephen Franks commented that being out of politics involved earning some real money again; and the mainly young audience went nuts shouting him down………the sight was sickening, here was a crowd of uni students representing NZ’s future, and they obviously all expect to be poor and regard it as virtuous to think that way……?
April 23rd, 2009 at 1:02 pm
Another way to look at that is to see that, even with progressive taxation, the top 1% enjoy control of 40% of the financial wealth of the country, the top 5% enjoy control of 68% of the financial wealth of the country, the top 10% enjoy control of 80% of the financial wealth of the country.
80% of the country’s population enjoys control of 9% of its financial wealth.
If you don’t see work as what justifies wealth, then there’s no problem with that. But if you do see work as what justifies wealth, and proportionally, the question arises: are the top 1% really doing 40% of the work?
Another question is, do you really see this changing under Obama?
April 23rd, 2009 at 1:04 pm
I’m sure Obama and to a certain extent that idiot Locke realise what you are saying Philbest is indeed true. But they are socialist come commies and real personal wealth is a threat to big government and ultimately total control, for that is what these people seek. Taxation is but a means to an end.
April 23rd, 2009 at 1:09 pm
PhilBest (4925) Vote: 0 0 Says:
April 23rd, 2009 at 12:20 pm
What an excellent idea, something Bill English should be looking seriously at.
April 23rd, 2009 at 1:10 pm
Not the whole reason, they have “supplemented” their tax take by borrowing to finance the deficits they have run for the last 40 or so years. Their government debt is at 85% of GDP and ours is at 25%. They can afford to do this because they are a superpower and providers of the worlds reserve currency. We can’t because we have no army and an economy based on cows.
April 23rd, 2009 at 1:32 pm
radar
Remind me again which President signed into law the low income housing legislation that forced banks to lend to people who couldn’t afford to repay them and then which President then allowed FANNIE MAE and FREDDIE MAC to dramatically extend that programme to the such an extent that the mountain of sub prime debt (that was not going to be repaid) collapsed thus provoking this crisis. Oh and remind us which Administration tried to rein in Fannie and Freddie and which party in Congress refused to pass the legislation that would’ve placed checks on these agencies’ expansionist policies.
Hint – Carter, Clinton, the Bush Administration and the 2006 Congress controlled by – yes you guessed it – the Democrats!
Danyl
I note you fail to report on the many left wing commentators (including on this blog) who excoriated Bush for his deficits but who are now like chirping crickets over Obama essentially quadrupling the worst year of the Bush Administration’s deficits.
April 23rd, 2009 at 1:39 pm
“the sight was sickening, here was a crowd of uni students representing NZ’s future, and they obviously all expect to be poor and regard it as virtuous to think that way……?”
Have you seen Evan Maloney’s film “Indoctrinate You” ??
Should be mandatory viewing for every NZ school child prior to attending University so that they can be made aware of what deceit they are in for.
What though are they watching?
Al Gore’s fucken lies.
No wonder the NZ education ship is wrecked on the rocks of socialism.
April 23rd, 2009 at 2:56 pm
On a related note, the new annual tax revenue (starting next year) from Cap + Trade USA has been calculated at US$366billion.
April 23rd, 2009 at 3:57 pm
“radar
Remind me again which President signed into law the low income housing legislation that forced banks to lend to people who couldn’t afford to repay them…”
That would be the Clinton administation. Are you suggesting that the Bush administration was so powerless and weak that they couldn’t overturn this law, despite having the Republicans control congress also for six of the eight years Bush was in power? Startling!
“Have you seen Evan Maloney’s film “Indoctrinate You” ??
Yes. Just finished watching it on google video. It was great.
“Should be mandatory viewing for every NZ school child prior to attending University so that they can be made aware of what deceit they are in for.”
I agree.
April 23rd, 2009 at 4:02 pm
unaha-closp do you think the yanks will slip us 250 mill for our carbon credits now that we are in surplus, no I don’t think so either. I think the Dear Mr Obama is going to have a huge fight on his hands, we live in interesting times.
April 23rd, 2009 at 5:34 pm
Ryan Sproull:
“……Another way to look at that is to see that, even with progressive taxation, the top 1% enjoy control of 40% of the financial wealth of the country, the top 5% enjoy control of 68% of the financial wealth of the country, the top 10% enjoy control of 80% of the financial wealth of the country.
