THE GROWING POWER OF GOVERNMENT AND THE THREAT TO LIBERTY: ELECTION 2016

declaration of independence

OF A POST TO COME promised to compare the governing approaches of Donald Trump and Hillary Clinton with respect to two issues.

  • The growth of the power of government.
  • The protection of our rights.

The Growth Of The Power Of Government

Why is it a problem when government is powerful? Government exists to protect our rights. Yet the power we give our government makes government itself a threat to our rights. Therefore, we must choose between giving the government just enough power and giving it too much.

  • To give our government the resources it needs to defend our rights, we must give our leaders the authority to tax us and spend our money. Nevertheless, the more we allow our government to tax and spend, the more we work for government instead of ourselves. At some point, we risk slavery.
  • Some decisions which effect a people must be made jointly. Thus, government must sometimes make decisions we would otherwise make for ourselves. So it is that in a nation of free men and women, we have laws that restrict us from harming each other (traffic laws, for example). In a nation of slaves, however, the laws just list a few trivial decisions that the leaders permit the people to make for themselves.

Here is a table that summarizes where the candidates stand.  Not certain the information is correct? Then check their web sites. I have only provided links where their positions are not available on their own websites.

ISSUE Donald Trump Hillary Clinton
Taxing and Spending Favors tax simplification and reduction Favors increased taxation and spending (inferred from lengthy list of proposals)
Healthcare Private market solution Doubling down on Obamacare
School Choice For School Choice. Will end Common Core Against School Choice. Favors Common Core.
Immigration Favors extreme vetting Open borders/put new immigrants on the dole
Government Regulations Committed to reducing regulations Defends the current regulatory regime
Free Trade Opponent of the big trade bills Helped to craft TPP

To be continued: The Protection Of Our Rights

WHY I SUPPORT DONALD TRUMP

Trump in August 2015 (from here)
Trump in August 2015 (from here)

Why am I going to vote for Donald Trump? If you check earlier posts on my blog you will find I once supported Senator Ted Cruz. Since Trump and Cruz parted with bad feelings, I am not happy with Trump. I think Trump has a problem with keeping his ego in check, and he gets very nasty when he doesn’t.  That said, Trump’s problems ego problems look to be of the ordinary variety. He is not a political pro, and the stresses of running a political campaign are extraordinary. So there is not much reason to expect him to handle those stresses like a pro. Hopefully, he is learning. After you needlessly insult someone, it can be difficult to patch things up.

Still, I have a problem. Like every other voter I have to figure out who to vote for.  The two candidate with a serious possibility of winning are either Donald Trump or Hillary Clinton, and I vastly prefer what Donald Trump has promised to do.

Here are my key issues (See Trump’s Positions Page).

HealthCare Reform

Trump will fight for the repeal of Obamacare.

But none of these positive reforms can be accomplished without Obamacare repeal. On day one of the Trump Administration, we will ask Congress to immediately deliver a full repeal of Obamacare. (from here)

Trump has also promised to work to replace Obamacare.  I am not sure I will like what he and Congress cook up. Nonetheless, he promises to work for a system that uses free market principles.

Tax Reform

Trump will fight for a simpler tax system and to eliminate the death tax.

When the income tax was first introduced, just one percent of Americans had to pay it. It was never intended as a tax most Americans would pay. The Trump plan eliminates the income tax for over 73 million households. 42 million households that currently file complex forms to determine they don’t owe any income taxes will now file a one page form saving them time, stress, uncertainty and an average of $110 in preparation costs. Over 31 million households get the same simplification and keep on average nearly $1,000 of their hard-earned money. (from here)

We should get rid of the income tax. As the paragraph above indicates, the people who advocated the 16th Amendment to our Constitution, created a monster that has funded the excessive growth of our government. Note that Trump’s tax reform does not address Social Security or Medicare, a major part of that 16th Amendment monster.

