A few days before we departed for Baton Rouge to begin the current session of the Louisiana Legislature, I had occasion to speak to a group of high school students in my hometown about the precarious condition of our state and national economies. I outlined the budget debates that we’ll be having at the Capitol over the next few weeks, and I presented an overview of some of the primary arguments that will be made by each side.
When faced with a budget shortfall in government, I explained, there are ultimately only two solutions to the problem: increase taxes or reduce spending (or some combination of both). Liberals generally advocate the former, and conservatives like me advocate the latter.
At the conclusion of my introductory remarks, one very astute sophomore raised his hand to share an epiphany. “But, the socialists’ position just doesn’t seem right,” he exclaimed. “Why should the government be able to take more and more of what people work so hard to earn? It just seems… immoral.”
The student’s observation deserved a thoughtful response and I spent the remainder of the class explaining that there are three basic questions I believe every concerned citizen should ask in the midst of a budget crisis. As we near the end of this first week of our special legislative session, I thought it might be useful to share some of these thoughts.
Question 1: What should be the goal of our economic policy?
Any organized debate should begin with a central question. In this case, there is a critical need for all sides to agree on what the primary objective of our economic policies should be. In my view, what America needs—and what Louisiana needs—is a free market system that makes economic mobility and opportunity readily available for everyone. If any of us are willing to work hard and sacrifice, then the American dream should be within our grasp—as it was for previous generations.
Evidence shows that the best way to foster broad scale economic mobility and opportunity is to support what is best for middle and working-class Americans. If we can get that right, then we can widen the path out of poverty for more people, including the most disadvantaged members of our society. If we follow the command to love our neighbors as ourselves, we should advocate for nothing less.
A system that protects economic freedom reduces the interference of government and allows for unfettered innovation, the creation of new jobs, and economic growth. There should not be an “agenda for the rich” or an “agenda for the poor,” there should be one unifying economic agenda for all of us. Our tax policy ought to reflect that common spirit, and pursue the good of all.
Question 2: How large should government be allowed to grow?
If a majority of us can focus on that primary objective of economic policy, then the next logical question should be how do we best achieve it? Should government be our shepherd, so that we blindly follow its direction and depend upon it for our needs? What role should government play in a free republic, how large should it grow, and how much should we be made to pay for its services?
Obviously, some level of taxation is necessary and just to maintain a free and ordered society. Common sense, the Constitution, and even the Bible affirm that citizens have a moral and legal obligation to contribute a fair share to government so that it can fulfill its critical responsibilities to, for example, provide a national defense, sustain a police force and system of justice, and help those who are truly incapable of helping themselves and have no other support system.
The problem today is that the government is doing too much. And what it does, it does not do well. As we grapple over ideas for budget reform at the Capitol, many sincere legislators and conscientious citizens are coming to realize that government—both federal and state—has simply grown too large.
So, what IS the proper role of government? Thankfully, our founding documents answer this question. As the late, great Justice Antonin Scalia once wrote, “If you are interested in economic liberties, then, the first step is to recall the society to that belief in their importance which the Founders of the Republic shared.” Sometimes we need a reminder of our most fundamental principles.
Our nation’s birth certificate, The Declaration of Independence, acknowledges the “self-evident” truths “that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty, and the Pursuit of Happiness. --That to secure these rights, Governments are instituted among men, deriving their just Powers from the Consent of the governed.” Since our rights derive from God and not government, the Founders concluded, the only powers of government should be those that are given by our consent.
The Constitution was thus written to clarify that only certain, enumerated powers were to be delegated to government, under a careful system of checks and balances. With regard to collecting taxes, while that power is enumerated in Article I, section 8, the stated purpose is “to pay the Debts and provide for the common Defense and general Welfare of the United States.”
If they read the Constitution at all, many liberals and socialists today intentionally cite that section out of its proper context. The Founders did not intend to grant Congress the right to tax and spend for pet projects and special entitlements and whatever in the world legislators can dream up—because that would be a use of unlimited power, unbound by the Constitution’s enumeration of restricted authority. Taxation was supposed to be limited to that which is necessary to support the general welfare of the country (or the state) as a whole, and not particular parties.
But in the course of our history, and especially in recent years, we have wandered off track and allowed a growing bureaucracy to encroach into every area of our lives—smothering free enterprise, stifling innovation, and making larger groups of people subservient to the state. As Ronald Reagan used to say, “Government is not the solution to our problems. Government IS the problem.”
At both the federal and state levels, our government is spinning out of control, running unprecedented budget deficits, and driving our economy over a cliff. Our federal debt just crossed the $19 trillion mark, and Washington still spends nearly $4 trillion a year. The federal budget now funds more than 2,300 subsidy programs, hundreds of agencies, and 2.6 million civilian employees.
