The most offensive claim made during the debt-ceiling controversy is that there’s a moral equivalence between cutting government spending and raising taxes. President Obama asks for “shared sacrifice” to reduce the budget deficit. In his view, if the government spends more than it takes in — it currently borrows more than 40 cents of every dollar spent — the “balanced” approach is to “cut” spending and raise taxes.
There are quotation marks around “cut” for a good reason. No one — Republican House Speaker John Boehner included — wants to cut spending in the commonsense meaning of the term: namely, reducing government spending from today’s level ($3.8 trillion). No, in Washington-talk, to cut a budget is merely to reduce the rate of increase that would have occurred in the future if current law were left unchanged.
If the politicians were honest — and reporters committed to telling the public the truth — they would talk about smaller increases in spending, not “cuts,” but even that wouldn’t be entirely truthful, because in many cases the reduction in future increases itself is an illusion. It involves merely canceling the authority to spend money that no one expects to actually be spent.
As noted, the so-called balanced approach to deficit reduction sees a moral equivalence between any reduction in spending (even from future increases) and raising taxes. Some people go further and treat government’s abstention from taxation as spending in itself. Think about that: If the government, in its mercy, decides not to take $10 from you, that is an expenditure. By that logic, if the politicians change the law and take the $10, that’s a spending cut! Only in Washington …
Bluntly put, there can be no moral equivalence between government’s spending people’s money and abstaining from taxing that money. To believe otherwise is to believe that the government owns all income and wealth — which would be equivalent to believing that the government owns us!
In a fully free society — which the United States more assuredly is not — people would be at liberty to earn income through voluntary exchange (without anti-competitive privilege or subsidy) and to keep what they legitimately acquire. Taking someone’s belongings without consent would be regarded as theft. That would go for politicians as well as anyone else. All transfers of wealth and income would have to be accomplished through persuasion and consent. Physical force and fraud would be forbidden. Taxation, in the words of a great libertarian, Frank Chodorov, is robbery.
Thus the government’s decision not to tax cannot be a form of spending, and it cannot be equated with a refusal to sacrifice in behalf of fiscal integrity.
That is not to deny that in our corporate state, large incomes can be acquired through government-granted privilege and other political machinations. But the way to deal with that is to end all privileges. Politicians are hypocritical when they call for higher taxes on all people making more than $200,000 a year — even those who earned it without political favor — while leaving the system of privilege essentially intact.
Part of the political game now being played is assigning blame for the growing debt and deficit. The Democrats, the more openly big-government side (Republicans are for big government too but are more covert about it), say that the deficit is attributable as much to the failure to tax — through the tax cuts of 2001 and 2003 — as to the propensity to spend. Even a former Reagan and George H.W. Bush official, Bruce Bartlett, agrees. They claim that the government’s fiscal condition would have been far better had those cuts not been enacted, particularly considering that George W. Bush launched two wars and enacted a Medicare drug program. It’s certainly true that big expenditures without revenues to cover them created the deficit — but the moral course would not have been to abstain from cutting taxes or to raise them. It would have been to not spend the money. The wars were immoral (though profitable for the well-connected), and the drug program was an expansion of the welfare state, which forcibly distributes other people’s money.
A humane society does not require robbery and political corruption. It requires freedom for people to earn, to keep what they earn, and to help each other through mutual aid.