Government as Parasite
by Sheldon
Richman, May 2001
The Republicans still don’t get it. They say they want a tax cut
because “the surplus is the people’s money,” but their heart
isn’t in it. If they truly believed that, they wouldn’t quickly add
that we need a tax cut to avert a recession. They supported the tax cut
before there were signs of an economic slowdown, so why reach for that
justification now? Keynes is dead; let’s leave him that way.
How do they expect us to believe them when they propose to cut taxes
by only a small percentage of the expected budget surplus? The House
Republicans voted for an even smaller cut than President Bush proposes.
If the surplus is really the people’s money, why can’t we have it
all?
Well, they might say, the government needs the rest of it to do the
people’s business. But that’s an opening the Democrats can drive a
truck through. They are unfazed when Republicans say it’s the
people’s money. In the Democrats’ view, government is the agency
that spends money on behalf of all the people. For them and their
constituents, it makes no sense to cut taxes in the name of the people,
since it would deprive the government of what it needs to benefit the
people. And since about half the income earners in the country pay
little or no income taxes, the Democrats will find many sympathetic
ears.
If the Republicans wish to counter the Democrats’ case, they will
have to do it at the bedrock level. When the Democrats say that the
surplus is the people’s money and that’s why they want to spend it
on the people’s needs, the Republicans will need to point out the
fundamental problem with that view. Government doesn’t spend the
people’s money on the people’s needs. “The people” consists of
separate individuals. Some of them produce wealth and pay taxes. Others
produce little or nothing and consume taxes. The government is the
transfer machine that moves money from the first group to the second. A
tax cut reduces the amount of money transferred from producers to
nonproducers. Thus tax-cutting is a matter of simple justice.
It would be nice to hear the Republicans say this. But they can’t
be too clear about it. If they were, we might question a lot of things
that they plan to do. For example, if they were to forthrightly condemn
the transfer system, we might question their plan to subsidize
faith-based social-service organizations. Why should the taxpayers be
forced to support those groups? The Bush folks will respond that secular
groups are already subsidized and the Bush plan simply would end
discrimination against religious groups doing the same kind of
social-welfare work. But there is a better way to end the
discrimination: cut off the money to the secular groups. Let people keep
their own money and decide what, if any, social-welfare activities they
wish to contribute to. That’s more consistent with Mr. Bush’s
message that the money belongs to the people.
He undercuts his message in other ways as well. He favors a
prescription drug subsidy for low-income elderly people. In other words,
he wants some people to be forced to pay for other people’s medicine.
This will have serious economic consequences. For example, it will set a
precedent for the wider subsidies favored by the Democrats. Worse, it
will begin a process that will most likely lead to life-threatening
price controls on the pharmaceutical industry. But the fundamental
objection is moral: it will transfer money from producers to
nonproducers. If people want to help others buy medicine, fine. But
force is not justified. If the GOP really wants to sell its tax cut, it
will have to explain to the American people that government doesn’t
look after “the people’s” welfare. Rather, it helps certain
favored groups at the expense of everyone else. It does so by taxing the
wealth of producers in order to subsidize other people’s consumption,
depriving the rightful owners of the freedom to consume or invest as
they see fit.
In other words, the Republicans will have to identify the government
as the parasite it is. But can they do that while engaging in parasitism
themselves?
Sheldon Richman is senior fellow at The Future of Freedom
Foundation in Fairfax, Va. (www.fff.org), and editor of Ideas
on Liberty magazine.
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