Here in Louisiana, our projected debt for next year alone is more than $2 billion, and still we have the highest per capita government spending in the South. We spend nearly 30% more than the Southern average, and yet we have little to show for it. As the economist Peter Drucker observed decades ago, our government "costs a great deal, but does not achieve much." When 22% of the managers in Louisiana’s classified civil service manage only one other employee, 19,000 consulting contracts bleed the public fisc, and $830 million per year is wasted in fraudulent Medicaid payments alone, everyone should recognize we have a major problem.
Apparently, most people now do. A research poll released this week found that 61% of Louisiana residents believe our fiscal problems are caused by too much government spending, while only 26% believe the state needs more revenue. Asked if the state should raise taxes for the current fiscal year shortfall, 72% of respondents said no. That mirrors the sentiments on the federal level, where recent polling shows that more than half of Americans think their tax dollars are wasted by Washington. As Yale University law professor Peter Schuck summarized, "the public views the federal government as a chronically clumsy, ineffectual, bloated giant that cannot be counted upon to do the right thing, much less do it well." The criticism is deserved.
The question for us today is: What should we do about all this? For regular folks like us, the answer seems pretty simple. If our families or small businesses begin to run into debt, we don’t have many choices. We tighten our belts, cut unnecessary expenses, and make whatever changes are necessary to balance our budgets. Government hasn’t worked that way for a long time. BUT IT SHOULD.
As I acknowledged to the high school class I was teaching, many on the far left insist that morality is on the side of big government, because raising taxes is the means by which government can be further expanded in order to “help more people” and “reduce economic inequalities” (by redistributing income). But are they right?
Without a reduction in the size of government and its expenditures, the current situation is simply unsustainable, and average working families will be saddled with larger and larger tax burdens and a decreased standard of living. The governor of Louisiana has currently proposed the biggest tax increase in our state’s history, with only a token reduction in state expenses. The plan would be absolutely suicidal for our state’s fragile economy, and ultimately harm the very citizens that the proposal is ostensibly intended to help.
Until the people force their leaders to get serious about reforms to the budget and mismanaged bureaucracies, the endless cycle of taxing and spending will only get worse. It’s not too late to downsize our government. Indeed, we should demand it. Some essential programs deserve to be protected, but others that are bloated and less effective should be trimmed or eliminated entirely. Reducing the size and scope of government is the only solution that can get us back on track.
Question 3: What amount of new taxes is appropriate?
When we hear the constant drumbeat for more taxes, I believe we need to ask the drummers these two crucial questions: How large should the government be allowed to grow? And at what point does the amount of taxation become unfair and—as the student observed—even immoral?
Should the government be allowed to take from us twenty percent of our hard-earned wages, or forty, or ninety? At what point does this become legalized theft? As Nobel Prize-winning economist Milton Friedman once noted, every time the state takes a dollar out of one person’s pocket and puts it into another person’s pocket, the state is making a moral decision. I believe the socialists’ claims to morality are far outweighed by the moral and logical positions of those of us who defend our constitutional freedoms.
Have you ever stopped to think about the basic fairness of our graduated scales of taxation? Is it inherently right to force some people to give to the state a much greater percentage of their earnings than others? I think it’s interesting to contrast our modern tax code with the biblical tradition of tithing to the church. God’s command to give ten percent has always applied universally to everyone, regardless of each believer’s respective income levels. (Voluntary offerings beyond the tithe flow from the goodness of the heart, and are honored accordingly.) If God doesn’t require a graduated scale for contributions, should Caesar? (I’m just asking.)
Raising taxes always has harmful ramifications. Perhaps it is no surprise that benevolence in a society decreases as taxes increase. When tax rates trend higher, charity rates are driven lower—and, in a cruel irony, demand for more government services rises as a consequence. The more citizens are forced to give to the state, the less they are willing and able to give to their neighbors, and even family members, who are in need. Thus, a vicious cycle of government dependency is perpetuated.
As taxes are raised higher and higher, people become less inclined to work hard and to make new investments. When an able-bodied young man concludes he can make just as much money on public assistance as he can if he works an eight hour day, he will decide at some point that work “is for suckers,” and he will stop helping to pull the cart and jump on the back for a free ride. Nevermind that his personal dignity gets diminished and he has a new abundance of idle time with which to cause mischief, the state has to first contend with his added weight on the cart—and increase the load upon those still beneath the tax harnesses.
Even a high school student can recognize this isn’t right—or sustainable. In a free country, people should generally be allowed to keep what they work hard to earn. And every freeloader who CAN work, should be made to do so. (That happens to be a biblical notion, too. See: 2 Thess. 3:10.)
