Friday, November 13, 2015

Press Delete

I don’t want to talk much about Tuesday’s presidential debate. But that’s the inspiration source for today’s post. Ted Cruz offers a plan to get rid of five federal departments: the IRS, Energy, Housing, Education, and Commerce. (Yes, he accidentally listed Commerce twice in the debate; big deal.) It got big cheers. So maybe it’s worth looking at the suggestion.

Cruz's logo for the plan to get rid of these five departments

Cruz’s point is that the way to get the budget under control requires discontinuing expenditures for things that aren’t authorized in the Constitution, and combine that with major tax reform—to a flat tax. That simplification and relief to businesses would leave more money in the private sector, freed up to be used in a growing economy.

The way things are budgeted in Washington is different from your household. In a lot of ways. One way is that they only look at revenue estimates, not how leaving money in the hands of citizens will affect the economy. So, in Washington, a tax cut must be “paid for” to be revenue neutral. You’re supposed to ignore the Laffer Curve and assume you get less revenue with a lower tax, even when that is known not to be so.

You do spur the economy with a tax cut. And you get more taxpayers willing to pay the tax rather than find tax shelters. So you can get more revenue. But the government will still have trouble making ends meet if it keeps up the same spending rates.

The Spherical Model suggestion all along has been to spend only on what the Constitution enumerates as part of the federal government. So I’m happy to see a candidate who agrees, and spells out some of the first steps toward that end.

Cruz additionally suggests other means of eliminating extra-Constitutional expenditures. But for today’s discussion, we’ll just look at the five biggies he mentioned in the debate.

Do we need the IRS? 

We didn’t have an IRS from 1776 to 1913, when the income tax was instituted. There’s a treasury department, and revenue comes in somehow. The income tax was sold with a promise that it would affect only the most wealthy, and would never go above 7% (the original rate was 1% on income above $3,000 to 7% on income above $500,000). That promise was thrown out the window within just a few years, when it suddenly seemed necessary for everyone, and at a rate up to 95%.

So, anyway, the IRS wasn’t necessary before the income tax. Is it necessary with an income tax? Not if the law is simple enough, which a flat tax is. You still need a way to collect the taxes. How do states do it? There aren’t state-level IRS agencies. What is the mechanism? Probably a revenue department, connected to a department of the state treasury. There will be codes and forms, and formulas. There’s no doubt that a state can come up with a way to collect their revenue.

But there’s no IRS, and particularly no IRS that targets individuals and organizations for political reasons. And no IRS that can used for either targeting or favoring various earners.

I can imagine a country after deleting the IRS, and it looks lovely.

Do we need the Department of Energy?

The stated mission, according to the government website, is: “to ensure America's security and prosperity by addressing its energy, environmental and nuclear challenges through transformative science and technology solutions.” 

So the question is, what does the Constitution say about energy? That would be nothing. But, then, gas-powered engines hadn’t been invented at the time, and certainly nuclear power wasn’t being considered.

But, just as the IRS generates no income (it merely confiscates it from citizens), the DOE generates no energy. As for ensuring America’s security, that comes under the Department of Defense, and possible the State Department through diplomacy. Does the Constitution require the federal government to ensure prosperity? Not actually. It does expect the federal government to ensure the right conditions—fair and consistent laws, standard medium of exchange, for example. But it doesn’t require the federal government to get involved in energy development or any other commodity or utility. The government has “volunteered.” It takes our tax dollars, and distributes billions to companies it decides to favor (remember Solyndra). It subsidizes, in an attempt to alter the market, rather than trusting that the market will lead to the greatest innovation and best result for the people.

The DOE became a cabinet-level department in 1977. Its purpose was to combine the Defense purpose of developing nuclear weapons with the possibility of creating nuclear energy. We used to live near the Hanford Nuclear Site in Washington State—and felt quite safe there. It was part of the DOD when we got there, with both energy purposes and development of nuclear storage (vitrification was the main method, still underway I believe). But it was in the conservative corner of the state, and when Bill Clinton became president, he placed the site under the DOE. If felt much like the oil industry does when gasoline prices drop below $2 a gallon: people get laid off, or leave for other opportunities. Those who stay miss the days of growth, rising pay, and security.

It is likely that the free market, if not stifled by the DOE, would innovate and provide all the energy we need—with plenty to export as well.

We would still have energy—probably more—without the DOE. Let's delete the DOE?

Do we need Housing and Urban Development (HUD)?

What does the Constitution say is the federal government’s responsibility related to providing housing and building urban areas? It’s silent on that too? Hmm.

