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The $9 Trillion Federal Budget

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George Bush would spend more on a tax cut for the wealthiest 1 percent than he would spend on Social Security, health care, education, and the armed forces combined.

Vice President Al Gore said that, or something like it, hundreds of times in the debates and on the campaign stump. Just once I’d like to see Governor Bush say to the American people, “Apparently, Vice President Gore cannot understand the difference between cutting taxes and spending money. If he cannot make even that elementary distinction, how can he be entrusted with the presidency?”

Alas, Governor Bush can’t say it because he himself doesn’t understand the point. That’s the mess we find ourselves in. It doesn’t get any more basic that this, folks: Government can spend your money or it can let you keep it. The first option is called “taxing and spending,” the second “tax abstention.” The categories logically cannot overlap. Government either takes that hard-won dollar out of your pocket or it doesn’t.

That’s not what happens in Al Gore’s world. For the veep, when the government abstains from taking a dollar from you, that is a form of spending, which competes with all other possible forms of spending. It may well decide that there are better uses for that dollar. Gore thinks there are plenty of uses better than whatever purpose to which you would dedicate that dollar. Indeed, his running mate, Sen. Joseph Lieberman, said that “spending” the money on a tax cut would “be a waste of that money.” In his own debate with GOP vice presidential candidate Dick Cheney, Lieberman said the wealthy shouldn’t get a tax cut because “they don’t need it.” If only Cheney had turned to him and said, “When did this country enshrine Marx’s principle ‘to each according to his need’”? (Actually, the answer is: “Long ago.”) I guess that would have been criticized in the media as a mean-spirited attack.

The implications of Gore and Lieberman’s outlook are astounding. If cutting a tax is equivalent to spending money, then it must be true that the government is also spending whatever money it does not now take from the taxpayers. After all, it could have taxed that money and used it in other ways. Therefore, its decision not to tax it is, in Gore’s logic, an expenditure.

In other words, the government’s real budget is more than $9 trillion, the gross domestic product of the United States. The government owns all income and graciously lets us keep some of it. But the amount we may keep is subject to change at any time.

There is one problem with the Gore worldview: the money he wants to spend belongs to someone! Surely, his mother told him during his privileged childhood that money doesn’t grow on trees. It’s the result of effort and ingenuity. A dollar taxed is first a dollar earned by someone. Is that producer to receive no consideration in the matter? Gore and Lieberman may respond that the wealthy don’t need their money, but no self-respecting American, who aspires to be wealthy, would accept that shameful answer.

I wish I could say that Governor Bush understands what Vice President Gore does not. Alas, he shows almost no sign of such understanding. When he says, “the surplus is the people’s money,” it sounds as though he understands. But “the people’s money” can also be interpreted in a collectivist way. Al Gore responds to Bush’s slogan by saying, “It’s also the people’s Social Security and the people’s health care and the people’s education.” I haven’t heard Bush’s rebuttal. But he’ll have a hard time coming up with one, since he too believes the government should provide pensions, health care, and education. If two people accept the same premises, the most consistent one will tend to win the arguments. Gore is certainly the more consistent collectivist.

But contrary to the vice president, the government does not have first claim on the wealth that Americans create. Nor does it have the right to usurp the right of each of us to live according to his own purposes. Has the welfare state so corrupted the American spirit that we are willing to embrace those profoundly un-American ideas?

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    Sheldon Richman is vice president of The Future of Freedom Foundation and editor of FFF's monthly journal, Future of Freedom. For 15 years he was editor of The Freeman, published by the Foundation for Economic Education in Irvington, New York. He is the author of FFF's award-winning book Separating School & State: How to Liberate America's Families; Your Money or Your Life: Why We Must Abolish the Income Tax; and Tethered Citizens: Time to Repeal the Welfare State. Calling for the abolition, not the reform, of public schooling. Separating School & State has become a landmark book in both libertarian and educational circles. In his column in the Financial Times, Michael Prowse wrote: "I recommend a subversive tract, Separating School & State by Sheldon Richman of the Cato Institute, a Washington think tank... . I also think that Mr. Richman is right to fear that state education undermines personal responsibility..." Sheldon's articles on economic policy, education, civil liberties, American history, foreign policy, and the Middle East have appeared in the Washington Post, Wall Street Journal, American Scholar, Chicago Tribune, USA Today, Washington Times, The American Conservative, Insight, Cato Policy Report, Journal of Economic Development, The Freeman, The World & I, Reason, Washington Report on Middle East Affairs, Middle East Policy, Liberty magazine, and other publications. He is a contributor to the The Concise Encyclopedia of Economics. A former newspaper reporter and senior editor at the Cato Institute and the Institute for Humane Studies, Sheldon is a graduate of Temple University in Philadelphia. He blogs at Free Association. Send him e-mail.