"Do You Austrians Have a Better Idea?"
A lot of people get annoyed with Austrian economists because they tend to be so dogmatic (we prefer the term consistent) and because they cloak their strictly economic claims with self-righteousness (we prefer the term morality). After a good Austrian bashing of the latest call to steal taxpayer money and waste it on something that will make a given problem worse, the stumped critics will often shout, "Oh yeah? Well do you guys have a better idea?"
Now, in truth, someone doesn't have to have a better suggestion in order to point out that a recommended strategy will exacerbate the situation. If an allergic man has been stung by a bee, I don't know what to do except rush him to the hospital and maybe scour the cupboards looking for Benadryl. But I'm pretty sure drawing blood from his leg, in order to inject it into his arm and thus "stimulate his immune system," is a bad idea on numerous accounts — not least of which, is that I'm pretty sure an allergic reaction means your immune system needs to calm down. But the point is, if a bunch of guys hold the man down — he has to be forced to endure the procedure for his own good, don't you know — I feel perfectly qualified in yelling, "Stop!"
If you grasped that analogy, you can understand my feelings about anything Paul Krugman writes.
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The author goes on to make a number of suggestions, which I will simply list. If these sound nuts to you -- and only a libertarian wouldn't think so -- I sincerely hope you will go click through and read the article to see why they aren't nuts -- but are the only sensible suggestions you are likely to hear about this crisis.
1. Do nothing. That is, Do No Harm.
2. End personal and corporate income taxes. No, really. (Did you know the government took in $1 trillion last year from other than personl and corporate income taxes? No? You have much to learn.)
3. Dismantle the Social Security system -- eventually, not right now as it would be obviously too disruptive. But head in that direction.
4. While the enormous stimulus effects of ending personal and corporate income taxes are solving our financial crisis and bringing in more tax revenues from other sources, cut federal government spending by $1 trillion, over several years. Remember that when Libertarian Party candidate Ron Paul, some years ago, was asked "If as a Libertarian you oppose income taxes, how will you pay for the government?" He responded, "Well, I wouldn't pay for *this* government...." It's true that if the government keeps increasing spending by a multiple of inflation year after year (as it has been doing for decades), you reach a point where only confiscatory taxes can bring in the needed money. This government is simply unaffordable, is the point. (Can't lose a trillion dollars, you think? Funny -- just ten years ago, the federal budget was a trillion dollars less than it is now. Think about that for a minute....) While expenditures are being cut, raise more money by selling off the lengthy list of governmental assets the government shouldn't own at all.
5. Cut expenses by eliminating, for example, the DEA (drug admin), which obviously doesn't do any good. And the SEC, which costs us billions but failed to catch Bernie Madoff, which is supposed to be its reason for existence. There are many other major federal programs we should think twice about, like the Dept of Education, which ensures that we'll never give a good education to our kids, especially our poor minority kids. Cut the Pentagon budget in half -- that would save a quarter-billion dollars right there. Worried that we won't have enough? Our annual budget for defense is $500 billion; China's, Russia's, France's, Iran's, Iraq's, Britain's, Italy's, Germany's, North Korea's, Japan's are all $50 billion or less each. Our defense budget is larger than the combined budgets of the next ten countries. Think twice before listening to Republicans who tell you we have to spend more, not less.
6. End the stimulus packages. Tell the Big Three car companies, and the banks, and the investment firms: This is a capitalist country; make money, keep it; lose money, eat it. Keeping alive Undead Companies is a formula for never coming out of the recession. Just think what Ford, the only US car company that isn't broke (yet), would look like if GM and Chrysler went out of business, or drastically reduced? Ford would soar! So would Toyota and Honda, which make most of their US-bound cars right here in the U.S., with US employees.
7. Legalize all immigrants who have jobs and pay taxes. We need jobs and taxes; if they're working, that's good, not bad.
Go for it! If you keep doing the same old things, if you keep BELIEVING the same old JERKS with the same old self-benefitting ideas, you'll keep getting the same results. Want radically different results? Take a closer look at some radical ideas -- especially ideas that weren't radical when our Founders thought them up.
