The French economist Frederic Bastiat might have summed up Tuesday’s election best when he said, “Government is the great fiction, through which everybody endeavors to live at the expense of everybody else.” After listening to politicians for nearly two years going on and on about how they are going to change the world when they are elected, I thought you might benefit by reading these truths before you vote on Tuesday.
The Government doesn’t produce anything. Everything the government does, from providing cops on the street, to paying teacher’s salaries, to building bridges and highways, is possible only because business enterprises and their employees produce value that is taxed. When a candidate tells you that the government is going to pay your mortgage, spend more on schools, or fix the healthcare system, they are telling you that they are going to raise your taxes. Winston Churchill once said, “I contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.”
Over time, a country cannot consume more than it produces. The gross domestic product of the United States of America (the economic pie) can grow at a sustained rate of only about 3% per year. If the “pie” can grow only at 3% per year, our nation’s consumption can grow no more than 3% per year, unless we borrow money from other countries to artificially create the illusion of prosperity. By the way, compounded annual growth rates of 3% will double the size of the economic pie every 23 years. It’s not bad to be able to double the prosperity of a nation every generation.
The prosperity of a nation or its people cannot be improved through redistribution of income “spreading the wealth”. George Bernard Shaw said, “A government which robs Peter to pay Paul can always depend on the support of Paul.” Wealth can be created only when people and businesses work harder and smarter to increase their productivity (output per man hour). When government taxes producers (businesses or workers) and redistributes the fruits of their labor to non-producers, this saps the incentives of both producers and non-producers to create additional output in the future. With less output the economic pie shrinks and everyone is worse off than before.
The right to Property is as sacred as the right to Life. It is tempting for politicians to say, “I’m not going to take away your life, your right to free speech, your right to freedom of assembly, or your right to practice your religion; all I want to do is raise your taxes and take a bit more of your property.” The problem is that we all trade our time to earn income and purchase property. Your time is your life; they are synonymous. When the government takes your money through taxation, it makes a claim on the time it took you to earn that money, and therefore it takes a part of your life. When your friends and acquaintances tell you that their support for politicians who will raise your taxes is “just a difference in political opinion”, tell them that they are dead wrong. Tell them that the forcible confiscation of your time and your life isn’t a simple a difference in opinion and that you’re damned upset about it!
Vote carefully on Tuesday. Remember the wise words of Thomas Jefferson when he said, “A government big enough to give you everything you want, is strong enough to take everything you have.”