The Magical Beast

February 23, 2025February 22, 2025Leave a comment

February 23, 2025

by Stephen Stofka

This is second in a series on centralized power. I decided to use a more conventional narrative rather than the debate format of previous posts. Research on this topic upset my “apple cart” of preconceptions regarding spending, taxes, and Republican support for some social programs. I survived.

Proponents of smaller government aim to restrain the growth of government spending by reducing tax revenue. In a 1981 Address to the Nation shortly after taking office, President Ronald Reagan first proposed the idea. If Congress would not cut back spending, then reducing tax revenues would force them to cut spending. As many political leaders did, Reagan assumed that the public would not tolerate the nation running large fiscal deficits. For most of the eight years he was in office, government spending stayed fairly constant at about 22% of GDP and the federal deficit remained at the same percent of GDP as during Jimmy Carter’s term. After 9-11, the public’s tolerance for deficits grew. The feckless Bush administration promised that Iraqi oil production would pay for the costs of invading the country. In 2003, the Republican Congress passed tax cuts and Bush won reelection despite the many failures of the Iraqi invasion. This time, he did so without the help of the conservative justices on the Supreme Court. It was the last time a Republican would win the popular vote until the election of Donald Trump in 2024.

A 2006 analysis by Christina and David Romer found little support for the Starve the Beast hypothesis and suggested that lowering taxes may, in fact, increase spending. In a 2006 paper, William Niskanen, former head of the Cato Institute, found that spending and tax revenues moved in opposite directions. One of the pathways for this phenomenon may be that taxpayers come to disconnect the two forces, taxes and spending, and don’t hold politicians responsible. For a politician, cutting taxes is a popular brand but they keep their seats by “bringing home the bacon” for their constituents. A farming community does not want to see decreases in crop subsidies or favorable tax breaks. Voters magnify the burden of spending cuts, feeling as though they are shouldering more of the burden than other voter groups.

In his second term, Donald Trump has adopted a different approach – kill the beast. Readers of William Golding’s Lord of the Flies will remember the scene where a mob mentality overtakes a group of shipwrecked boys and they start a feverish chant after a hunt, “Kill the pig, spill its blood.” The cuts that Musk and his DOGE team are making on the federal work force resemble less the precision of a surgeon and more the frantic swinging of a knife in the dark. They have targeted recent hires with few job protections and paid little attention to what those workers do. In their zeal to kill or wound the bloated government – the beast – they have laid off nuclear safety and food safety workers, infectious disease specialists and IRS workers near the height of tax filing season. Both Musk and Trump are among the wealthy elite. Neither is dependent on a tax refund.

In his recently published book Why Nothing Works: Who Killed Progress—and How to Bring It Back, Marc J. Dunkelman recounts the expansion of the federal government, starting with the Progressive movement that began under Theodore Roosevelt’s administration over a hundred years ago. The movement embodies two instincts that are in constant tension, a “progressive schism” whose roots began when the nation was founded (pg. 22). Alexander Hamilton favored a strong central government whose institutions could facilitate the commerce and defense of the new American republic. Thomas Jefferson believed that the integrity and character of the new nation depended on the yeoman farmer, who must be protected from the power of government. Jefferson was horrified by the abuses of a strong British government headed by a monarch.

Progressives want to expand the reach of government – the Hamiltonian instinct – but are fearful of the power of government – the Jeffersonian instinct. The struggle between these two sentiments frustrates the aims of the Progressive movement. Progressives’ “cultural aversion to power renders government incompetent, and incompetent government undermines progressivism’s political appeal” (pg. 15).

For more than a century conservatives in both political parties have tried to check the ambitions of the progressives and the expansion of the federal government. For almost a century following the civil war, southern Democrats fought to preserve their political dominance and cultural institutions from the imposition of reformist norms by “northern elites.” There is still a strong antipathy to federal power but most of us have adapted to and enjoy federal institutions created by progressive legislation. Millions of Americans enjoy our national parks and monuments but over a century ago, local groups protested federal interference in the management of lands within state boundaries like Yellowstone Park, Glacier National Park and Grand Canyon National Park.

We no longer argue over child labor laws introduced by progressives in the early 20^th century. Though popular today, conservative groups fought against the Social Security program when it was first introduced in the 1930s. Congressional Republicans, however, were largely unopposed, according to this 1966 interview with George Bigge. Opposition to “socialized medicine” stymied proponents of a Medicare type system first proposed in 1942. In the 1950s, President Eisenhower initially supported a health plan financed through the Social Security system but dropped his endorsement over objections that the program was a slippery slope to socialized medicine (Source). Wilbur Mills, the powerful Chairman of the House Ways and Means Committee, overcame Republican opposition to the Medicare program by introducing a Part B system for physician payments that would be voluntary. Many of us make an uneasy truce with federal power when those policies produce a net gain for our well-being, or there are limits to federal mandates.

