Abolish the Income Tax

Jacob Hornberger writes:

In the midst of the perpetual statist debate over whether President Bush’s tax cuts for the rich should be extended or not, we libertarians should refrain from getting mired in that debate and instead continue raising people’s vision to the libertarian principle, which is: There shouldn’t be an income tax at all and everyone should be free to keep everything he earns and decide for himself what to do with it — spend, save, invest, hoard, donate, or whatever.

For more than a century, Americans lived without income taxation. The reason? Because they knew that income taxation was contradictory to the principles of a free society. When people are free, they are exercising the right to keep the fruits of their earnings. On the other hand, when government has the power to tax incomes, the people are relegated to the condition of serfs...

Let the statists argue over their statist reforms. Let us libertarians continue raising the vision of the American people to a higher level — toward building on the founding principles of liberty enunciated in the Declaration of Independence, including the freedom to keep everything you earn and decide for yourself what to do with it.

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No Right to Health Care, Education, or a Job

Jacob Hornberger writes:

Statists love to say that people have a right to such things as health care, education, or a job. That’s just plain statist nonsense. People do not have a right to health care, education, or a job.

People have a right to seek health care, education, or a job but they don’t have a right to them...

In other words, you have the right to pursue happiness but you have no right to force others to provide you with health care, education, or a job. Genuine liberty entails the right to live your live any way you wish, so long as you leave everyone else free to do the same thing.

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Social Security: Reality

Jacob Hornberger writes:

All too many Americans simply do not wish to see the reality of Social Security. They’ve lived all their lives under myths, illusions, and delusions, mostly self-imposed. And many of them get furious when you confront them with reality. It’s easier to continue living under the myths, illusions, and delusions.

Reality: There is no Social Security fund. There never has been a fund. There never will be a fund. From the very beginning, Social Security has been just another socialistic welfare program, no different from food stamps or agricultural subsidies.

Reality: The government is not like a private business. It does not create wealth. It is also not a fountain of wealth. It does not have its own money. The only way it gets its money is by taking it away from people in the private sector.

Reality: Social Security is a straight, out-and-out, socialistic program. It’s not a coincidence that the Social Security administration has a bust of Otto von Bismarck on its website. He was known as the Iron Chancellor of Germany. He got the idea of Social Security from German socialists and then introduced it into Germany’s paternalistic, welfare-state way of life.

Reality: Social Security program is one of major factors that are heading America toward bankruptcy.

Reality: Young people are already having a terribly difficult time starting out in life, including buying a home and raising a family. Why in the world would any senior citizen desire to make life more difficult for young people, including their children and grandchildren and their friends by continuing to impose an enormous Social Security tax burden on them?

Seniors have the opportunity to do the right thing before they pass from this life. They have the opportunity to call for the repeal, not the saving, of Social Security. Many seniors don’t need the money anyway. Some will have to continue working, which isn’t necessarily a bad thing. In fact, imagine the economic prosperity and job creation that would result from ending the enormous Social Security tax burden. Others will have to depend on their children or others for help.

What’s wrong with all that? Have Americans lost all their faith in the workings of a free society?

America’s experiment with socialism (as well as its experiment with military empire) has failed. America’s senior citizens should do the right thing and demand the repeal, not the reform, of Social Security. Repealing Social Security, the crown jewel of America’s welfare state, would help lead America out of its statist morass and put our nation back on the road of economic liberty, free markets, prosperity, sound money, voluntary charity, and a constitutionally limited-government republic.

The Biggest Threat to National Security

Jacob Hornberger writes:

Everyone is finally starting to recognize that the federal government is merrily traveling down the road to national bankruptcy ... and is going to take a lot of Americans down with it. The government is spending at least $1 trillion dollars more than what it is taking in ... every year, with no end in sight...

What are the biggest programs that all that federal spending and debt are funding?

Social Security, Medicare, Medicaid, and other so-called welfare-state entitlements, along with military spending, including the occupations of Iraq and Afghanistan.

Yet, what do Republicans and Democrats say? They say, "We promise you that we won't touch any of those programs. But we also promise you that we'll rein in out-of-control federal spending and debt."

That's ridiculous. Why? Because all those welfare-warfare programs amount to 80 percent of federal expenditures! How can they rein in federal spending without touching programs that constitute 80 percent of federal spending, especially when the balance of the spending includes interest on the debt and such sacrosanct programs as the war on drugs?

They can't. It's a joke when they claim they can...