Trump’s plan includes tax relief for corporations and small business. That would help keep businesses from fleeing our country. Trump would also eliminate the Death Tax. That would also be a boon for small business and increase competition.

Therefore, what Trump proposes is progress. How do we get rid of the 16th Amendment. I expect that would take a Convention of the States.

Immigration Reform

This issue is the one that kicked off Trump’s campaign. I am not a big fan of the wall or Mexico paying for it. I just want to vet immigrants BEFORE they come into our country.

  • So we know each people coming into the United States is not a security threat.
  • Can speak English fluently.
  • Has a job or some means of support.

Currently, our welfare system is a draw to both legal and illegal immigrants. That’s stupid. We don’t need a welfare system so the Democratic Party can import voters.

In addition, we are allowing terrorists into the country. Instead of trying to help refugees as close to their homeland as possible, we are bringing them here, and we are not separating out the terrorists. There is no good excuse for that.

Trump is running on securing the border and securing our country again. I am happy with that.

School Choice

School Choice is my main issue. Unless we put education back under parental control, civil servants posing as teachers will continue to indoctrinate children. Am I trying to say I hate teachers? No. Of course not.

When government runs the schools, teachers are civil servants. That is a literal fact. As civil servants, teachers must teach what politicians who pay their salaries want them to teach. What politicians want children to learn very often not good for children. Politicians don’t necessarily love our children, but all them are tempted by power and prestige.

So I am disappointed Trump does not mention school choice prominently on his website, but he did say he favors school choice in his book (see my post, CAN DONALD TRUMP DELIVER ON HIS PROMISES?), Crippled America: How To Make America Great Again. In addition, Gov. Mike Pence, his running mate, apparently has an interest in the subject (see Ryan Applauds Governor Pence As Vice Presidential Choice) and Trump is on the record as being against Common Core (see DONALD J TRUMP PRESIDENTIAL ANNOUNCEMENT).

Conclusion

On the issues that matter most to me, Trump is the best choice.

ARE YOU WILLING TO FIGHT A TAX INCREASE?

moneytreeMuch of politics revolves around budget wars. How much money? Provided by who? Spent on what? By whom?

So it is that tomorrow (May 6, 2016) the Prince William County Board of Supervisors will have a meeting (at the Prince William County McCoart Administration Building, Board Chambers, 1 County Complex Court, Woodbridge, VA), and the budget is on the agenda.

Here is Supervisor Pete Candland (R-Gainesville) take on it.

Friday night, May 6, the [Prince William] Board of County Supervisors will set the tax rate for the FY17 budget, and the choices are very clear.

The county executive has proposed a 3.88 percent tax increase that will increase county spending and expand county government by $90 million in the next year alone.

That tax hike was based on a five-year plan that assumed a robust economy that would skyrocket out of the effects of the Great Recession. Unfortunately, our economy continues to be sluggish, hitting mid to low income earners the hardest. (continued here)

Of course, there is considerable controversy. The Prince William County School Board Chairman Ryan Sawyers, a Democrat, is uttering the usual class warfare rhetoric. Why?

To explain his point, Sawyers noted that homeowners in Gainesville, where properties are worth an average of $495,000, will save more from the flat-tax rate than homeowners in Woodbridge, where the average home value is about $295,000. (from here)

So if you live in the east end of the county, you should advocate a tax increase so you can screw the west end? If you live in a small house or apartment, you should advocate a tax increase so you can screw the folks who live in big houses. Why?

Of course, since he is the chair, Sawyers has a ready made propaganda machine => Click for the facts. The Financial Services services department of PWCS is, of course, a wholly unbiased source.

Anyway, read up on the matter.

Note that those who support Candland’s call for flat tax rate will be gathering at the Prince William County McCoart Administration Building at 6 PM on May 6, 2016 to speak to the board of supervisors and to stand with those board members who stand in opposition to a tax increase. The people who live off the government can always be counted upon to have representation at these meetings. Perhaps it is about time the people who pay the bill showed up too.

