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Boulder County's Recycling Woes

The reasons given range from the sublime to the ridiculous.nbsp; President Clinton hauled out the old Washington Monument ploy, threatening that breathtaking cuts in every area of our national life that you would believe was important would result from small tax cuts.nbsp; Economists call this maneuver the Washington Monument ploy, in honor of the U.S. Park Service.nbsp; When asked to economize in the 1970s, the only economy the super-efficient Park Service could think of was closing the Washington Monument in July and August.nbsp; Savvy politicians always fight budget cuts by cutting the most visible service first.nbsp; Then everyone feels their pain.

Washington isnt feeling any.nbsp; The Tax Foundation calculates that between 1991 and 1998 the federal government increased its inflation-adjusted tax take by 40%.nbsp; In 1998, governments in the United States collected almost $9,400 in tax revenue for every man, woman, and child in the country.nbsp; Americans now spend more on taxes than on housing, household operations and health care combined.[1]

Was life in 1993 breathtakingly brutishnbsp; In 1993, federal government receipts were just $1.28 trillion.nbsp; By 1998 they had risen roughly 28% to $1.84 trillion on an inflation-adjusted basis.nbsp; This means that if federal receipts were cut by 10%, the government would still be able to buy more than it did in 1993.

Individuals are not so lucky.nbsp; Inflation-adjusted per capita personal income, the measure of how much individuals earned and kept, rose only 9% between 1993 and 1998.nbsp; In view of this, the philosophy of the elites appears to be one of let them eat cake.nbsp; They characterize those who want to keep their 9% raise as mean spirited scrooges.nbsp; Then they praise the compassion of fat cat officials who bellyache about the hardship of being limited to a 28% increase in spending other peoples money.[2]

Three other tactics are commonly deployed to make individuals feel guilty about putting government on an allowance.nbsp; The worriers wring their hands and moan that cutting taxes will increase the deficit.nbsp; A deficit occurs when Congress spends more than it takes in.nbsp; Raising the credit limit of a spendthrift when he exceeds it does not encourage thrift.nbsp; Neither does giving government more money when it threatens to spend more than its allotted sum.nbsp; More money for government just grows government.nbsp; Too much government stifles progress.

The savers think that we will be better off if the government taxes us and saves our money for a rainy day.nbsp; They forget that the government is not an individual.nbsp; Individuals can save by putting their money in banks, land, or the stock market.nbsp; Letting government do these things erodes the market economy that undergirds a free society.nbsp; Letting the government bank a surplus inevitably politicizes bank lending.nbsp; Letting it invest in the stock market nationalizes the economy.nbsp; Letting it buy land, when the federal government already owns, and arguably mismanages, about 25% of the land area of the entire country, denies the private sector productive assets.nbsp; Small governments can save by buying U.S. government bonds and the U.S. government reduce future tax burdens by retiring its debt.nbsp; Once that is done, it can save only by taxing at a rate below the economys maximum tax capacity.

The conspicuously compassionate argue against any tax cut as long as there are unmet social needs.nbsp; An example of this is Mr. Clinton exhorting women to oppose tax cuts because they need Medicare.nbsp; He says he wants to fix Medicare and he wants their tax dollars to do it.[3]

Neither meeting unmet social needs nor fixing Medicare is possible.nbsp; Unmet social needs will exist as long as scarcity is a fundamental characteristic of the human condition, and governments around the world have tried everything from price controls to police power and budget caps in their efforts to run health care systems like Medicare.nbsp; The results have been dismal.nbsp; Under Communism, bureaucrats in the Warsaw Pact governments deployed 100% of national production to meet social needs like health care.nbsp; Between 1964 and 1985 their efforts produced an unprecedented decline in life expectancy.[4]

In the United States, increases in government expenditures on things like education and health care already correlate with declines in quality.nbsp; In view of this, the truly compassionate would urge individuals to keep their own money.nbsp; After all, history demonstrates that when individuals are free to meet their own needs, unmet social needs tend to disappear.

Linda Gorman is a Senior Fellow at the Independence Institute, a free-market think tank in Golden, Colorado.



[1] The Price of Civilized Society Approaches $10,000 Per Person.nbsp; Press Release, The Tax Foundation, 2 September 1998.nbsp; www.taxfoundation.org/prpcs.html.

[2] Personal income figures from table 729, Personal Income and its disposition, 1990 to 1997 1998 Statistical Abstract of the United States.nbsp; Government expenditure figures from The Survey of Current Business,nbsp; various issues, Table 3.2 Federal Government Receipts and Current Expenditures.nbsp; Deflator used was Government consumption expenditures and gross investment, Table 7.1 Survey of Current Business, May 1999, Table 7.11 August 1997.nbsp; 102.5 for 1993 and 114.7 for 1998.nbsp; Percentage increased is calculated using comparison to base year.

[3] The Clintons Gall. 29 July 1999.nbsp; Investors Business Daily, p. A22.

[4] Nicholas Eberstadt.nbsp; 1995.nbsp; The Tyranny of Numbers.nbsp; p. 93

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