What do we need a standing army for? What do we need a military-industrial complex for? What do they do for us?

Nothing good. They suck vast amounts of productive capital out of the pockets of the American people, they mire America in foreign invasions, occupations, assassinations, torture, rendition, indefinite incarceration, and suspension of habeas corpus and civil liberties, create new enemies every day, and send us further down the road to national bankruptcy with ever-increasing expenditures.

As President Dwight Eisenhower warned us many years ago, the military-industrial complex poses a grave threat to our freedom and well-being. Time has proven him correct...

It's time for the American people to confront the obvious: the welfare-warfare state way of life has proven to be a bad mistake. It should never have been adopted. We should never have abandoned the principles of liberty, free markets, and a constitutionally limited republic on which our nation was founded.

It's still not too late. We need to repeal, not reform, all socialist, interventionist, and imperialist welfare-warfare state programs, departments, and agencies. It's the only way to avoid national bankruptcy, hyperinflation, and soaring taxes and debt. It's the only way to restore freedom, peace, prosperity, and harmony to our land.

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Mismanaging the Economy

Jacob Hornberger writes:

What’s the real solution to America’s economic woes?

It lies in asking ourselves a fundamental question: Should the role of government in a free society be to manage an economy?

The answer is: No, absolutely not. The government has no more business managing an economy than it does managing people’s religious activities.

After all, what is an economy? It’s really just people sustaining and improving their lives and interacting with others in economic matters. It’s an intricate and complex process that involves countless people producing goods and services and exchanging them with others.

So, when the president purports to manage the economy, what he’s really doing is attempting to manage, control, direct, or influence the economic decisions of hundreds of millions of people, each of whom is trying to plan and direct his own affairs. In other words, one man — or group of people in the federal government — purports to plan, in a top-down, command-and-control manner, the economic decisions of countless people, a phenomenon that the Nobel Prize winning libertarian economist Friedrich Hayek called a “fatal conceit.“ It cannot be done, and in fact all that it produces is crisis and chaos.

The problem Americans face is not that President Obama is mismanaging the economy. The problem is a systemic one, one that delegates to the president the authority to manage the economy.

The solution to America’s economic woes lies not in getting better people in public office who can better manage the economy. The solution lies in prohibiting government officials from managing the economy. Managing the economy is not a legitimate function of government in a free society, and in fact is the root cause of a nation’s economic woes.

The French have a term for this: “Laissez faire, laissez passer.“ Let it be, let it pass. Leave people free to manage their own economic affairs. Separate economy and the state in the same way that our American ancestors separated church and state.

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Jacob Hornberger: Obama, BP, and the Rule of Law

I pointed out that President Obama exercised brute dictatorial powers in dictating to BP to hand over $20 billion of corporate money to federal officials, who plan on distributing the loot to victims of the BP oil spill.

Most everyone is familiar with the term “the rule of law.” Many people, however, don’t understand what it really means. They think that it means that people should obey the law.

But that’s not what the rule of law means. What it means is this: In a free society, people should never have to answer to the arbitrary dictates of government officials. That type of society is described as one based on the “rule of men.” It is what dictatorship is all about. In a society based on the rule of law, people have to answer only to well-defined and pre-existing laws that have been duly enacted by the legislature.

As the Nobel Prize winning libertarian economist Friedrich Hayek pointed out in his book The Constitution of Liberty, the rule of law is a necessary prerequisite for a free society.

At the time of the BP oil spill, the law provided that BP would be required to pay for all clean-up costs but was liable for a maximum of $75 million to private parties who suffered losses because of an oil spill.

Now, obviously that liability cap violated fundamental principles of responsibility. People should be fully responsible for all the damages they cause. The $75 million cap was likely enacted as part of the cozy corporatist relationship that has long existed between big corporations and federal politicians.

One thing is for sure: The liability cap almost certainly played an important role in BP’s safety precautions. After all, when a company thinks that its maximum liability for an oil spill will be only $75 million, as compared to the possibility of facing unlimited liability for an oil spill, that is going to cause the company to act differently when it comes to deciding how many precautions to take and how much money to spend on safety precautions.

In any event, the reasons the $75 million cap were enacted are irrelevant when it comes to BP’s liability. The rule of law entitles BP to the full protection of the law, no matter how distasteful the results.

The $75 liability cap did provide exceptions to the cap in cases where the company could be shown to be guilty of gross negligence or willful misconduct.

