Ron Paul – The Revolution: A Manifesto – Page 77 through Page 83

Page 77: John Chubb discovered that the New York City public schools employed 6,000 bureaucrats. New York City’s private Catholic schools, with one-fifth as many students, employed 26 bureaucrats. Sometimes the position that the economy should be free is labeled as a “pro-business” position that favors the rich. This is an unfounded criticism. Big business is just as guilty as anybody else of using the government to obtain benefits for themselves.  This is obviously not to say that all or even most businessmen are devious, it is just to say that they are humans too and will try to seek benefits in the easiest way possible. Honest businessmen, however, are incredibly important to society. Entrepreneurs who take risks in order to bring new products to market which make our lives better are worthy of admiration.

Quote: “The entrepreneur who risks everything he has in order to realize a dream – and improve our lives in the process – is engaged in a worthy and honorable pursuit that earns him precious little respect in our society.”

Page 78: Burton Fulsom, an economic historian, points out that there are two types of entrepreneurs: market entrepreneurs and political entrepreneurs. One makes money in the marketplace while the other makes money through lobbying the government. The income tax is akin to the military draft. It is based on the belief that the government owns you and can decide how much of your property it wants to take. Robert Nozick, the famous political philosopher, saw no difference between the income tax and forced labor. He noted that the average citizen works for various governments about 6 months a year.

Quote: “The income tax implies the same thing: government owns you, and graciously allows you to keep whatever percentage of the fruits of your labor it chooses. Such an idea is incompatible with the principles of a free society.”

Page 79: There is not much political support for the abolition of the income tax. There are many other things that can be done to reduce the tax burden on Americans. Various proposals that Ron Paul has put forward include eliminating income tax on tips, granting tax credits for teachers, and exempting people with terminal illnesses from social security taxes. However, it is most important that the income tax be eliminated and replaced with nothing. Doing so would cut government revenue by about 40 percent.

Quote (Frank Chodorov): “The citizen is sovereign only when he can retain and enjoy the fruits if his labor. If the government has first claim on his property he must learn to genuflect before it. When the right of property is abrogated, all the other rights of the individual are undermined, and to speak of the sovereign citizen who has no absolute right of property is to talk nonsense. It is like saying that the slave is free because he is allowed to do anything he wants to do (even vote, if you wish) except to own what he produces.”

Page 80: Cutting the 2007 budget by 40 percent is not as radical as it seems. The 1997 budget was 40 percent smaller than the 2007 budget. It is really not radical at all to imagine living under the 1997 federal government. The result of such a step would give the economy such a dramatic boost that is hard to even imagine the consequences. Before the income tax, the main source of revenue for the federal government was the tariff. Tariff revenue started to decrease as consumers came to view the tariff as unfair. It was seen as a way to protect big business from foreign competitors. At the same time, government expenditures were increasing due, in part, to a growing military budget. The income tax was passed a measure to force the rich to pay their fair share. Within a few years though, everybody, even the middle class, was paying higher income taxes than they ever expected. In the 1920’s the tariff was raised as well.

Page 81: Many politicians talk big about cutting taxes but few have the voting record to back up such claims. If taxes are going to be cut, and more economic freedom achieved, spending must also be cut. Otherwise, the deficit will continue to spiral out of control. As of 2007, taxpayers had to pay $1.4 billion per day in interest on government debt. Few understand the true nature of the earmark system. The system does get abused. However, cutting all earmarks would not necessarily reduce spending at all. The spending levels are voted on and agreed to before the earmarks are decided upon. Without earmarks, all funds would end up in the hands of federal bureaucrats. The system is terribly flawed, but at least earmarks help to appropriate some of the funds back to the communities who actually paid the taxes. In addition, the earmark spending is negligible when compared to overall spending by the federal government.

Quote: “In a flawed system, earmarks can at least allow residents of congressional districts to have a greater role in allocating federal funds – their tax dollars – than if the money is apportioned behind locked doors by bureaucrats.”

Page 82: Supporters of limited government need to understand that the earmark issue is trivial when compared to the other issues involved in cutting government spending. It is much more important to focus on the total spending in appropriations bills. Making serious cuts to the budget will be very difficult because so many Americans are completely dependent on federal programs. The reality of the situation is that we cannot afford to continue paying for so many expensive federal programs. The national debt does not even include unfunded liabilities for Medicare and Social Security. Those programs add an additional $50 trillion to the government’s debt. It will be impossible to raise enough taxes to pay for these liabilities. Demographic trends and rising healthcare costs make the problem inevitable. The proportion of young taxpayers to retirees is on the decline.

Quote: “If present trends continue, by 2040 the entire federal budget will be consumed by Social Security and Medicare. Forty percent of our entire private-sector output will need to go to just these two programs. The only options for balancing the budget would be cutting total federal spending by about 60 percent, or doubling federal taxes.”

Page 83: David Walker, comptroller general of the Government Accountability Office, says it will be impossible to grow our economy fast enough to keep up with the problem. This is not an issue of philanthropists versus greedy, cold-hearted, capitalists. The issue is the impossibility of sustaining current federal government programs. Too many people have become dependent on government programs to cut them all at once. The best solution for scaling back government spending would be to start by shrinking our overseas military presence. That would save many hundreds of billions of dollars per year. The savings obtained can be used to fund domestic programs for the short period of time before they, too, are eliminated. The ease of obtaining welfare exacerbates the immigration problem.

Quote: “To close the long-term entitlement gap, the U.S. economy would have to grow by double digits every year for the next 75 years.”

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