This week, Donald Trump completed the first month of his second presidential term with a whirlwind of federal job cuts and controversial remarks. The first ninety days of a presidential term are said to be the honeymoon period when public opinion is still forming but recent polls by Quinnipiac University and CNN indicate that initial favorable sentiment has soured. More respondents disapprove of Trump’s policies than approve. Trump has promised to downsize both spending and taxes but preserve the Social Security and Medicare programs. Both programs are popular, as many voters feel that people have earned the benefits after a lifetime of paying taxes. The taxes, or dues, come first; the benefits come later.

There are no dues for the Medicaid program which provides health care insurance for low-income households. The federal government and states share the costs of this program in varying degrees, with the federal government picking up the majority of the costs. The Republican majority in the House has proposed $880 billion in cuts to the Medicaid program and Trump has expressed support for the cuts, surprising some Republican lawmakers and Trump’s own staff.

Trump acts with the impulsiveness of a 14-year-old boy. In an earlier age, the public wanted a stable hand in control of a vast nuclear arsenal. Thirty years after the end of the Cold War, voters seemed less concerned with Trump’s erratic behavior. Some excuse it as a negotiating ploy; others see it as a tactical maneuver. In Washington, where everyone has a “loaded weapon,” so to speak, Trump presents a moving target. Others see the policy moves as sheer incompetence. Over a thousand employees at the National Park Service were laid off and seasonal hiring was frozen (Source). Oops. Seasonal employees fight forest fires and clean bathrooms at National Parks. The Trump administration did an about face and promised to hire even more seasonal employees than the Biden administration did (Source). The daily two-step is a boon for news organizations and pundits. Lots of copy. Not a dull moment in the 24-hour news cycle.

Advocates may clamor for the death of the beast – the government – but many of the functions that the beast provides are popular. In 1963, the folk group Peter, Paul and Mary released the song Puff, the Magic Dragon. Although Puff was an eternal creature, his friend Jackie Paper eventually lost interest in Puff as he grew up. After his friend abandoned him, Puff lost all his vigor and retreated into his cave by the sea. Some wish that the federal government would do the same. Lobbyist Grover Norquist wished that government would become so small that “we can drown it in a bathtub” (Source). Unlike Jackie Paper, the majority of the public has not outgrown its affection for government programs or its belief in the magic of government power.

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Image by ChatGPT at the suggestion “draw a picture of a multi-colored dragon on the shore of the ocean with a cliff behind him.”

A Debate on Presidential Power

February 16, 2025February 15, 2025Leave a comment

February 16, 2025

by Stephen Stofka

This is part of a series on centralized power. This week’s debate is about the power of the President relative to the other branches of the federal government. The debates are voiced by Abel, a Wilsonian with a faith that government can ameliorate social and economic injustices to improve society’s welfare, and Cain, who believes that individual autonomy, the free market and the price system promote the greatest good.

Abel began the conversation. “Our country is founded on the principle of federalism, a sharing of power between the states and a centralized government in Washington. In that central authority are three branches that balance and check each other’s ambitions for power. It looks like Trump is challenging those restraints.”

Cain shrugged. “The Speaker of the House doesn’t seem worried. The Congress hasn’t been able to get anything done. It’s been almost thirty years since Congress completed a full budget (Source – pdf). The executive branch is stuck with the burden of implementing years of legislative compromises. It is entirely appropriate that the President clean up the mess.”

Abel shook his head in disbelief. “Trump is taking control of the purse, a power given to Congress by the Constitution. Doesn’t it worry you that a Democratic president could simply undo any laws passed by a Republican legislature?”

Cain looked puzzled. “If the President gets out of line, the Constitution gives Congress the power to impeach the President.”

Abel laughed. “Trump has already been impeached twice. Never in the history of this country has the Senate convicted a President. Impeachment is an empty threat. After the Supreme Court’s decision to grant the President immunity from criminal prosecution, the President can act like a king.”

Cain frowned. “FDR expanded the scope of the executive when he took office in 1933. Did your group sound the alarm then? Did you cry ‘Constitutional crisis’ when Roosevelt threatened to pack the Supreme Court to get his way? No, your group stood by silently as Roosevelt upended 150 years of tradition. This President is trying to undo that shameful legacy, to return this country to its founding roots.”

Abel showed his disdain. “He is undoing a century of building government institutions that help people, that protect people from the power of large corporations. This is not the America of the 18^th century.”

Cain argued, “They are inefficient government institutions that swear allegiance not to the people they serve but Washington lobbyists and their own internal processes. We have a spending crisis. The Constitution gives the President the executive power. Alexander Hamilton argued for a strong executive and President Trump embodies Hamilton’s vision.”

Abel sighed. “You’re talking about the unitary executive theory. Advocates for that theory take Hamilton out of context. He wanted to convince those in the state legislatures that the strong executive in the proposed Constitution was preferred to the weak plural executive that had been defined in the Articles of Confederation. Hamilton was not advocating for a President with all the powers of a king. The country had fought seven bloody years to rid themselves of a king.”

