The debt hawks are to economics as the creationists are to biology. Those, who do not understand Monetary Sovereignty, do not understand economics. Cutting the federal deficit is the most ignorant and damaging step the federal government could take. It ranks ahead of the Hawley-Smoot Tariff.
When people become frustrated and angry, they seek a focus for their anger. Often a scapegoat will do. It doesn’t matter whether the scapegoat is the primary cause of their anger, so long as a quasi-logical case can be made for the scapegoat’s culpability.
Aliens are frequent scapegoats, because the quasi-logical cases can be made that they take jobs from citizens, commit crimes, don’t pay taxes, and will mongrelize the true patriotic mores and beliefs of our fair nation. Minority religions (Jews in Germany, Christians in Muslim nations) are frequent scapegoats for all the above reasons and for fears of proselytizing, whether these fears are invented or real.
Air travelers become angry at the airline personnel behind the desk, though these workers seldom are at fault for the travelers’ problems. We get angry at that customer support guy in India, who neither understands, nor has the power to cure, our problems, when the real fault may lie with the president of the company he represents.
Today, people are angry and frustrated by the recession and the slowness of recovery. The Tea Party has used this anger to finger-point at “big government.” Yes, some of our political leaders are at fault. The ignorance about Monetary Sovereignty, surely has exacerbated, if not outright caused, the recession.
But the United States is a huge country, which has a huge government, and not all elements of our “big government” should be eliminated. We need the army. We need the roads and bridges our big government builds. Shall we eliminate the Medicare and Social Security paid for by our government? (No, FICA doesn’t pay for these programs. See: Ten Reasons to Eliminate FICA,) Shall we eliminate food inspection, drug inspection, weather forecasting, the Coast Guard, the FBI, the CIA, Homeland Security, the FDIC to insure our deposits or the SEC to supervise investing? Shall we eliminate the police and the fire department? Shall we eliminate all laws? There are more than 1,000 federal agencies and a thousand times that number of state and local agenies. Shall we eliminate them all, or just some of them, and if some of them, which?
Most rational people understand the need for a big country to have a big government. But for personal gain, the political parties have tapped into the irrational part of our psyches, and have condemned all federal initiatives as taking away our “freedoms.”
Yes, laws take away freedoms. You are not free to steal, murder, rape and pillage. To have a viable society, we give up many freedoms. It’s the tradeoff most of us willingly make.
Now, there are those who wish to eliminate the new health insurance program in its entirety. Why? Some say it is because of the requirement that everyone have health insurance. If you already have health insurance, this requirement doesn’t affect you. If you are poor or don’t have insurance because of a pre-existing condition, it doesn’t affect you, either. In fact, it affects only those few who either are so wealthy they can afford to be self insuring, or those who plan to cheat their doctor and hospital, when they need medical help. If you’re not in one of those two groups, you have no problem.
Or, are you merely standing on the principle that all government is bad, and whenever you see government you want to eliminate it? Is this vague, anarchist principle so powerful it overrides the needs of America’s millions who are too poor to afford health care insurance? Does your anarchist principle override the needs of Americans whose existing illness prevents them from obtaining insurance? Does your anarchist principle override the needs of Americans who lose their insurance because they have lost their jobs?
The “I-don’t-like-big-government” screamers really are saying, “I have mine and I don’t give a damn about anyone else. I want the freedom to do whatever I want, and the hell with you.” How ironic that these selfish “freedom only for me” people actually portray themselves as patriots and fly the flag at every opportunity. Some patriots they are.
Yes, like any organization, large or small, our government has good points and bad points. But to take out your spite on the health care law – to throw out the baby with the bathwater – is selfish, un-American and misguided. Anarchy is ugly.
Rodger Malcolm Mitchell
No nation can tax itself into prosperity, nor grow without money growth.
22 thoughts on “–Big government is bad. It takes our freedoms. Let’s eliminate it.”
Here is where a lot of it is coming from:
Murray Rothbard, The Anatomy of the State
I tend to think even those well off selfish ones crying for a smaller govt, often don’t fully appreciate how many govt provided services they rely on for their standard of living.
The Rothbard article gets into an area I consistently find troubling. I call it “philosophical economics.” It contains few if any data. It’s a philosophical “I-think, you-think” piece ala Freud or Marx, but with even less data.
I am dismayed by the mixing of philosophy, psychology and economics, just as I would be dismayed about mixing philosophy and psychology with any other “hard” science; astronomy, physics, chemistry et al.
