RUTHFULLY YOURS

Consider the biggest domestic problem facing the nation: metastasizing debt that promises to explode because of exponentially increasing entitlement spending. If the problem were simply a technical one, accountants could solve it. Look at the math: our debt has surpassed $15 trillion, over 100% of GDP, and absent entitlement reform will reach 344% of GDP by 2050. Spending on Medicare, Medicaid, Social Security, and Obamacare will devour 18% of GDP by 2050, consuming all federal tax revenues. Total federal spending is slated to consume one-half of GDP by 2056. These numbers point to a Greece-like collapse unless entitlement spending is reined in.

Likewise, simple math discredits the solution Obama presented in his State of the Union speech with generous helpings of class-warfare rhetoric. Obama wants to impose a 30% minimum tax on the “rich,” defined as those making over $1 million. The “rich,” however, simply do not have enough money to solve the ballooning debt and entitlement-spending problem––confiscating outright all the wealth of Forbes magazine’s richest 400 Americans would barely cover Obama’s 2011 deficit, let alone the cost of future entitlement spending. As for making the rich “pay their fair share,” reducing the deficit by raising taxes on the two top brackets would require preposterous tax rates of over 200% in 2050. Worse yet, raising the capital gains tax, which Obama’s minimum tax on millionaires perforce would do, constitutes what Larry Kudlow calls a “tax on seed corn,” one that would reduce the amount of capital needed for investment and economic growth. Finally, the sorry record of tax increases disconnected from spending reductions should make us all chary of giving more money to a spendthrift federal government that has increased spending per capita 166% since 1965. Simple math points us to the only solution: cut entitlement spending and reduce deficits to more manageable levels.

But of course, the problem isn’t about math and how to balance the books. The conflict is one of differing visions of the federal government’s role in achieving certain contested ends. Obama claims a solution to our economic crisis demands that the rich pay their “fair share,” and we create an economy in which “everyone gets a fair shot.” But what is “fair”? The Organization of Economic Cooperation and Development reports that the U.S. already has the most progressive tax system among industrialized economies. The top 10% of taxpayers in America pay 45% of all income taxes (personal income taxes and payroll taxes) but earn 33% of market income. In socialist heartthrob Sweden, by contrast, the top 10% pay a percentage of taxes equal to their income, 26.6%. Paying a greater share of taxes than one’s share of income might strike some people as more than “fair,” as would the simple fact that nearly half of Americans pay no personal income tax, while the top 10% pays 70%. But Obama has a different set of values and a different vision of what ends the government should pursue.

The central progressive goal is the equality of result predicated on the assumption of radical egalitarianism, the notion that “those who are equal in any respect are equal in all respects,” as Aristotle put it. Inequalities that do exist reflect unjust social, political, and economic structures, which require correction by government intervention. “Fairness,” then, means redistributing income to achieve an equal outcome, and this in turn means taking money from those who benefit from unjust social, political, and economic advantages, and giving it to those less fortunate.

That progressive ideal, which has dominated the federal government for the last eight decades, has lead to the fiscal catastrophe waiting down the road: a simple lack of money to pay for all the redistributions of income intended to correct the alleged injustices of free-market capitalism. Worse yet, this obsession with equalizing outcomes stands in stark contrast to the fundamental assumptions of America’s founding: that people should be free to manage their lives and pursue happiness commensurate with their characters, beliefs, efforts, and talents. And they should be free to do so without interference from despotic government technocrats who think they have the superior knowledge and social engineering techniques that can create an outcome superior to, and more just than, what the efforts of free people can achieve.

Moreover, such administrative despotism, seeking to provide all with equal access to the material goods of life that constitute “happiness,” must redefine these goods as “rights,” which then makes them the business of government. This is what Franklin Roosevelt did in 1944 when he announced his “second Bill of Rights,” which included things like a “useful and remunerative job,” a “decent home,”  “adequate medical care,” and a “good education.” But as Paul Rahe comments in his indispensable Soft Despotism, Democracy’s Drift, Roosevelt’s vision––which as Rahe notes, “now serves as an extralegal standard by which our government and its policies are judged”––contradicts the essential ideas of the founding, particularly individual liberty. “These good things,” Rahe writes of Roosevelt’s catalogue, “were not items to which anyone was simply entitled; they had to be earned, and with the earning came a certain dignity and pride. Moreover, it was up to individuals, acting on their own behalf, to determine for themselves what ‘happiness’ meant. Liberty consisted to a considerable degree in taking responsibility for one’s own well-being and for that of one’s family. It was in possessing this liberty and in being saddled with this responsibility that men were deemed equal, and it was their possession of this liberty and the allocation to them of this responsibility that government was established to protect.” As we have seen for half a century, making these goods “rights” that the government uses its power to provide will have a destructive effect on that self-responsibility and autonomy lying at the heart of personal liberty. As Alexis de Tocqueville wrote, “Every measure which establishes legal charity on a permanent basis and gives to it an administrative form creates thereby a class unproductive and idle, living at the expense of the class which is industrious and given to work.”

Conservatives believe passionately in our foundational principles, particularly individual freedom and responsibility, whereas progressives believe passionately that those principles are outmoded, unjust, and inequitable, and thus in need of correction. But there’s a difference: conservatives have the evidence of history, the Constitution, and simple math on their side. For many progressives, on the other hand, this belief in radical egalitarianism created by the coercive power of government is not so much rational and empirical as metaphysical, part of a larger narrative that defines who they are and gives their life meaning. Thus the conflict between these two radically different visions of human life and government’s legitimate purpose and goals is necessarily going to be harsh, even brutal, as Obama’s divisive class-warfare rhetoric and demonizing of the “rich” show. But conservatives have the better argument. Starting soon the Republicans need to start making a case based on history, the Constitution, and math that Obama’s and the Democrats’ redistributive egalitarian politics is taking this country down the road not just to fiscal ruin, but to the further constriction of our freedom.

Freedom Center pamphlets now available on Kindle: Click here.