Failures of big government

2012-09-25T03:45:00Z Failures of big governmentby Joe Balyeat Montana Standard
September 25, 2012 3:45 am  • 

Mitt Romney was recently castigated for commenting that 47 percent of people are beholden to government, so they’re wedded to Obama and won’t listen to Mitt. His case was far more eloquently stated by George Bernard Shaw, who said, “A government which borrows from Peter to pay Paul can always count on the support of Paul.” It’s no evil secret that those on the receiving end of government payments tend to support big government candidates. Quibble about the 47 percent, but the rest is gospel.

Instead, the consequential issue that deserves focus is whether “borrowing from Peter to pay Paul” is a viable economic system on which to build America for our children’s future. Will arguments about dividing the pie 50 different ways lead to more jobs and more prosperity? Or is the real answer found in trying to increase the size of the pie? More importantly, when forced big government“equality” solutions penalize productive citizens with higher taxes, and subsidize less productive citizens; will that increase America’s prosperity, or will productive enterprise diminish as more people slowly slide from working for a living to some form of government dependency?

Winston Churchill stated the extreme example — “Capitalism may well be the unequal distribution of wealth, but socialism is certainly the equal distribution of poverty.”

The academic economic research is conclusive: nations with freer economies have far higher average incomes than nations with command-and-control economies. The data is incontrovertible: nations that score higher on the Economic Freedom Index also score higher on average income, and nations that score lower on the EFI also score pathetically low in average wages and in wage growth. Romney’s failure is not that he pointed out the 47 percent, but that he failed to point out that smaller government, lower taxes, and more economic freedom are more important to the 47 percent who pay no income taxes than they are to the rich. The only way for folks to move up from that “tax-less” 47 percent is for America to follow the proven path to prosperity through economic freedom, not the proven failure of big-government command-and-control and confiscation-and-collectivism which leads to “the equal distribution of poverty.”

Researchers have identified five components of economic freedom: the size of government, regulation levels, sound money policies, free trade, and the rule of law (property rights, fair courts, etc.). America ranked second in economic freedom during Reagan’s era, and subsequently ranked third behind Singapore and Hong Kong. Since 2008, America has been dropping, and precipitously so during the Obama administration. America recently dropped out of the top 10, all the way down to #18. Is it surprising that median household income has also dropped 8.1 percent in the last 4 years? That’s $4,400 less income per household.

Surprising to see a 21 percent increase in the number of Americans living in poverty and a 70 percent increase in the number of people on food stamps?

Romney’s failure is that he isn’t even trying to convince working-class America that our own best interests are found in abandoning redistributionist envy. Obama’s folly is that he still believes in the self-destructive, big government, command-and-control utopian fable proven false repeatedly by world history and academic economic research. Obama still blindly marches to his mantra stated clearly in 1998: “I actually believe in redistribution…”

Freedom isn’t just a fun notion about leisure choices. A free economy is what has built America into the most prosperous, powerful nation in human history. America is at a crossroads: if we follow the path of freedom, the “tax-less” 47 percent could shrink quickly as many people find good jobs and start happily paying taxes.

But if we succumb to the politics of greed and envy, we’ll soon find the socialist bottom — Peter will no longer produce profits to be pilfered by Paul, and we will have committed collective suicide of history’s most productive economy… and our impoverished children’s children will curse the choices we made.

— Joe Balyeat is the Montana state director of Americans For Prosperity.

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