80% of the country’s population enjoys control of 9% of its financial wealth.
If you don’t see work as what justifies wealth, then there’s no problem with that. But if you do see work as what justifies wealth, and proportionally, the question arises: are the top 1% really doing 40% of the work?…..”
One thing that needs to be admitted under that analysis, Ryan, is that someone who is part of the 80% of the population with 9% of the financial wealth, in the USA, still has much more wealth than ANYONE in any “egalitarian” country.
I simply do not believe there is any way around this; the conditions for increases in wealth require inequality to be possible. No inequality, no increase in wealth.
Having said that, I very much agree with shifting the taxation burden off working wages and industry and onto “rentier” income and consumption and land. I remain suspiscious of any political movement that wants new taxes without scaling back old ones proportionally, though.
April 23rd, 2009 at 5:41 pm
Evan Maloney has done a great job with that documentary. This is going mainstream at last. David Horowitz has been on about this for years. He has written a book called “IndoctrinationU” and one called “One Party Classroom”; also started a “Free Speech On Campus” movement.
Take a look at the “Students For Academic Freedom” website; it is an eye opener.
http://www.studentsforacademicfreedom.org/
I do actually wonder whether Unis are as bad in NZ……..
April 23rd, 2009 at 5:43 pm
radar
“Are you suggesting that the Bush administration was so powerless and weak that they couldn’t overturn this law” The abuses escalated over time and became more apparent as the market got red hot into 2006. The Bush Administration supported an amendment but could not get any Democrat support in the Senate and the GOP had a slender majority that was threatened by middle of the road GOP defections. Sen McCain attempted a fresh law change in 2007 when things were looking even dicier and by then the Democrats had control of the House and Senate and Senate Banking Committee Chairman Chris Dodds killed the amendment and wouldn’t even allow it to come to the Senate floor for a vote – not unexpected given that he was the largest receipient of campaign donations from …..Fannie Mae and Freddie Mac (the 2nd largest receipient being none other than then Sen Barak Obama). The same Democrat block was done by the House Banking Chair Barnie Frank when House GOP members attempted another legislative reigning in of these agencies.
April 23rd, 2009 at 5:43 pm
If you enjoyed Evan Maloney’s documentary, take a trawl through “David Horowitz” search results on Youtube:
http://www.youtube.com/results?search_type=&search_query=david+horowitz&aq=f
There are several confrontations on campuses in there that make you sick to watch.
He gets a sympathetic interview from Glenn Beck, of course.
April 23rd, 2009 at 5:44 pm
Redbaiter,
Yes, that’s the Difference Principle justification of the thing – that people at the bottom would be worse off under equality than they are under the inequality, therefore it is justified. This assumes that no other system that produced such inequality could provide better conditions for the worst off than this one – debatable, in my opinion.
But yes, that is a rational justification for capitalism. More sensible to me than appeals to some kind of near-divine right to property and what it entails under capitalism.
Yeah, taxing only capital income and removing all income tax would probably be fairer, by my standards. Though I object to tax as much as I object to capitalism. What do you think of Henry George?
April 23rd, 2009 at 5:48 pm
Sorry, PhilBest. Got mixed up and addressed previous post to Redbaiter when it was meant for you.
Also debatable is talking about the American economy as if it is a closed system. It could be argued that those worst off participating in the US economy are people outside of America, working for American companies and as poor in comparison to the poorest American as the poorest American is in comparison to the richest 5%.
April 23rd, 2009 at 6:03 pm
I thought that “egalatarianism” was supposed to be a society that provides its citizens with equal opportunity to succeed with no pre-existing class or caste system, where people are taken on their merits (think early New Zealand or Australia?) rather than an equal outcome. The equal outcome one is called socialism and has been proved time and again not to work.
April 23rd, 2009 at 6:22 pm
Ryan, this discussion is getting interesting.
“…..debatable, in my opinion.
But yes, that is a rational justification for capitalism. More sensible to me than appeals to some kind of near-divine right to property and what it entails under capitalism……”
While I do not agree with nasty objectivist philosophy, I do very much agree with Gary North, that property rights are “divinely appointed”. His multi-volume economic commentaries on the bible are an unfortunately little-recognised tour de force. However, I still agree that taxes on property will result in more and fairer wealth creation than taxation on wage income and profits earned by productive activity.
