Dealing with poverty (was Re: What to call "Econ-Libertarians"?)
gjlee@uclink4.berkeley.edu
22 Oct 1997 14:02:40 -0700
Seth David Schoen wrote:
>
> Daniel Burton writes:
[snip]
> >On the contrary, it would seem to me that anyone who took the time
> >to examine the ultimate consequences of government intervention
> >would find that it invariably steps beyond its original intentions,
> >and ultimately cannot be restrained to do only what is good for the
> >country and not what isn't. This is one of the reasons that, even
> >though I think some government interventions into the economy would
> >be beneficial, I am nevertheless against them. (Not the only reason
> >-- I try to balance all the various angles of analysis of issues
> >that I can)
> Before FDR, so I've heard, there weren't so many concerns about
> this. Maybe it's possible to go back?
> >If you look at Harry Browne's book _Why Government Doesn't Work_,
> >almost all of the arguments presented are consequentialist.
> I think a lot of these are exaggerated and unrealistic. Browne
> liked to ignore negative consequences of things by arguing that some
> other benefit of deregulation would make up for them. I hope all his
> benefits come through!
> I'm in favor of the deregulations Browne proposes from
> deontological reasons, but I think he's just wrong and most
> libertarians are just wrong about their optimism about some
> practical things.
> Yes, there will be a huge increase in private charity if the income
> tax is eliminated, but will it really be enough to make up for
> welfare?
In many ways, government welfare harms the poor more than it helps:
"In 1965, 70 cents of every dollarspent by the government to fight
poverty went directly to poor people. Today, 70 cents of every dollar
goes, not to poor people, but to government bureaucrats and others who
serve the poor. Few private charities have the bureaucratic overhead
and inefficiency of government programs."
(excerpted from "Replacing Welfare" by Michael Tanner of the Cato
Institute)
Also, government welfare removes the stigma of depending on others for
your survival. Before welfare, poor people seeking charity had to beg
and humbly ask for assistance. Now, people on welfare treat it as a
right and expect to get paid every month. What incentive do they have
to work? Private charities look after the poor; government welfare
doesn't care about them. Why should we expect welfare recipients to
get a job anyway? In most states, welfare pays more than minimum wage.
Why should unwed teenagers care if they get pregnant? They'll just get
more money from the government. Even with the new welfare laws, the
government cannot give the needy the attention they require to get
back to work.
The poor have the most to benefit from a libertarian government. With
lower taxes and less regulation, it would be far easier for the
unemployed to find a job. The enormous profit in illegal drugs
encourages many children to deal drugs instead of getting a real job.
Minimum wage laws prevent unskilled workers from entering the
marketplace and learning a profession.
> All of the things government now provides still have to be paid for
> if people desire them. I believe that most of them can be provided
> more cheaply by the private sector, but lots of people don't think
> about all of the government services out there, and I'm not
> persuaded that it will suddenly occur to them that they actually
> want to pay for some of these things. (Partly, it's the public goods
> problem, and partly, it's a problem of apathy.)
> There was also a statistic that the average person receives
> government services with a greater dollar value than what he pays in
> taxes. This makes sense, if true, because rich people are being
> taxed so much more than everyone else. In that case, eliminating
> taxation will not benefit the average person from a financial point
> of view, assuming that people individually want most of the
> government services they actually use. It can still be supported
> deontologically. :-)
Don't forget about the law of unintended consequences--taking money
from the rich means successful businesses will not expand as fast and
people will not be as motivated to became rich in the first place.
Taxing wealthy corporations just means they will pass the extra cost
to the consumer by increasing prices. Taxing the wealthy means
penalizing the best in society. In effect, a "progressive" income tax
punishes success. Those who make the most money are the most
productive members of society, and they should be free to use their
money to produce even more wealth. Also, when businesses make a
profit, their success is passed on to investors through stock prices;
in many cases, these investors are the unions and charities that do
their best to help those with lower incomes.
George J. Lee