In Forbes, John Tamny has written an OpEd about Justin Amash. In it he describes what he heard the Michigan Congressman say during a speech. He left the event feeling underwhelmed, and libertarians can understand why.
Some things Tammy said about Amash, and my own responses:
Never explained by the doomsayers of the past, and not covered by Amash in the present, is what would be so bad about a scenario whereby the federal government would have trouble covering its debts. On its face, this would bring about a positive in that the investors who buy U.S. debt would simply allocate their capital elsewhere; ideally away from government consumption.
Which is the way it should be in the first place. Government should be spending virtually nothing because it should be receiving virtually nothing. Let’s make a few exceptions for things like police, the court system and maybe an army that is genuinely used in a defensive capacity. Let’s even include the construction and maintenance of infrastructure. This is the minarchist view. If government truly takes in money (I’m being kind here) for these purposes and spends it only on these purposes, how much of a debt would there be?
How do you stop a government from racking up debt? By taking away their credit cards. As long as they have the ability to spend, they will spend. That is in government’s nature, generally. So for government to somehow be able to cover its debts, merely means they will start from scratch with the building up of new debt. Let those investors spend their money where it belongs: in the privatized market.
Here now comes one of the doozies that ‘libertarian’ Justin Amash allegedly alluded to:
For one, Amash referenced the eventual need for massive tax increases to pay off the deficits — absent spending reform. How odd, because if deficits are one’s worry, and they certainly are a concern for Amash, the last thing any deficit hawk would want to do is crash the economy with tax increases that would render far more difficult the federal government’s ability to pay them off. Seemingly lost on the congressman is that absent the economic productivity that has and continues to define the U.S., we not only would not have deficits, but the Treasuries already issued would be in freefall.
The mark of a statist, no matter how moderate he would like to appear, is that when push comes to shove, the bill will always end up being on the taxpayer’s plate. When government makes a mess, the statist will not only claim it definitely needs to be fixed, but that the costs are yours, the taxpayers, to pay for. Imagine if in real life, one individual makes a huge mess, and then tells another individual that it needs to be cleaned up, and that this other individual should also pay for that cleaning up. The first individual would be declared delusional. But the mark of the statist politician is that he thinks this is perfectly logical. This is the statist who claims that taxes need to be raised in order to clean up the government pigsty. Amash might say that spending reform could prevent that, but no libertarian would ever set any such conditions; they would refuse to make taxpayers foot the bill, period. No matter the consequences for government.
Also, what Tamny alludes to, is that the raising of taxes further causes distortions in the economy. Tax people more, and they will spend less money elsewhere, i.e. the economy. This is no more than common sense. Consumers may buy less; investors may invest less; employers may hire less or fire more. Raising taxes hurts the economy. Justin Amash doesn’t know, doesn’t care, or simply believes that an economically healthy government is ultimately more important than a healthy economy.
All of which leads us to what was most disappointing about Amash’s speech. The Michigan congressman regularly referenced his desire to pass a “balanced budget amendment.” Of course, missed by Amash is just how inimical to limited government and mocking of the Constitution such an amendment would be…
…Americans are the most productive and entrepreneurial people on earth, intensely capable of creating jaw-dropping wealth. Because they are, and this is the sad part, they hand over trillions to the federal government each year…
…A balanced budget amendment would legalize the spending of all that we send to Washington.
In other words, as long as the budget is balanced, government can keep taking the fruits of the productive class’ labor and spend it until the cows come home. But there is nothing at all libertarian about that. It is not libertarian to merely prevent government from racking up debts. It is libertarian to make government spend as little as possible, preferably virtually nothing.
This isn’t the first time Justin Amash has taken the wrong side on this issue, by the way. He once before refused to take taxes off the table:
If someone brought a proposal that dealt substantially with entitlements, reforming them to ensure our government remains solvent in the long run, then we have to put everything on the table including taxes.
Government solvency ueber alles. Literally. He said everything has to be put on the table. This is not the language of a libertarian. This is the language of a statist.
(HT: Economic Policy Journal)