Tuesday, July 26, 2011

Williams and Sowell

Last night I spent some time (virtually) with two of my favorite economists: Walter Williams and Thomas Sowell. This always makes for a good evening. I listened to Walter Williams speaking to a group of college students on the proper role of government; it’s hard to get better than that. The lecture is from Intercollegiate Studies Institute, linked in their newsletter. I believe you’ll be able to access the whole speech (plus 20 minutes of Q&A) here. (You can sign up for the ISI newsletter, free, at www.ISI.org.)

I wrote down a few quotes: 

For moral people, we cannot allow legality alone to be our guide. 

Economic planning is nothing more than the forcible superseding of somebody else’s plan by the powerful elite. 

[This one is paraphrased only, and refers to what elected officials should be asking]: The relevant question is not “Is it a good idea?” The relevant question is, “Is it permissible by the Constitution?” 

Ah, good times! 

Also last night I read Thomas Sowell’s latest Townhall piece, “Debt-Ceiling Chicken,” which has given me something to think about. 

I am against government spending on anything not listed in the Constitution as powers granted to the federal government. The only caveat to that is that we have, unfortunately, made many promises, by way of elected officials who don’t carefully and respectfully read the Constitution. And these promises have affected people’s lives. When you have taken a sizable chunk out of someone’s paycheck for their entire lives, while simultaneously promising them a certain amount (tied to inflation) to cover their basic living income in their retirement years, you can’t after-the-fact suddenly say, “Since we have to cut back, you’re going to have to do without.” It was immoral to take their money (and continue to take our money) in the first place; but it is even more immoral to suddenly refuse to give them what they’ve been promised—at a time when they have no way to make up the difference. 

Some Medicare and Medicaid expenses also fit into these categories. That doesn’t mean these programs can’t be reformed; they must be reformed. But they must be reformed in a way that doesn’t starve or otherwise deprive the elderly and infirm. (The long-term solution will include encouraging thrift and savings, as well as taking care of one another through families and philanthropy. Depriving the most vulnerable is not part of any conservative’s long-term plan.) 

So, I continue to be very much against unconstitutional spending, and running up the national debt. And in that vein I have been against yielding on the debt ceiling. 

But Sowell points out that the debt ceiling, while a good idea in theory, as many things seem to be, has not done what it was meant to do in reality. Namely, it has never limited spending nor forced accountability for spending. In fact, he believes it is harmful; it allows the party in power to spend recklessly on anything they want to “give” to their voting constituents, and then, periodically when the ceiling is approached, bring in the nonparticipating party and share the duty and responsibility of cutting back. In other words, they give themselves credit for “giving” goodies to buy votes while simultaneously blaming their opponents as the bad guys who want to “take” those goodies away from those same voters. It’s a scam—at our expense. 

The scam has the additional affect of upsetting worldwide markets, simply because of the insecurity of the argument times surrounding the debt ceiling dates. 

So, here’s what I’m rethinking: The Republicans (and any Democrats with either integrity or an understanding of economics) must stand firm and use this moment to cut back on spending. We have to know that it is possible to both stand firm and stop the profligacy. And much of the predicted harm that comes from the debt ceiling has already happened.

So, stand firm this time. Then, sometime in the future, maybe we need to rethink the arbitrary debt ceiling. Not because limiting debt is a bad idea—we need to actually get rid of it over time. But because the debt ceiling simply doesn’t do what it is meant to do, and does instead quite a lot of harm.

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