Did we have housing before HUD? Well, government-provided housing was a Roosevelt invention in 1937, and became a cabinet-level department in 1965. We had housing before that, clearly. In fact, housing is what individuals have built in response to the basic need for shelter wherever people settle.

The free market is pretty good at providing “affordable” housing. Intervention, to provide “affordable” housing—as with every other intervention of the federal government beyond its proper role—causes prices to remain high. It interferes with supply and demand. Cities with the most interference tend to have the least affordable housing—putting even relatively high earners in the category of those who can’t afford housing. Without the interference, the market would settle the price at what people are willing and able to pay. What a concept!

So, let’s delete HUD.

Do we need a Department of Commerce?

Again, what does the Constitution say? There is actually a role, referred to as the commerce clause. It refers to Article 1, Section 8, Clause 3, which gives Congress the power “to regulate commerce with foreign nations, and among the several states, and with the Indian tribes.”

So then we need to know what regulate means. Back in the day, when the Constitution was written, it was commonly used to mean made regular, functioning as expected. A well-regulated clock, for example, would be set to the correct time, wound up, and allowed to keep accurate time. A well-regulated militia would be one that had members of the citizenry armed and practiced in their ability to work together in defense.

So well-regulated commerce would mean commerce that happens regularly, smoothly, without hindrances getting in the way. And the federal government was supposed to make sure that regular free commerce could happen internationally, interstate, and with Indian tribes.

Unfortunately, the meaning of regulate has been twisted over time to mean the government micromanages, controls, limits, and makes all decisions concerning. So we’re spending $10B a year to have the government favor cronies around the world.

If we go back to the original meaning, suddenly there’s no need for a cabinet-level department. All we need is an expectation of free trade within the United States, and treaties that lead to free trade abroad.

Deleting the Commerce Department would mean deleting mounds of red tape, and actually lead to the free trade the Constitution intended. Press Delete.

Do we need a Department of Education?

We’ve only had this department since 1980—under Jimmy Carter, not Reagan, who was elected that year but didn’t take office until January 1981. Did we have education before 1980? Yes. I am an example of a student who went through my entire public school and college education before there was a Department of Education.

Does the Constitution require the federal government to educate the populace? No. It’s not mentioned. There are those who can argue that government has an interest, and therefore a role, in an educated populace. But even those who successfully argue that viewpoint can’t justify a federal government takeover of something that is a parental responsibility, possibly aided by local government, or state government as the least local.

As always happens when the government steps beyond its proper role, the goal of more efficiently and effectively educating students is exactly what fails. Scores are lower. Graduation rates are lower. Preparation for the job force is compromised. And the cost for this outcome is triple per student what it was before the Department of Education was created. And lately they make the fallacious claim that Common Core is a national solution—providing standards that will improve our educated place in the world. Whenever the federal government says something like that, you can trust they are heading 180 degrees in the wrong direction.

The Department of Education has also stuck their fingers into higher education, with the purported purpose of making college more affordable. So you know it would do exactly the opposite. Since its “help” began, the cost of tuition has increased at a rate 2 ½ times the rate of inflation. If you’re having trouble with the math, because of your education, that simply means it’s a lot more expensive to get a college education than when the government stepped in to “help.”

If it were only money, we could almost forgive the government for being wrong but well intentioned. But it has overstepped boundaries to impose social engineering. It tries to force schools to allow biological males into dressing rooms with underage females. It controls curriculum and accreditation. And it has a stranglehold on hiring in higher education, so that your young person is at least three times more likely to hear the opinions of a leftist (i.e., southern hemisphere tyrannist) than a conservative (northern hemisphere freedom lover). If education is meant to teach students to think, the Department of Education is meant to force students to think what the government wants them to think. That’s not education; this is brainwashing.

If you value education, delete the Department of Education. Return the money and the decisions to the local level in contact with the actual students, and let the free market, with its innovation, adjust the price.

So, yes, let’s select the IRS, DOE, HUD, the Department of Commerce, and the Department of Education, and press Delete. And then empty the trash bin so they can never be brought back.

If you’re wondering how a President Cruz would accomplish this deletion, and how disruptive or sudden it would be, here’s what he says:

To do that, I will press Congress relentlessly. And I will appoint heads of each of those agencies whose central charge will be to lead the effort to wind them down and determine whether any programs need to be preserved elsewhere because they fall within the proper purview of the federal government. I do not anticipate lists to be long.
And in addition to these big five, which he calls “Five for Freedom,” he’s also planning on deleting an additional 25 specific agencies, bureaus, programs, and commissions. And then he’ll look further, and get rid of everything that exists in defiance of the Constitution—which he has known from memory since his early teens. He knows the law. And I agree with him that America thrives whenever it abides by our brilliant, inspired Constitution.

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