The success, or lack of it, of Marxian, Keynesian or even the philosophical parts of MMT trouble me. Belief is not evidence is not science.
I may write a post on this subject.
Rodger Malcolm Mitchell
Ralph, this is the concern. Murray Rothbard is an icon of Libertarianism, along with Ayn Rand, both of whom I would count as crackpot philosophers, psychologists, and economists. MR is waaay out there. He even wants to privatize the seas. Both of them are widely read nowadays, and a lot of people are confusing imagination with reality as a result.
From Thornton Parker,
Rodger, This is an excellent essay. For what it is worth, I agree completely. Tip Parker
Could you please name names regarding: “Now, there are those who wish to eliminate the new health insurance program in its entirety.” Otherwise it is just a straw man. Like everything I’m sure there a few crazies. However, to the best of my knowledge neither of our political parties wishes to just eliminate it. A large percentage of the GOP wishes to replace it with something better. Yet to be proven of course. There is a difference though.
Are the 750 waiver out of Obamacare eliminating health care coverage for their union members and employees?
” A large percentage of the GOP wishes to replace it with something better. Yet to be proven of course. There is a difference though.”
Yet to be stated.
How do you get to universal coverage using private insurance without a universal mandate?
Or is “something better” not universal coverage?
Fair enough Tom. I am not well versed enough on the GOP proposal as it sits now and what it may be in real life circa 2012/2013. I will admit that it is less likely that it would be as universal as the DEM solution that is hated. Even though it claims universal in its titles.
This is speculative at this point. What isn’t speculative is that after 6 months and literally advertising campaigns and a government push, only 10,000 people have signed up for the high risk pools and that is a doubling of enrollments recently. 10,000 out of 310 million.
So this is a policy decision that needs to be hashed out. You and I may be on other sides of it. I personally wish that the whole employer based system would be gone.
Democrats have said that a universal mandate is not required for universal coverage through private insurance. The universal mandate was a sop to the insurance industry to get the votes. Something substantially the same can be done through incentives instead of a mandate, and if the GOP were actually interested in doing this, it could be handled with the time it takes to print it up. This plan is already worked out.
I said from the get-go that the universal mandate was a non-starter and that the Dems should never have allowed themselves to be sucked into it. So did Howard Dean. Vermont has universal coverage with no mandate, for instance.
You may be right Tom. I personally support Mosler’s idea. As I have said, the GOP will be punished if they don’t put something forward that the public views as better then the Dems.
If you go to the post titled, “Extra. Read all about it,” you will find this quote: “The bill introduced by Rep. Chris Smith (R-NJ) was the second major piece of legislation filed by the Republicans after its attempt to repeal ‘The Affordable Care Act. ‘Speaker of the House John Boehner (R-OH) hailed Smith’s bill as “one of our highest legislative priorities.”
Apparently, he didn’t get your message that a replacement bill should be one of his highest legislative priorities.
Come on, Matt, don’t be so naive. It’s pretty clear, that the Republican’s highest priority is to undo anything positive that Obama does and to try to win in 2012 — the country be damned.
And if by some miracle, the Republicans are sincere, it’s even more damning, because their objection primarily relates to cost, which demonstrates they don’t understand Monetary Sovereignty.
Rodger Malcolm Mitchell
Rodger no one understands Monetary Sovereignty. It is an Innocent Fraud that both parties are equally guilty of. Man are you disingenuous on this.
You’re just being a demagogue on this topic. Many, many people on both sides of the aisle think this is poor legislation. To claim the GOP just wants to undue anything “positive” Obama has done is also disingenuous. Stop being a demagogue. The GOP is supported by the people. http://www.realclearpolitics.com/epolls/other/obama_and_democrats_health_care_plan-1130.html
Its seems to me the naive one of us is the one who predicted the GOP would be crushed i the most recent election and ridiculed for a generation. That would be you.
Is it so hard to see that the two parties have a difference on this and that both may want to try and solve the issues in different ways? Is ti too hard to see that this is a complicated issue with no silver bullets? Why must you demonize people?
I’m curious. You say you don’t understand Monetary Sovereignty, yet you not only keep commenting on this site, which is devoted to Monetary Sovereignty, but continue to argue with those who do understand it. Very strange.
Anyway, I understand Monetary Sovereignty. You would too if you weren’t so ready to dispute what you don’t understand. Here is a quick, basic course in Monetary Sovereignty:
A Monetary Sovereign government has the unlimited ability to create money, constrained neither by borrowing nor by taxes, but only by inflation.