Regarding Henry George, I think he has a point. I do think that taxes on property would need to be kept low to avoid negative consequences for efficient uses of land if too much in the way of property value appreciation is confiscated. If you are interested in this sort of thing, I really recommend a study by World Bank economist Alain Bertaud called “Cities Without Land Markets”. What we are getting into here is some lesser known stuff that I am deeply into. Alain Bertaud’s studies on urban economics contain some of the most desperately needed knowledge for our highly politicised and seriously mistaken direction in this area today. I would really like to get a guy of your capacity interested in them.
In another study, Bertaud comments that capital gains taxes on land are a valid source of revenue, but that it is a mistake to use them to attempt to keep property values low – he says that when the other conditions for forcing property values up are extant, capital gains taxes merely get costed in and passed on by property buyers and sellers. There are other factors that allow property price bubbles to get going, with obscene profits resulting for some for a time, but the consequences for the economy are dire, as we have now well and truly experienced.
If you are into economics, I can point you to some quite intense postings on this subject that I have made elsewhere.
But I really think that desiring a system free of both taxes and “capitalism”, we are talking about religion rather than economics. As Winston Churchill said, the only places where communism will work is in heaven, where it will not be needed, and in hell, where they already have it………
April 23rd, 2009 at 6:31 pm
Good point, Gazzaman, I should not have used the term “egalitarian” there, although some people do use it (particularly on the Left) to mean outcome rather than opportunity.
Actually, even equality of opportunity is unrealistic and requires all sorts of contrary interventions by the State. I mean, there are advantages and disadvantages of birth. The best you can do is give everyone equal freedom. If you insist on “equal opportunity” for people of less ability to become accountants, for example, we all end up suffering from a drop in the standard of accountants, from wastage of resources teaching people who aren’t up to the desired result; we also suffer from some intelligent people being hindered from fulfilling their potential, and some less intelligent people who would have contributed better to society as, say, a good tradesman rather than as an incompetent accountant.
Charles Murray and Theodore Dalrymple have written some really good stuff on this. Economist George Reisman has written a book from the cold hard objectivist point of view called “Freedom of Opportunity, not Equality of Opportunity”.
April 23rd, 2009 at 6:49 pm
More wealth creation, possibly, but by what standard do you call it “fairer”, if not falling back on some Gary North-style “the Bible says it’s mine” position for the just-plain-is-ness of capitalist property rights?
I should probably finish giving Henry George the reading he deserves before moving on to later developments in the thought. Personally, I think that if we got rid of rent entirely and made property dependent on use rather than more abstract capitalist notions of ownership, property-value appreciation would not be a problem, because it would be almost entirely a reflection of the use made of it by the owner. But that’s obviously moving sideways from the question of taxation of capitalist rental to something not capitalist at all.
But thanks, I’ll check out Bertaud when I have a chance. Where are you based, by the way? I’m about to do a mission down State Highway 1 – to Wellington next weekend and to Christchurch the following weekend. If you’re in one of those places and keen for a drink, let me know.
I’d believe that, though I’m interested on whether “valid” is secretly a value judgement of some sort.
Yes, he did, though pithy quotations do not make something so. If it’s to be called religion, though, I’m not concerned – plenty of great things have been inspired by religion.
April 23rd, 2009 at 6:55 pm
“Sorry, PhilBest. Got mixed up and addressed previous post to Redbaiter when it was meant for you.”
Thank God for that.
April 23rd, 2009 at 7:21 pm
Oh, Red. I made a bunch of posts without question marks just for you, and it turned out it wasn’t for you.
And are YOU keen for a drink with me, if you live in Wellington or Christchurch?
My shout.
April 23rd, 2009 at 8:19 pm
Thanks for the kind offer Ryan, but I’m not near either of those places right now. If ever I am, I’ll let you know.
April 23rd, 2009 at 9:06 pm
Danyl Mclauchlan says on April 23rd, 2009 at 11:25 am:
The word you’re actually looking for is “ENVY.
April 23rd, 2009 at 10:11 pm
I’m sure Bill English will do better. Not.
April 24th, 2009 at 8:55 am
Sweet as. I’m generally based in Auckland. If you’re ever up this way, let me know and we’ll grab a beer at Galbraith’s.