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Friday, May 28, 2010

A Radical Solution to our Fiscal Crisis
  Economics piece by Kevin Price

I have been writing for decades, but I have probably used the word “crisis” more in the last two years in my articles than in all the other years combined.  There is a reason for that, the use of such hyperbole gets old.  I think such words should be used with restraint or they will eventually fall upon deaf ears.  Unfortunately, any word short of “crisis” simply does not make the grade in the times we live in today.  The government is doing more (poorly) and spending more (than ever) and it is bankrupting our futures and the futures of those who will not even be born for several generations to come. 

Currently the national debt is now growing at a rate annually that originally took almost 200 years for our country to reach for the first time.  We are a nation in financial ruin and we continue to spend as if money grew on trees. Desperate times call for desperate measures.  It is time for Americans to seriously consider the damage that comes from mob rule.

According to the government’s own statistics, less than half of all Americans even pay taxes.  This is significant because we now have a country where the majority is lulled into sleep as the minority is essentially oppressed by those who have “no skin” in the political process.  They have absolutely no problem with spending growing out of control because whatever they receive is with minimum burden on them.

Meanwhile USA Today reports that well over half of the population receives direct assistance of various types from the federal government.  This includes perennial welfare moms and the super rich who enjoy government bailouts.
The terrible situation we are in begs for radical change.  The Constitutional type.  In the early days of the Republic, people had to be property owners and even taxpayers before they were allowed to vote.  Furthermore, the federal government was very limited in what it could do.  With only seventeen enumerated powers and those voting having a vested interest, frugal government was much easier to achieve and maintain.

The principles of frugal government can be found on the micro level.  If a board of directors of an organization or business has a vote on an item that directly benefits one of those decision makers, that person is expected to abstain.  It only makes sense.  If that did not happen there would be cries of impropriety and would plant the seeds of financial ruin for any group or company.

The United States is going to have to take a similar approach to solve its financial problems.  The classical economist john Stuart Mill advocated the bold proposition that, if people received any government assistance, they would have to turn in their right to vote until they were no longer on the government dole.  This policy would apply to the mega rich, the very poor and everyone in between who were getting direct government assistance.  People seem to be concerned about “influence peddling.” They warn about lobbyists and political action committees throwing money at politicians in order to get their vote on key issues.  Yet, influence peddling runs both ways—it is a two sided coin.  Politicians who want to get reelected make all sorts of promises of money, goods, or services in order to buy votes.  If the voter became disenfranchised while on the government’s budget, politicians would have to find other ways of getting our votes.  Maybe they would boast about how frugal they are in the way they represent the voters.  A radical approach to government? Maybe, but it seems to me it could be long overdue.

Kevin Price
http://BizPlusBlog.com/

Posted by Kevin Price on 5/28/10 at 07:28 AM
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UPSSA United Progressive Socialist States of America