Archive for the 'Economics' Category

This past Wednesday was Tax Day and to celebrate, many people organized protests, called “Tea Parties,” to register their displeasure regarding the currentl levels of taxation in this country. In response to these gatherings, President Obama took the opportunity to plug his own tax cuts. He said, in part:

Make no mistake: this tax cut will reach 120 million families and put $120 billion directly into their pockets, and it includes the most American workers ever to get a tax cut.

This is an interesting statement, insofar as it characterizes a tax cut as putting money “directly into [the] pockets” of taxpayers. I’m having some trouble with this characterization. Suppose you are walking down the street when you are pulled into a dark alley by a common thug. He throws you to the ground, grabs your wallet, and opens it up. He takes out the $200 in cash it contains and runs off with it, all but a $20 bill, which he leaves behind. Has that thief just put $20 directly into your pocket? Should you be moved by his generosity? Should the fact that the theif left your $20 blunt your protest that he took the other $180?

The answer to these questions depends on your presuppositions regarding ownership of property and wealth. If you assume that the thief has a superior right to your money, then the answers to the above questions are all “yes.” If the thief has a right to your money, then anything he leaves you is a gift. But if your right to your money is superior to the rights of the thief, then you own him nothing.

Shifting back to the direct context of taxation, for President Obama’s statement to be true, that his tax cuts are putting money “directly” int your pockets, it would have to be true that the Government has a superior right to all of your money. If the Government has legal rights to all of the wealth in the country, then anything it lets you keep is a gift. If it does not, then cutting taxes is not putting money into pockets; rather, it is merely refraining from taking it.

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Well the school year is a few weeks old and I and my fellow 2L’s are therefore already buried. That being said, it’s never good to let a blog grow cold, so hopefully I (and the other contributors!) will find time to re-energize it. One thing you may notice is the name change. I felt it was time for something punchier; that time is now.

Anyway, on to business.

I am not all that interested in economics per se, nor do I consider myself a political guru by any stretch. Nonetheless, I wanted to offer up a remark about the astonishing $700,000,000,000.00 government bank buyout that is currently occupying headlines.

I don’t pretend to know all the details of this plan, but obviously, someone is going to have to pay for it and everyone knows the U.S. government is already dead broke. That fact also brings up an interesting corollary that I am not seeing mentioned in the media: We are in this position because of widespread and rampant financial mismanagement. So why do we think that the federal government (which already has a $10 Trillion debt to testify to its financial management prowess) is going to make the situation better? And even if we could be sure it would, does that necessarily mean that it should?

It makes me nervous when the government interferes in free markets for the purpose of economic engineering.

One other point that goes to my caveat regarding politics. I would consider myself conservative, but I would not call myself a Republican. One reason for this is exemplified by this issue. If liberals can be counted on to increase government spending to pay for gratuitous government programs, why can’t conservatives be counted on to keep the government uninvolved and let the market regulate itself? Why does the choice seem only to be where we spend the $700 Billion we don’t have?