Many of us were frustrated when Governor John Bel Edwards announced shortly after his election that he was removing the work requirement rules for food stamp recipients in Louisiana. Apparently, some believe that, for example, able-bodied 18-49 year old males with no health concerns and no children should not even be required to LOOK for a job, or perform a modest amount of community service, in exchange for a welfare check. This policy change means that taxpayers like us have to work even harder, and send more of our hard-earned money to Baton Rouge, so the state can redistribute it to guys who are lounging on their couches all day. This is not only morally wrong, it is crazy public policy.
Just this morning, a report was published from the Foundation for Government Accountability that focused on the extraordinary success of the recent welfare reforms in Kansas. At the time that conservative Governor Sam Brownback first implemented work requirements for food stamps in his state, only “one in five able-bodied adults on food stamps worked [and] nearly 93 percent of them were in poverty, most in severe poverty.” But the research has found that “within three months of implementing work requirements, half of these able-bodied adults cycled completely off the food stamps program, and the total number of able-bodied adults on food stamps in Kansas has dropped by an astounding 75%.” Moreover, once they began working, “their incomes rose by 127% per year.”
Kansas residents are delighted today because the state’s reforms “have saved taxpayers tens of millions of dollars each year, preserving limited resources for truly needy Americans.” Perhaps just as importantly, the Kansas approach has restored the integrity of work and renewed the individual dignity of the people who were encouraged to find it again.
As illustrated by the food stamp program abuses, a root problem with government is that it is, by its very nature, an inefficient steward of resources. Put simply, private individuals handle their own assets better than bureaucrats ever will, because individuals risk, spend, and invest their own hard-earned money with greater caution. Most people take lesser care of other people’s stuff, and they are more apt to waste or neglect their neighbor’s property than their own. For this reason, more good can be achieved for more people when we ensure that more money is kept in the hands of the individuals who earn it, instead of government. Only the private sector can create jobs, wealth and real opportunity for working Americans.
The reason that polling data this week shows such low public approval for more state revenue is because voters are understandably jaded. We’ve witnessed so much foolishness within government in recent years that most people believe the state will simply waste their tax dollars on inefficient government programs. Before people heed the state’s desperate call for more cash, they want, and deserve, to see a new policy of zero tolerance for nonsense.
There is at least one certainty about the Legislature and the Congress: both institutions will spend every single dime they can get their hands on. If the people have any hope of reducing the size and scope of government, they simply have to agree to give politicians less money to play with. I’ve only been a legislator for less than one year, but I can tell you what I have personally observed. What we desperately need in Baton Rouge, and in Washington, D.C., is a renewed emphasis on stewardship and accountability, and real, structural budget reform. If the people demand it, it will happen.
During every debate on the economy, we should remember that government has never been able to repair broken families, renew our values, solve our societal problems, or bring about prosperity. Only the people can do that, when they are allowed to be free. To quote Justice Scalia once more: “I know of no society, today or in any era of history, in which high degrees of intellectual and political freedom have flourished side by side with a high degree of state control over the relevant citizen's economic life. ...As a practical matter, he who controls my economic destiny controls much more of my life as well.”
While the budget crises we are facing today are unprecedented, the principles we are defending are timeless. I am reminded of the advice that Ronald Reagan gave in a speech back in 1977:
To win this battle against Big Government, we must communicate with each other. We must support the doctor in his fight against socialized medicine, the oil industry in its fight against crippling controls and repressive taxes, and the farmer, who hurts more than most because of government harassment and rule-changing in the middle of the game. All of these issues concern each one of us, regardless of what our trade or profession may be.
The Gipper had a way with words. And it turns out that his admonition in that speech 40 years ago is precisely the same advice that is still needed: “We should take inventory and see how many things we can do ourselves that we have come to believe only a government can do.” Let that inventory begin today.
A sound, fair, moral and inclusive economic policy that helps all citizens is still possible to achieve. Instead of more state and federal mandates, penalties and programs, we need a system that fosters more opportunities in the private sector for upward mobility. Economic growth helps everyone because it can raise the standard of living, restore the confidence of the people, and preserve what is left of our liberty.
Government should be the servant of the people, and not the other way around. Reagan concluded his famous free enterprise speeches with the same conclusion that we should draw today:
It all comes down to this basic premise: If you lose your economic freedom, you lose your political freedom and, in fact, all freedom. Freedom is something that cannot be passed on genetically. It is never more than one generation away from extinction. Every generation has to learn how to protect and defend it. Once freedom is gone, it is gone for a long, long time.
The day has come for our generation to protect and defend our freedom. The process may be difficult, but the necessary steps are becoming pretty clear. The next generation is counting on us to act decisively, and we must. The hour is late and the crisis is great, but we can do this—if we stand by our founding principles.