WatchI was just listening to an NPR show discussing Ron Paul supporters who cheered at the idea of letting people without health insurance die.
One of the points that came up on the NPR show is that the Democrats do not have a coherent message on the proper role of government.
Republicans do have a coherent message. They want the law of karma to function: you should reap what you sow. You should not reap what other people sow. They love Aesop's fable of the ant and the grasshopper. The ant works hard, the grasshopper does not. Then winter comes and the grasshopper starves to death. Republicans want the grasshopper to starve, and that's why Ron Paul supporters cheered at the idea of letting someone die. They do not want the ant to be forced to share with the grasshopper, ever.
So government's role, in the Republican view, should be pretty much limited to protection of individual property -- but there is a very important and always unspoken addendum: no matter how that property was acquired.
The very rich absolutely love this idea of never having to share no matter how they got their money, and so rich Republicans generously fund campaigns which appeal to poor and racist Republicans who fear having to share with minorities.
Democrats, in contrast, want to "promote the general welfare" of the country, as is explicitly written into the constitution. Their assumption is that we are all in the same boat, and we have responsibilities to each other. But then it gets very hazy. Exactly what are these responsibilities to each other, and who is going to pay for them?
Democrats, just like Republicans, always and everywhere fail to distinguish between productive work and non-productive extraction of economic rents.
Rent does not just mean rent paid to a landlord. Interest is also the rent paid on borrowed money. The point is that "rent" here means money you get merely by being the owner of something, not from doing productive work. It means money that you could "earn" even if you were in a coma, taking it by law from people who actually did the work.
The difference is not always obvious. When you literally pay rent to a landlord, which is it? Is it reward for the landlord's productive work, or is the landlord just leeching off the tenant?
The answer is both. The construction and maintenance of the building is productive work, and should be rewarded with a certain amount of rent. But the payment of the rest of the rent for the use of the land is completely non-productive. No one created the land. The landlord merely uses his ownership title, without work, to extract money from productive people.
So back to the proper role of government. Should the ant have to feed the grasshopper in the winter?
To answer that, you need to ask one more question: Did the ant get his money from his own work, or from rents?
Money from his own work should belong to the ant. But money from rents should be heavily taxed and used to benefit the society the rent was extracted from. This is the idea behind Georgism.
Finally, back to health insurance. Should the person who refuses to buy health insurance be allowed to die? The answer is that non-productive rent income should be heavily taxed and used to fund universal critical care coverage for every citizen, like other countries already have. So there would be no people without critical-care coverage and the issue would not arise.
The ants would have no basis for complaint, because the health insurance money would not come from any productive work which they did themselves, and they themselves would be entitled to the same coverage.
So the role of government should be the protection of individual property acquired through productive work, and the promotion of the general welfare via revenue from taxes on non-productive rent-seeking.
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Santa Cruz, CA
If you say that the government must protect individual property, you are of course correct: the constitution says that very clearly.
Yet you also support the government taking money that belongs to others to pay for the mistakes of other people.
The analogy of people being "allowed to die" is false. Before the giant government creation of the welfare state, there were charities that cared for the indigent, including medical care.
Now the government has forced ME to contribute to charity without my consent.
If I got my money from work or rent is irrelevant. It is absurd to make this distinction, since someone somewhere had to work to save money to buy the very thing that produces "rent".
Should your grandparents and parents be allowed to save their money and pass it on to their grandchildren and children without it being stolen by the government to buy milk and pay rents for the deadbeat single mothers who did nothing to earn any of it except spread their legs?
Your parents should be able to give you everything they wish to without any of it being stolen by the government which simply creates more need by rewarding irresponsible, stupid behavior.
I have heard this "no health insurance" nonsense for years. I see the same illegal alien guys you do pushing huge HDTVs out of costco and yet they never have health insurance, but you bet your ass they have stashed $20,000 cash in their apartments.
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Patrick says
They might believe it, but they offer nothing in the way of government to ensure it.
A CEO who rapes and bankrupts a corporation and bails out with $100 million is a "job creator" to Republicans. They will do nothing to hinder this scenario and will actually do whatever they can to make it easier to accomplish.
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It's sad how this simple philosophy of Georgism is so obscure.
I try to pound on it online in other places.
I call myself a left-libertarian and would like to think minarchy would work in the real world if the rent-seeking was kept in check via LVT etc.
The rents being extracted from labor -- health care, real estate, consumer finance -- is several trillion, maybe $20,000 per household.
On top of that is the $600B/yr trade deficit and the $900B/yr defense waste, money that could be actively invested in social goods like transportation or decent alternatives to iwogian rental empires.