Can’t show up? Then please contact your supervisor and let them know how you feel about paying more taxes. Do you really want to pay more taxes just because some elected official wants to spend more of your money? No? Then complain.

WHEN ECONOMISTS BECOME THE COURT MAGICIANS — PART 1

The Pharaoh watches as the rods of Aaron and his magicians become snakes. (from here)
The Pharaoh watches as the rods of Aaron and his magicians become snakes. (from here)

Long ago Moses visited Pharaoh and told him God’s command: Let my people go! The Pharaoh disobeyed. So through Moses God brought ten plagues upon Egypt. Even though Pharaoh’s magicians, Jannes and Jambres, could not undo what God had done, they “duplicated” the first plagues God brought upon Egypt, and for some strange reason, Pharaoh took comfort in that.

What is magic, that thing magicians do? More often than not “magic” is just sleight of hand. The magician just fools us into believing he is doing something he is not actually doing. Sometimes, however, even the magician does not know what he doing.

That thing we call the economy is one of the most mysterious things in the world. That is, even though we depend upon it for our food, clothing, and shelter, none of us know exactly how it works. Therefore, when what is going on in the economy concerns us, we consult “experts,” economic magicians, to find out what we should do.

Economic magicians? Does that seem excessively derisive? Then consider these two stories.

Will negative interest rates come to the United States? Probably. Sadly, what economists recommend these days often does not make much sense. Our economy is becoming too contrived, like a house of cards. The problem? Well, let’s begin that discussion by considering a magic trick we call fiat money.

What is ‘Fiat Money’
Fiat money is currency that a government has declared to be legal tender, but is not backed by a physical commodity. The value of fiat money is derived from the relationship between supply and demand rather than the value of the material that the money is made of. Historically, most currencies were based on physical commodities such as gold or silver, but fiat money is based solely on faith. Fiat is the Latin word for “it shall be”. (from here (www.investopedia.com))

Because it is not backed by anything, fiat money has no intrinsic or innate value. That is not to say financial analysts do not have formulas to calculate the intrinsic value of fiat money. Nevertheless, fiat money has no utility of its own.

The value that we get from goods and services is innately apparent from the simple, most basic acts of living. We need food to survive, so food has value. The value for tradeable goods and services is predicated on utility and relative scarcity.

For financial assets, and money is the world’s first financial derivative, there is no direct utility. It does not satisfy any basic demand of survival or continued existence. Therefore, any value attached to financial products does not come from utility. It comes from faith. (from here)

What does Jeffrey Snider, the author of the above, mean by “faith.”

Value itself is nothing more than the outward expression of individual faith. The traditional value of money is really just an outgrowth of its historical reputation, earned through so many actions and consequences. Money may seem to add a level of objectivity into the discussion of value, but that is only because of a more universal “faith” in the transactional price discovery process it allows. (from here)

So why do we believe our money has value? There is actually a little more to it than merely believing fiat money is “real” money. Remember that our government uses its power to define fiat money as legal tender, that is, the government says we can legally use fiat money to pay off our creditors.  That includes the government itself. Don’t we pay our biggest bill, our taxes, with fiat money?

Thus, using its power, the government prints money and creates a demand for it. So it is that even though fiat money has no actual value of its own, the value of fiat money still follows the law of supply and demand.

  • Supply equates to scarcity. How much labor or how many goods and services are required to obtain a certain amount of money?
  • The demand for fiat money depends upon the bills we must pay. What is the amount of money we need to pay off our creditors?

Therefore, to make its fiat money serve as an appropriate means of exchange, our government must regulate both the supply of and the demand for its fiat money. That’s what we will talk about in the next post.

Note: that I don’t claim to have a huge amount of economic expertise.  I am sharing my observations in the hope of promoting a discussion. Hence corrections and comments are welcome. If you want your comments to include what you think of the economic proposals of the presidential candidates, that is okay with me.