Taxes, Spending, and the President’s plan

by Russ Roberts on September 21, 2011

in Debt and Deficits, Media

I discuss┬áthe President’s latest plan for the defict on On Point, NPR show out of Boston hosted by Tom Ashbrook. The counterpoint comes from David Osborne. It’s a lively discussion. Our part begins around the 20 minute mark and goes for about 40 minutes.

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SweetLiberty September 21, 2011 at 10:35 am

Osborne attempts to divert the discussion of Federal involvement in education by pointing out that only 7% of education costs are due to Federal spending (presumably through the Dept. of Education). The real cost is Federal support of teachers’ unions and the adherence to a government run monopoly which handicaps innovations in education. It’s not how much the Dept. of Education spends, it’s what they spend it on and the authority they wield that is the real problem.

SLAVE of THE STATE September 21, 2011 at 1:08 pm

They never count all the costs. It would be too too too ugly.

Scott G September 21, 2011 at 11:23 am

Dr. Roberts,

Your last bit in that segment was awesome! You had me laughing and cheering out loud.

The main downside to this format is that I can’t skip the first 20 minutes of the show, however I do have to say it was worth it, especially the big blows there at the end stating what government does poorly and that we should get government out of those areas. I think you stunned the other side with that. Had you gotten the last word in you would have refuted the Great Depression crap too.

I don’t know how you remain so calm and on task during these debates. I would lose my temper if I were in your shoes. Thanks again for another lesson in how to communicate with the government lovers.

Since I can’t go back and listen to certain parts of this show without listening to the whole thing it would be helpful to me if you could summarize your statements here regarding the taxing the rich issue. You made about three or four points there, conceded a little (but I don’t understand exactly why or where), and then pointed out that taxing the rich would hurt the poor and distort the market for capital. Can you briefly re-state your thoughts about that?


Scott G September 21, 2011 at 12:17 pm

I also liked that you called yourself a classical liberal. I feel like the name that one calls oneself is really important, and the terms libertarian, anarcho-capitalist, anarchist, libertarian-anarchist, and voluntarist don’t represent you as well as the term classical liberal. I’ve heard you call yourself a Smith-Hayekian on Econtalk, however since most people don’t know what that is I don’t think it’s a good thing to call yourself when discussing economics in front of a general audience, like the NPR audience.

The name classical liberal is the strongest and most robust name for people who are skeptical of government. There is ample evidence that government should be limited, and therefore when debating these topics, the name classical liberal leaves the fewest vulnerabilities for bigger government folks to attack.

Even thought I see a great deal of evidence that a complete absence of government would yield the best outcomes for people, I don’t see a problem in calling myself a classical liberal. I do feel uncomfortable calling myself a libertarian sometimes, mainly because many libertarians define themselves by the statement that individuals should be free to do anything that’s peaceful, or that anyone should be free to do anything he wants as long as he does not commit acts of force or fraud against any other peaceful person. That definition doesn’t completely satisfy me. It seems flimsy to me.

I have a feeling that you’re more skeptical of government than most classical liberals, and may believe that a complete absence of government would be best, however I believe that like me, you’re not always comfortable calling yourself a name that assumes that a complete absence of government is best. Am I correct?

ArrowSmith September 21, 2011 at 1:01 pm

Yes he is not comfortable admitting he’s a anarcho-libertarian Randist.

SLAVE of THE STATE September 21, 2011 at 1:11 pm

There are a lot of libertarians that are anarchists. I don’t know a single Objectivist that is anarchist. They are minarchists, as best I know.

vikingvista September 23, 2011 at 3:57 am

“classical liberal” and certainly “Smith-Hayekian” have some theoretical and historical economic implications not inherent in the other terms, which are more moral philosophic. It seems appropriate that an economist would choose a label that reflects some of his higher level economic concepts. “Voluntaryist” (and I don’t know if he is one) is intended to convey a very condensed and fundamental point of view.

Scott G September 24, 2011 at 2:03 am

I’m not sure what you mean when you say that classical liberalism has some theoretical implications where as the other terms are more moral philosophic. Maybe you could elaborate on that a little?

vikingvista September 24, 2011 at 4:27 pm

“Classical liberalism” is a widely used term that is most associated with the economic ideas of particular economists, like Smith, Ricardo, Hayek, and Friedman, with its central belief having to do with trade and markets (ostensibly free markets, but I would say freeER markets).

In contrast, “voluntaryism” is a term associated more with noneconomist libertarian philosphers, with its central belief having to do with how one person treats another. Any economic beliefs are derivative of that, and are not usually treated with the same economic rigor.

PrometheeFeu September 21, 2011 at 2:10 pm

Great job Russ! I have to say, I think you might have gone a little too far to get a fair hearing from NPR listeners, but everyone needs to hear this. As Robert Frank said in your recent podcast, when you have shown a market imperfection, you are not done. You then need to show why the government will make things better. Way too many people look at education, finance, the job markets etc, see something we can all agree is bad and immediately reach for the government. Very few people stop, think and ask themselves: “Am I going to make things better or worst here?” When you hold public office everything starts to look like a market failure.

Anotherphil September 22, 2011 at 8:59 am

“when you have shown a market imperfection, you are not done. You then need to show why the government will make things better.”

This should be on the Cafehayek masthead and drilled into every aspirant to government “service”.

veritasrex September 21, 2011 at 4:03 pm

Mr. Osborne, if we go back to the income tax rates under Clinton, can we get the dot com bubble with it too? I’d also like a side of lower spending as a % of GDP as well.

Methinks1776 September 21, 2011 at 6:30 pm

And the less aggressive regulatory environment and a government less threatening to liberty and capitalism.

Libtards love to fantasize about the Clinton era tax rates. When rates of return were as high as they were in the 1990′s, the effects of tax hikes are less noticeable. People become acutely aware of the drag only when a bubble bursts. The drag was always there, though.

ThomasL September 22, 2011 at 3:58 pm

Great stuff toward the end about schools (as emblematic of government). Well delivered.

Hate to say anything negative, but I think you came off a bit scattered earlier when talking about class warfare and taxes. You said some good things, but you jumped around so much it didn’t have much punch to it.

One thing that struck me about his show is how often, with callers and guests alike, one can agree with what they say, and disagree with their remedy.

You’ll have a caller say something like, “Social security it a train wreck, the politicians have been raiding it for years, I doubt I’ll ever get a cent out of it.” And I am nodding. And then they say, “Therefore we need to raise payroll taxes to fund it properly, raise taxes on the rich, and impose tariffs to keep jobs from going overseas.” I was with them until the “therefore”…

tef September 22, 2011 at 4:23 pm

Great job! I like your show and your website. Mr Osborne appeared to be a propagandist for the Democrats. You, on the other hand, were apolitical. I agree with Scott, how do you remain so calm in the face of spin and propaganda. Keep up the great work.

whotrustedus September 23, 2011 at 1:32 pm

I was expecting some discussion of the overlapping nature of corporate tax & capital gains/dividend taxes. Russ, i might have expected you to suggest at some point that comparing income/payroll taxes to capital gains/dividend taxes is not really apples to apples because dividends have already been taxed as corporate taxes. My understanding that part of the reason for the adjustment of capital gains & dividend tax rates in 2003 was to soften this discrepancy.

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