To put things in proper perspective, a mere $100B/yr spent on reasonable "public" housing -- $150,000 per unit of construction costs -- would fund 600,000 units a year. Alameda County's share of that would be 3000 new units, every year.
I believe Finland and Sweden have this quality of public housing. We tried it of course, and fucked it up forever I guess.
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clambo says
Actually, it does not.
http://www.dailypaul.com/128188/the-constitution-does-not-protect-our-property
clambo says
No, I'm saying the proper object of taxation should be non-productive income, not income from actual productive work.
Also, nowhere do I say anyone should pay for anyone else's mistake.
clambo says
No, care for the indigent was the exception rather than the rule. That's a fact.
clambo says
No, that's the one and only issue that really matters.
clambo says
The point is that mere ownership of land in particular should not confer on you the privileges of hereditary aristocracy forever. The United States was founded exactly in opposition to hereditary aristocracy.
clambo says
Please re-read bit about poor racist Republicans in original thread.
clambo says
If they earned it themselves, great! If they took it from other people, that's not so great.
Every time I see a Hispanic guy in California, he's working hard doing something physical to provide for his family. I have deep respect for those guys. They came here to really work and make a better life. They are far more American than you are, because you feel entitled to the fruit of other people's labor.
You are the grasshopper that demands the hardworking ant share with you.
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Patrick says
Speaking of Founding Fathers, both Jefferson and Paine has good stuff on this.
Paine of course is the leading light of Georgism with his Agrarian Justice.
Jefferson made the important comment (on France) how when there's unemployment and unused land there was a great crime against humanity.
This can be extended quite easily to see how when there's rent-seeking in land from a shortage of livable land, and mass poverty, there's also a great crime.
“Behind every great fortune lies a great crime” can generally refer to successful rent-seeking and other monopolistic behavior, not some great captain of entrepreneurship.
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Bellingham Bill says
See the thing is, guys like Romney & Blankfein, think they are great capitalists. They would NEVER admit that they are middlemen and parasites on real productivity.
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Patrick says
Couldn't agree more. One addendum: The government should do as much of the rent-seeking itself rather than letting individuals monopolizing the rent-seeking opportunities, which are often acquired by pure luck.
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I think that promoting the general welfare is fine, but lets do it right. If you think you can increase your "income" by having 12 kids, that is wrong, after lets say 3 you should be cut off from any additional funds, perhaps even surgically altered to not be able to reproduce. And if you are on welfare you should be drug tested regularly and randomly. I am, and I have to work for my money. If you piss dirty, you're out of the system. And you should only be able to buy specific foods with high nutritional value and certain necessities like toiler paper with any public assistance. I don't appreciate that united states tax money eventually goes towards newports and st. ides thanks to the crooked bodega on the corner.
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woppa says
$3T in rents being extracted from the working class each year and you're most concerned about poor people buying smokes.
Get real.
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What does one have to do with the other? There are kids starving all over the world too, maybe we should all get off our computers and go feed the homeless.
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Fix the rent problem and everyone in the US would have all the free cigs they wanted.
It's really that big an issue here -- tens of thousands of dollars per household.
Global poverty is actually a different class of problem. Our political system pretty much ends at our borders so other people are on their own.
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Patrick says
Perfect. No wonder we have it totally bass-ackwards.
Government protects non-productive rent seeking and takes taxes on the productive work. If Govt. was really protecting general welfare, we wouldn't have the massive wealth inequality we have today. So essentially, the Govt. we have today is doing a piss-poor job.
iwog says
Iwog is correct. Republicans will completely destroy the society by giving tax cuts to the 1%.
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People have been trying to figure out the role of government for thousands of years. We'll still be trying thousands of years from now.
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Patrick says
Basic self protection says since there are more grasshoppers than ants the grasshoppers will take/do what they need to survive. The analogy to humans is far from perfect but does have some cogent correlations. The human ants have much more power and are well organized. The human grasshoppers are weak, poorly organized but have proven that in vast numbers they can ravage the land. The clever human ants give the grasshoppers enough to keep them quiet and living their lives in the belief that they have the possibility to be ants some day, a small few are allowed to become ants. Such clever human ants can live quiet, splendid lives of plenty. The ideologically driven human ants say, "don't give those lazy ass, welfare suckin, food stamp eatin grasshoppers anything, those grasshoppers deserve natures fate." Those human ants eventually end up with their heads on pikes.
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Being a Landlord is LABOR INTENSIVE compared to a NOTE HOLDER. Will this easy money be taxed even HIGHER due to less sweat ? MAINTENANCE FREE INCOME is what motivates the FREE world, less the word RETIREMENT escapes the english language as does Schadenfreude.
Do you A+ students feel bad for the C- students ?
Did you offer to split your accomplishment ?
