Hubris, The Basis of Big Government Spending

Federal government spending problems are based entirely on hubris in government. In the US, our massive entitlement spending and huge regulatory structure is based on the idea that government experts can make decisions for people better than people can make decisions for themselves.

The morality of the government “taking care” of everyone is questionable.  It’s a given that some people are mentally unable to make their own decisions, it’s appropriate that a responsible person or institution be appointed by a local court to take care of them.  It’s not appropriate for a federal government bureaucracy to decide whole classes of people are unable to take care of themselves.  It’s even worse for the federal government to offer cash rewards if you give up taking care of yourself and let them take care of you instead.  When the federal government is taking care of you, you have to do what they tell you to do.  That includes voting for the people who take care of you, or they will stop doing it.

The faith of liberals in the purity of federal government workers’ motives has always astonished and amused me in its total naivete.   The people from the government will have the best of motives, while the evil private sector workers will not, according to liberals.  These judgements are never connected with the career paths of actual people who move between government and private sector jobs through the “revolving door” everyone complains about.  It also seems to be some miracle, a weird kind of transubstantiation, that people stop being people and become selfless saints once they start working for the government.

Computers have lead the government knows best crowd to argue that the government can use computers to collect all the information they need to run things, including large complex things like whole sectors of the economy.  Voters should notice that the government does not do computers very well. The Obamacare roll out is just one in a long line of technology flops. The Office of Personnel Management got hacked for 20 million personnel records because they did not have up to date security. Background checks for military, FBI and CIA personnel were stolen including finger print records.

If you're old enough to remember the $600 toilet seats the Pentagon was buying in the 1980's, you should notice that the problem was government using obsolete computer technology. The printers used to print parts lists could not print very wide reports. So the reports never had a part description and a price on the same page.

We need to cut government spending. We need to notice that government does not have the competence to run the things it’s supposed to be doing right now. There is no way the federal government can take on anything more.  We need to stop the idiots who think government should do more.  It’s clear from the results that the federal government can’t do any more.

Earl Simon De Montfort Defends and Expands Magna Carta Rights in 1265

King John had been forced to sign the Magna Carta, but his son, Henry III, pretended it didn't exist. Simon De Montfort, the French born Earl of Leicester who was also married to the king's sister, lead a revolt to confirm and expand the rights in the Magna Carta. De Montfort reached out to commoners to help defeat Henry III, while the king bribed barons with confiscated land to switch sides. The revolt ironically became a rising of commoners against all foreign born noblemen. In 1265, Simon De Montfort called the first English Parliament to include commoners. De Montfort was killed in battle later on in 1265. Henry III’s son, Edward I, made it a habit to call commoners to parliament in 1297. Without Simon De Montfort fighting for the Magna Carta, I don't think it would be considered as important a precedent as it is today. Prior to De Montfort's organized resistance to Henry III, the Magna Carta was a dead letter.

Our rights required defenders, and still do. Freedom is not free.

Article on Magna Carta (requires subscription)

http://www.wsj.com/articles/magna-carta-eight-centuries-of-liberty-1432912022#lf_comment=318079386

Economic Policy: What Should We Have Done In 2009?

Government spending does not stimulate the economy because government is far less efficient than private enterprise. Tax rate cuts would stimulate the economy because they would reward productive investment with a better rate of return and ultimately put more resources in private hands. The crash of 2007-2008 was due to over leveraging. To unwind it, a lot of debt needed to be converted into equity. A couple of changes would encourage that. First would be to lower the capital gains tax rate to encourage more equity investment. Another thing that would be to make dividends tax deductible to corporations, just as interest payments are. This would remove the bias in favor of debt financing for private firms. The way to prevent too big to fail banks is to force them to have bigger capital reserves than small enough to fail banks. Dodd-Frank could be replaced by a simple rule that says that if the bank is larger than 1% or 2% of the overall banking assets of the United States it needs to have a 10% capital reserve. To make this a little easier, the law could allow banks to sell a special class of bonds that are convertible to equity in the event of regular capital reserves falling to zero. Regular capital reserves for big banks could be 5%, with the additional 5% coming from the convertible bonds. None of the banks that failed or were bailed out would have needed federal help if their capital reserves were this high. Big banks will dismantle themselves quickly to get away from high reserve requirements and the problem will be solved. Republicans should remember who Wall Street backs with political contributions and do the right thing on requiring big reserves from big banks.

http://www.nationalreview.com/article/395775/debating-economics-james-c-capretta