Understand the implications of that one sentence, and you will be way ahead of most economists and our political leaders. Give it a try.
Rodger Malcolm Mitchell
Well that clears it up. The point I was clearly trying to make is that neither party and 95% of the economists understand or believe in your theory or MMT. In fact it was ME that told you what MMT was and by using the phrase Innocent Fraud above I was actually directly referencing Mosler.
And yes I understand your theory is a bit different.
Here is where I tell you what MMT is AND where you show you don’t know much about politics yet you keep posting on these issues. Very strange.
April 2010. Who has been right Rodger? Who keeps repeating the same pablum? I keep arguing because I have been right. I mean read our original thread on this.
I agree that a single payer system ala Medicare for all, is best. When a state adopts a single payer system, it must find a way to pay for it. Taxes are the obvious option. If the federal government adopts Medicare for all, it will not need to increase taxes, since taxes do not pay for federal spending.
That’s why it’s a shame that Vermont is forced to do what the federal government should do.
Rodger Malcolm Mitchell
Thank you for telling me what MMT is. All this time I thought that back in 2005, when Randy Wray (after he read FREE MONEY, which I wrote 10 years ago) invited me to meet with him and speak at UMKC, that I learned about MMT.
Or perhaps I had thought it was my years of correspondence with Warren Mosler that did the trick.
Did you also educate Randy and Warren?
Yes, you are correct that 95% of economists and politicians either don’t understand or disagree with my beliefs. Were that not the case, I wouldn’t be writing this blog.
And don’t be so quick to thump your chest about the Republicans’ popularity in wanting to dump the health insurance plan. This play has several acts left to go, and the more they win, the more they will lose. I still feel good about the post I wrote last April, Republicans, where I said what the Republicans need to do to gain respect as a party. They won last fall on a wave of anger at the recession, but when the anger wanes, and reason takes over, the GOP better have a plan.
Rodger Malcolm Mitchell
Living in a country that does have universal health care (Australia), I find the resistance and arguments against the adoption of a similar system in the US bewildering, especially when they come from those who would benefit from it, ie. the vast majority of the population. The vested interests have clearly done a fantastic job of spreading FUD on this issue.
Right: Fear, Uncertainty, Doubt. The problem is that the people who should be spreading the truth — the worshiped university economics professors — are ignorant of basic economics.
They can describe every abstruse theory of macro/micro economics, but do not understand the very basis of economics, namely: A Monetarily Sovereign nation has the unlimited ability to create its sovereign currency, and this ability is limited only by inflation. Period.
So they spread all sorts of crap about the federal debt being “unsustainable” and a “ticking time bomb,” and they wring their hands over the meaningless Debt/GDP ratio, and they suicidally seek a “balanced budget.”
Who are the people to believe, if not the professors, the media and the politicians, all of whom tell the same harmful story?
Economics today is a disgrace.
Rodger Malcolm Mitchell
Thing is, they could argue for it using mainstream economics anyway, as it will cost less than the system used now.
All the other countries with universal, largely govt run systems are actually cheaper per capita, with better coverage and outcomes for the entire population. It’s the reason travel insurance is higher when going to the USA than any other major destination. http://www.visualeconomics.com/healthcare-costs-around-the-world_2010-03-01/
It does my head in that you wouldn’t want something cheaper and better. But I’m sure most Americans would if it could be explained to them properly, and I think you are right to condemn those getting in the way of this.
Apart from that, I should comment that our politicians and media have exactly the same obsession with govt spending and debt, possibly even more so. We’ve just had some severe weather events in our northern state of Queensland, causing many billions of dollars of damage, which will need to be funded by the federal govt. Thing is, much of the media talk has centered around how long these costs will delay the budget going back into surplus…, so much so, that the Prime Minister has announced a new temporary income tax INCREASE to “pay” for all the re-construction.
OK I agree with this last comment Rodger. See how easy that was. 😉 EXCEPT, isn’t there always an except with me, IMO the DEMs were slaughtered because of healthcare and the economy. Not just the economy.
To show how much I still love you Rodger, check this out from NPR. Even they are onto stuff that MMT folk routinely get ridiculed for.
At around 35 minutes they start going into how the Fed works. There is a part where they say that money is just created on a computer basically.
Thanks. And you might enjoy this recent radio interview of an economist who does understand the principles of Monetary Sovereignty: Radio Interview
Rodger Malcolm Mitchell