Mother Nature is a bitch. Every person on earth will be dead in about a century.
We can't save ANY. In the meantime, Hopefully we will teach them to feed & care for their own.
Visit your local welfare office & view the children being educated about how to earn money in many neighborhoods.
At the grocery store a woman is told she can not pay for Dog Food with food stamps. She replies Fine, Runs to the back of the store then returns with some beef and says, "My Dog will eat STEAK then".
One guy's idea screws it up for everyone.
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Patrick says
So how do you get people to lend money without paying interest? Please explain how you Patrick personally would live your life from beginning to end without borrowing money once.
Rent and interest income are taxed already so I don't understand the point of your entire post. Are you saying taxes on rent and interest income should be the only source of tax collected? If the government took 3.5 trillion dollars in taxes from interest and rent income there would be no economy of any kind in America. Are you and BB really that much of ideologues that you refuse to look at how the economy functions in the real world?
I'm still waiting after many requests for someone to show me a real world economy based on georgism. If it works so well why hasn't any country adopted it? Why can't anyone show it actually works? There must be some country somewhere that wants to have it's society prosper and flourish by throwing of the yoke of renterism. Communism, socialism, all the other isms based on envy at least got tried and failed.
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TMAC54 says
Half true!
There is real work involved, and the income from that part of the rent should be completely UNTAXED.
But the mere ownership of land takes no work at all, and that part of the rent should be HIGHLY TAXED.
If we distinguish between the two kinds of income, then we can really solve our problems.
bob2356 says
A real Georgist would also make interest income entirely untaxed. They think there should be a single tax -- the tax on land values. Period. All else would go untaxed.
I think that all forms of trying to be the grasshopper and take from the ant should be highly taxed. So I'd say interest income, being taken from the work of other people, should be highly taxed.
Not 100% mind you, but pretty high, maybe 50%. People will still definitely lend to worthwhile projects, because it still comes down to how much they can make by lending. Warren Buffett himself claims that higher tax rates on the rich do not discourage investment and growth. No one ever turned down a good investment because of the impact on his tax rate.
bob2356 says
The main impediment is that the very rich stand to lose a lot of unearned income. So they absolutely hate the idea.
Also, it makes people feel insecure about their land. So there is a psychological barrier, like "What?! I'd have to pay all my tax via property tax? No way!" But maybe combined with some strictly limited Prop 13-type caps, then they'd feel secure enough to go for it.
Prop 13 of course was a huge disaster, being the main tax-evasion vehicle for businesses, which never die, and so their tax rate effectively goes to zero as inflation raises land prices. Prop 13 has also accumulated exemptions to rate-resetting, like passing your ultra-low tax rate onto your descendants forever, as a hereditary aristocracy once again. But if those GIAGANTIC loopholes could be squashed, a high but limited land value tax might work to replace all other taxes.
Georgism was very popular in the 1880's or so, but that movement got completely overshadowed by militant communism.
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uomo_senza_nome says
Yes, our tax laws are about as bad as they possibly could be right now.
The 1% got control of the tax laws and drove the whole country into a ditch.
Why should someone who really does something valuable and gets paid for it (think talented surgeon) pay the MAXIMUM tax rate of 35% (high income from work), while someone who does nothing whatsoever but be born rich pay the MINIMUM tax rate of 15% (capital gains)?
Actually, Mitt Romney somehow paid even less than that.
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Agree that the tax code is overwhelmingly in favor of those with extreme wealth. The low capital gains tax rate is more bothersome to me. I also agree that it would be a very depressing place if all land / homes / apartments were owned by the mega rich or by corporations.
However, I just don't like the idea of taxing only property because most people owning land would either develop it into high rise dwellings or industrial plants to maximize profit. Gross. I like undeveloped land and open spaces. It keeps humankind more human.
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artistsoul says
If you like undeveloped land and open spaces, then you should also like increased population density in the cities. They are two sides of the same coin. And I think both increased city density and decreased rural density are inevitable as we run out of oil anyway.
The only thing Georgism would change about land usage would be to make it unprofitable to speculate in land.
So what's not to like?
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Patrick says
So very true. Those guys work their asses off so that the rest of us can have a nice cheap consumer society.
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artistsoul says
um, (as Patrick said above) incenting people to build UP instead of OUT actually creates more open spaces.
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TMAC54 says
so is being a bank robber or meth dealer.
The true measure of an occupation is how much wealth you create, preserve, or restore.
Cashing rent checks is only tangentially related to that.
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Patrick says
actually it was a bit more complex than that. The Progressive movement began fracturing under Wilson and the country became more conservative after the great Republican split of 1912 and the parties began realignment.