But a system based on the rule of law requires such issues to be litigated in a court of law. Victims of the disaster must go into court and convince a jury (or judge) by a preponderance of the evidence that BP was guilty of gross negligence or willful misconduct. They must also document with sworn testimony their financial losses.

That’s what the rule of law requires.

Instead, what Obama did was effectively declare: “Well, I don’t like the law and I wish it had never been enacted because it is a bad law. I’m going to decree that the law will not apply in this case. I am summoning BP executives to my office and dictating what BP must do, beginning with the delivery of a down payment of $20 billion dollars in corporate money to a political commission that I am appointing. That commission will dole out money to victims of the oil spill based on criteria that I deem appropriate.”

Notice that there is no judicial process concerning how the loot is going to be distributed. That is how things are handled in a society based on the rule of men, a society based on dictatorship. The dictator simply dictates and the person being dictated to is expected to submit and obey.

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Jim Bunning , Welfare, and Atlas

Everyone knows that federal spending is out of control. The feds are spending $1.4 trillion more than what they’re collecting in taxes. And that’s just for this year...

So, Bunning blocks a welfare bill on the ground that the federal government shouldn’t be borrowing any more money. If it can’t afford to be providing the welfare, Bunning said, then it shouldn’t be spending more money.

The statist crowd went ballistic. The attacks were the standard ones whenever anyone objects to any welfare-state scheme: “He’s selfish, self-centered, and greedy. He hates the poor and loves the rich. He’s just grandstanding. The bill is only a small percentage of total spending and so it doesn’t make any difference in the larger scheme of things.”

But the statist reaction to Bunning’s move goes much deeper than that and is a perfect reflection of what the socialistic welfare state has done to the American people. Having been born and raised under the welfare state, American recipients of welfare largess, including those on Social Security, Medicare, Medicaid, unemployment, education grants, mortgage guarantees, and bailout and stimulus monies, honestly believe that they are entitled to continue receiving it for as long as they “need” the money...

This is what the welfare state has done to America. It has produced a real war among the American people — between those who produce and own their wealth and those who are trying to get their hands on other people’s money through the force of the state. The 19th-century French legislator Frederic Bastiat put it well when he indicated that under the welfare state, the government becomes a great fiction by which some people try to live at the expense of other people.

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Jacob Hornberger: Capitalism Has Not Failed

Suppose you were to give a one-question test in public schools across the country and, for that matter, to all graduates of U.S. public high schools: “True or False: The Great Depression was caused by the failure of America’s free-enterprise system.”

There can really be no doubt about what the answer would be. The vast majority of respondents would answer: True.

Yet, the correct answer is False. As Milton Friedman, Ludwig von Mises, Friedrich Hayek, Murray Rothbard, and others have documented so well, the Great Depression was caused by the Federal Reserve, America’s central bank, a federal institution that is antithetical to free enterprise...

Alas, the deception and delusion are not limited to the Great Depression.

Today, we might well be witnessing the death throes of America’s welfare state and warfare state. Everywhere you look, the entire statist system is in crisis or chaos.

Social Security, Medicare, Medicaid, Fannie Mae, Freddie Mac, FDIC, the drug war, Iraq, Afghanistan, the dollar, federal spending, the national debt, stimulus plans, foreign aid, nationalizations, corporate and banking bailouts, and on and on.

The whole welfare-warfare system is busted, broke, bankrupt. With each passing day, it gets worse and worse, as federal officials continue to double down their bets in the hopes that somehow the system is going to come out fine.

But notice what the statists are saying: That it’s not socialism or imperialism that have failed, it’s free enterprise!

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Health Care Solution: Do Nothing

The second-best solution for the health-care crisis? Do nothing.

Of course, that drives the interventionists crazy. “Do nothing?” they cry! “Don’t you realize that we’re in a crisis? We can’t afford to do nothing!”

What they fail to realize is a fundamental principle about interventionism: It produces more crises. Therefore, any new health-care intervention, whether termed “reform” or “modification” or “improvement” is only going to make things worse than they already are. New interventions will produce new and bigger crises, thereby producing calls for more “reform” in the future.

What ultimately happens is that as the crises and interventions grow in number and intensity, people get so frustrated that they end up supporting a complete government takeover of that particular segment of society. In fact, that’s already happening in the health-care debate...

That, of course, leads us to an opposing diagnosis — that it’s not freedom and free enterprise that have caused America’s health-care crisis but instead the socialism and interventionism that have infected every aspect of the health-care field...

