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Government Stimulus January 25, 2008

Posted by federalist in Taxation.

Our government has all the moral authority of a gang of bandits.  They produce nothing, yet every year they storm into the estates of the productive and take whatever they see fit.  Their authority stems not from just principles but rather from their numbers and the coercive force they wield.

Imagine you build up a productive estate for yourself and your family.  Every year the bandits come and tax you whatever amount they want.  If you protest, they point out that this is only fair — after all, brigandry is hard work, and they protect you from other bandits!  But that’s not all: A lot of the gangsters are sick, elderly, or lazy, and it would be inhumane for you to not share your abundance with those.  Furthermore, you’re welcome to join the mob, where you will have a voice just like every other bandit.  And after they’ve tallied up the plunder they give a little bit back to you and call it your “fair share” of your estate.  Heck, some people get back more than is taken from them.  So you see, it is all perfectly legitimate.

One year they notice the plunder getting a little light.  Their leaders begin to passionately address this shortfall.  They sit around your table, eating your food, and talking of ways to employ your assets to “stimulate” further production for them to plunder.  Your initial optimism wanes as you realize that they have no intention of taking less from you.  Instead they promise to take even more from you next year, and in the meantime they will borrow against that, add it to this year’s plunder, and somehow decide that this constitutes a “rebate.”

But don’t worry, this is all perfectly sound.  After all, some of that rebate might make its way back to you!



1. federalist - January 25, 2008

A Loyal Reader notes this blog on the same subject.

2. federalist - February 18, 2008

Arthur Laffer clarifies “That ‘Stimulus’ Nonsense.”

Ask yourself why not a $40,000 rebate per person, indexed for inflation of course, if a $600 rebate is so good. Heck, why don’t we give rebates equal to GDP, so that everyone who doesn’t work and doesn’t produce receives everything, and all those who do work and do produce receive nothing?

GDP would go to zero in a New York minute if workers and producers got nothing for their work effort. And, as fate will have it, any rebate will reduce output because it reduces incentives to produce output. The larger the rebate, the greater the reduction in the incentives to work and the greater the reduction in output. It’s as simple as that. This $170 billion rebate camouflaged as economic stimulus will deal a serious blow to the economic health of the country.

3. federalist - February 22, 2008

Looks like Lysander Spooner beat me to this analogy by over 140 years, and more eloquently at that. The highway robber looks virtuous by comparison with government in this telling:

The fact is that the government, like a highwayman, says to a man: Your money, or your life.” And many, if not most, taxes are paid under the compulsion of that threat.

The government does not, indeed, waylay a man in a lonely place, spring upon him from the roadside, and, holding a pistol [*13] to his head, proceed to rifle his pockets. But the robbery is none the less a robbery on that account; and it is far more dastardly and shameful.

The highwayman takes solely upon himself the responsibility, danger, and crime of his own act. He does not pretend that he has any rightful claim to your money, or that he intends to use it for your own benefit. He does not pretend to be anything but a robber. He has not acquired impudence enough to profess to be merely a “protector,” and that he takes men’s money against their will, merely to enable him to “protect” those infatuated travellers, who feel perfectly able to protect themselves, or do not appreciate his peculiar system of protection. He is too sensible a man to make such professions as these. Furthermore, having taken your money, he leaves you, as you wish him to do. He does not persist in following you on the road, against your will; assuming to be your rightful “sovereign,” on account of the “protection” he affords you. He does not keep “protecting” you, by commanding you to bow down and serve him; by requiring you to do this, and forbidding you to do that; by robbing you of more money as often as he finds it for his interest or pleasure to do so; and by branding you as a rebel, a traitor, and an enemy to your country, and shooting you down without mercy, if you dispute his authority, or resist his demands. He is too much of a gentleman to be guilty of such impostures, and insults, and villanies as these. In short, he does not, in addition to robbing you, attempt to make you either his dupe or his slave.

The proceedings of those robbers and murderers, who call themselves “the government,” are directly the opposite of these of the single highwayman.

In the first place, they do not, like him, make themselves individually known; or, consequently, take upon themselves personally the responsibility of their acts. On the contrary, they secretly (by secret ballot) designate some one of their number [*14] to commit the robbery in their behalf, while they keep themselves practically concealed. They say to the person thus designated:

Go to X, and say to him that “the government” has need of money to meet the expenses of protecting him and his property. If he presumes to say that he has never contracted with us to protect him, and that he wants none of our protection, say to him that that is our business, and not his; that we choose to protect him, whether he desires us to do so or not; and that we demand pay, too, for protecting him. If he dares to inquire who the individuals are, who have thus taken upon themselves the title of “the government,” and who assume to protect him, and demand payment of him, without his having ever made any contract with them, say to him that that, too, is our business, and not his; that we do not choose to make ourselves individually known to him; that we have secretly (by secret ballot) appointed you our agent to give him notice of our demands, and, if he complies with them, to give him, in our name, a receipt that will protect him against any similar demand for the present year. If he refuses to comply, seize and sell enough of his property to pay not only our demands, but all your own expenses and trouble beside. If he resists the seizure of his property, call upon the bystanders to help you (doubtless some of them will prove to be members of our band.) If, in defending his property, he should kill any of our band who are assisting you, capture him at all hazards; charge him (in one of our courts) with murder; convict him, and hang him. If he should call upon his neighbors, or any others who, like him, may be disposed to resist our demands, and they should come in large numbers to his assistance, cry out that they are all rebels and traitors; that “our country” is in danger; call upon the commander of our hired murderers; tell him to quell the rebellion and “save the country,” cost what it may. Tell him to kill all who resist, though they should be hundreds of thousands; and thus strike terror into all others similarly disposed. See that the work of murder is thoroughly done; that we may have no further trouble of this kind hereafter. When these traitors shall have thus been taught our strength and our determination, they will be good loyal citizens for many years, and pay their taxes without a why or a wherefore.

4. federalist - March 18, 2008

Of Bismark’s Germany, Rose Wilder Lane said:

For the first time in Germany history, the Prince did not say, Eat straw. Very kindly he said, Give me your money and I will give you back some of it when I think you need it.
This was a vast improvement. Naturally the Germans liked it. Anyone would, who knew no better.

5. federalist - August 6, 2008

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