After the war we went through a laissez-faire boom, thanks to being minimally damaged by the war and having profited massively by supplying the belligerents. Plus technology was really advancing like gangbusters -- automobiles, radio, telephone, media, medicine, agriculture etc etc -- all this new wealth was increasing productivity in all areas.
Then the system flew apart in 1928-30 and third-way georgism got submerged beneath the battle between state capitalism and state socialism of the 1930s and 1940s.
Georgism did inform a lot of mid-century land reform movements, like Taiwan, Japan, HK, etc. Vietnam, too, in the early 1970s.
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Bellingham Bill says
Good point. If you create wealth, you should also not have wealth you create stolen by the Federal Reserve's money-printing.
Inflation punishes savers and rewards debtors. Exactly ass-backwards again.
I'm totally in favor of a currency based on silver or gold. In fact, I think the currency should BE silver or gold by weight. Forget "dollars". Think "ounces". And I think silver is better for everyday use, like it was used for centuries.
Of course this takes away power from certain groups that really like power:
1. The gov't likes the power to slowly default on its debt through inflation.
2. Banks like the ability of the Federal Reserve to bail them out via money-printing, which is going on right now, big-time.
Not that all credit problems would go away with silver money. You could still have governments and banks promising to pay silver they don't really have. That's a credit problem. But at least it would put a lid on exactly how bad they could be if they didn't have the Fed just creating arbitary amounts of credit.
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Bellingham Bill says
But to be fair, landlords actually do provide a useful service when they do the actual work of renting out and maintaining property.
I think that useful work should be completely untaxed. Just the land-ownership premium should be taxed. Maybe their overall tax rate would be the same.
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Patrick says
Y100,000 face value / .96oz = $1333 in monetary value and $1660 in gold content.
I oughtta get me 100 of those and carry them to Japan with me when I move, and cash one a month for living expenses.
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The Yen is no longer linked to gold, right?
Is there any remaining convertable-to-gold-at-a-fixed-rate currency, or have they all been debased?
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Bellingham Bill says
OK, I happily stand corrected.
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Patrick says
None. All debased. Welcome to the age of competitive devaluation. Even the Swiss (the strongest fiat currency in the world) cannot resist it.
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I still don't get the draw of metallic standards. Yeah, they might avoid inflation, but high inflation is only one of many risks to economies.
The only countries that have ever had out of control inflation had deep problems that would have destroyed them had they been on a metallic standard too. The whole reason people lost faith in their currencies is because they lost faith in their governments.
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See the problem with GOLD BUGS is they start from a premise that all societies are programmed for death the moment they switch off the gold standard. That if only we would switch back, naturally our society would be immortal and ascendant. Gold=good, all-else=bad.
Rome used gold where's the Roman empire?
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Vicente says
Rome debased gold too Vincente ;).
Vicente says
Not quite. Sound money advocates start from the premise that humans are flawed and are prone to entropy and deterioration. Gold imposes the required honesty, but ONLY IF used correctly.
Vicente says
Nah, anybody who says that is an irrational gold bug. There are large sections of people like this, but not everyone who advocates sound money has this position.
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uomo_senza_nome says
True, but that's not the reason the Roman empire fell. To be more precise, it's not the reason why the Western Roman Empire fell. The Eastern Roman Empire didn't so much fall as it morphed into other political powers including the Byzantium Empire and as such doesn't have a clear ending like the western empire.
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uomo_senza_nome says
Rome had inflation irrespective of debasement. They also had the debasement as you note. They used other tricks as well, so there really is nothing NEW under the sun when it comes to chicanery and economic troubles.
Nations and economies wax and wane for a lot of reasons. Gold-bugs view GOLD as some kind of magic bullet. It is not, and the fixation on it reveals a lot about these sort of cultists.
Gold does not "impose the required honesty" it just sits there on a table, you could be a genocidal Austrian and it would not object. Plenty of dead cultures used gold, but unlike metal-worshippers I'm not willing to describe their dissolution as being solely due to a single factor.
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Patrick says
shrekgrinch says
From the video it is clear that the audience members were cheering letting a person die, but what isn't clear is for whom those audience members intended to vote. It just happens that Ron Paul was asked the question, but that does not imply that the audience members were supporting Paul. Perhaps some were and perhaps none were.
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Another word for "rent seeking" is "investment." You spend a large amount of capital right now in the hope of getting "free" income in the future. It's the time value of money.
That doesn't mean we shouldn't tax enormous fortunes, especially those that are inhereted. I'm not a fan of "trust fund babies." And there's definitely the danger of big money buying political power via bribery, campaign contributions, etc.
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Maybe the proper role of government is to keep a small minority of ultra-rich sociopaths from enslaving the rest of us? The trouble is, where do politicians get their money? From a small minority of ultra-rich sociopaths...