Thus, the prescription is obvious: radical surgery by removing all of this cancerous material from the body politic. No reform. Simply an immediately repeal of Medicare, Medicaid, health-care and insurance regulations, and medical licensure. End all government involvement in health care. Given the positive power of the free market and the enormous resiliency of human beings, the body politic will immediately begin recovering.

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Four Arguments Against Socialism

The first argument against any socialist program, however, is the moral one — that it’s wrong to take what doesn’t belong to you. Moreover, the immorality of an act cannot be converted into something good or moral simply because the state is doing it on your behalf...

A second argument against any socialist program is that it just doesn’t work. Let me repeat that for emphasis: Socialism doesn’t work, not even when American politicians and bureaucrats are running it. It inevitably produces crises, which are then used as the excuse for more government intervention. Moreover, it is inordinately expensive, as Americans have discovered with Medicare, much to their dismay.

A third argument against any socialist program is that it destroys the independence, fortitude, strength, and moral fiber of the people. How can a people be strong and independent when they have become frightened, dependent wards of the government?...

A fourth argument against socialism is that it turns into a war in which everyone is doing his best to get into everyone else’s pocketbook, while doing everything he can to protect his own pocketbook from being plundered. As Frédéric Bastiat put it so well, under socialism the government becomes a great fiction by which everyone is trying to live at the expense of everyone else. How can a society survive when everyone is warring against everyone else?

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Socialism is Not Free

Socialists who proudly proclaim the great success of the socialistic welfare state, including Social Security and Medicare, block out of their minds the fact that socialist programs are not free. The federal government is not an independent fountain of wealth or even an independent business operating alongside private businesses in the marketplace. Instead, the government is an entity that gets its money by taxing the private sector.

In effect, there are two segments of society — the private sector and the public (or government) sector.

In order to accumulate wealth, people in the private sector must produce a good or service that other people are willing to pay for...

However, unlike the private sector the government doesn’t depend on the voluntary decisions of consumers for its money. It forces the private sector to pay for its goods and services by simply confiscating (taxing) the income or wealth of people in the private sector.

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A Free Market in Health Care

There is one reason why there is a health-care crisis in America: socialism and interventionism, both at the federal level and the state level. On the demand side, there are Medicare and Medicaid. On the supply side, there are regulations and occupational licensure of physicians and other health-care providers.

Yet, virtually all of the discussion about how to solve the health-care crisis takes place within well-defined parameters in which Medicare, Medicaid, regulation, and licensure are the given. The discussion then focuses on how to resolve the crisis within those parameters...

Socialism and interventionism are inherently incapable of working. No matter how much time and energy are put into solving the health care crisis, it won’t matter one iota as long as the reformers are operating within the parameters of socialism and interventionism. The results will be same, no matter what the reform: chaos and crisis, which will only produce the need for more reforms down the road...

The freer an economy, the wealthier the society will be, and the better off the poor will be. Conversely, the more socialistic and interventionist an economy, the poorer society will be, and the worse off the people at the bottom of the economic ladder will be...

There is but one solution to the health care crisis — the free market, which would entail a complete separation of health care and the state, in the same way that our ancestors separated church and state.

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Abolish the Fed?

Why Not Abolish the Fed?
Jacob Hornberger

Both Milton Friedman and Friedrich Hayek called for the abolition of the Fed during their careers. While Friedman spent much of his life advocating externally imposed constraints on the Fed’s power to expand the money supply, his first wish was to have the Fed abolished, as he pointed out in a 1995 Reason magazine interview. In his book Denationalisation of Money: An Analysis of the Theory and Practise of Concurrent Currencies, Hayek advocated a free-market monetary system of competing currencies.

Most Americans probably still believe that the Great Depression was caused by “the failure of the free-enterprise system.” It is a false belief. The truth is that the worst economic disaster in American history was caused by the Federal Reserve. Give current Fed Chairman Ben Bernanke credit for publicly acknowledging that fact in a speech delivered in 2002 commemorating Friedman’s 90th birthday...

As Friedman and Hayek and other free-market economists (most notably Ludwig von Mises) pointed out, the Federal Reserve is the prime destroyer of currency and, therefore, one of the greatest threats to the freedom and well-being of a citizenry. As the monetary crisis facing our country continues to worsen, it’s important that we keep in mind that there is only one long-term solution — the one advocated by people such as Republican presidential candidate Ron Paul and Nobel Laureates Milton Friedman and Friedrich Hayek: Abolish the Fed.

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