Cain shook his head. “Look, Washington and Jefferson set the example. They were strong Presidents who sat at the top of the executive hierarchy. They didn’t ask Congress for permission. They defined their role as the chief executive of the laws.”

Abel interrupted. “Ok, but the executive branch was small in the early 19^th century. Employees worked at the whim of the President. As the country grew, there needed to be more stability in the executive work force. Congress wanted more control or supervision of the various departments. After all, it is Congress who writes the laws. Congress represents the people. The President is the people’s agent, executing the laws that the representatives of the people have passed.”

Cain held up his hand. “Look, you’re describing a clerk, not the leader of a country. Hamilton was arguing for a leader with enough power to meet threats from other countries led by monarchs with absolute power.”

Abel argued, “That was another century when even the mightiest rulers had relatively little firepower at their command. We have invented weapons that are too destructive to put at any person’s command. There have to be checks and balances within the executive just as there are within the legislative and judicial branches.”

Cain shook his head. “The more destructive the weapons, the more we need a strong leader with the authority and power to act decisively to answer any threats from other countries.”

Abel frowned. “There has to be checks and balances within each branch. That’s especially true for the executive. All previous empires have fallen because one person gained too much power. Rome, Persia, Egypt, and Byzantium come to mind. There are too many temptations. A President with control of the Bureau of Labor Statistics would be able to adjust the monthly unemployment numbers or inflation report to make his administration look good. Argentina did this for seven years (Source). China, Venezuela and Hungary do it. He could disallow the counting of some of the population by the Census Bureau to reduce some grant funding for states who did not vote for him.

Cain scoffed. “There are checks and balances between Congress and the Executive. If a President were to ‘cook the books,’ that information would be leaked. The Congress could impeach the President.”

Abel’s expression was stern. “When the founders wrote the impeachment rules, they envisioned a system without political parties. In a party system, the President is the leader of the party. Impeachment is not a check. If the House is the same party as the President, they dare not bring their leader up on impeachment charges. A Democratic-led House would not impeach Andrew Jackson in 1833. All the anti-Jacksonian majority in the Senate could do was censure Jackson.”

Cain argued, “In 1868, the Republican-led House impeached Andrew Johnson.”

Abel shook his head. “Johnson was a Democrat who ran with Lincoln on a third-party ticket called the Union Party (Source).”

Cain’s tone of voice was conceding. “Ok, maybe impeachment is not the ideal check on a President. But they pay attention to popular opinion. If the public is outraged, they will complain to their representatives. Presidents care about public opinion.”

Abel showed a wry smile. “George Bush’s poll numbers fell as low as 25% (Source). What did that accomplish? There is an entire phalanx of advisors who shield the President from disheartening news. A President lives in an information bubble designed to protect his self-confidence.”

Cain argued, “Well, there are no checks on the Supreme Court. They have lifetime tenure and the last one to be impeached was in 1805 (Source). They control their own agenda. The House and Senate make up their own rules (Source) and have no internal Constitutional checks. In the Senate, the Majority Leader controls all the floor time. If he doesn’t want some legislation brought to the floor, it isn’t considered. The President should have the same authority over officials in the executive branch. He should be able to direct them on how he wants the law executed. His decisions should not be subject to review by a court.”

Abel frowned. “You’re describing the unitary executive theory again. It grants the President most of the powers of a king. We know that Hamilton, Jefferson, Madison and the other founders did not want a king. This country rejected rule by the whim of one person, the king. We are a nation of laws, not whims. Trump and Musk are two rich crackpots who dance to the music of their own whims. The wolves in Russia and China are licking their chops. By the time Trump is done, this country will be weaker.”

Cain scoffed. “This country was already weak. That’s what the President is trying to fix. The country has $36 trillion dollars in debt. We’re spending more on interest than we do on defense. We play mister nice guy, letting other countries take advantage of our charity, then vote against our interests in the U.N. DOGE is going to trim the discretionary items in the budget then look to implement fraud controls in mandatory spending programs like Medicare and Medicaid. Trump has shown he’s a tough negotiator.”

Abel laughed. “Trump changes his mind from day to day, from week to week. It’s a sign of weakness that Putin and Xi will take advantage of.”

Cain shook his head. “The President dances like Muhammed Ali in the ring. That’s what we need. A fighter who keeps other countries hesitant to make any aggressive moves. That’s the road to a cautious peace.”

Abel sighed. “It’s only a few weeks since Trump took office. He will leave a trail of chaos and carnage and half of the people in this country won’t hold him responsible.”

Cain laughed. “And the other half of the country thinks he’s the devil. That says more about all of us than it does President Trump. We’ll talk next week.”

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Image by ChatGPT

The scene is set in a grand hall with tall columns, chandeliers, and intricate tapestries. A majestic king is seated on a grand throne, dressed in luxurious royal robes adorned with gold and jewels. Several people kneel before him in deep reverence, wearing medieval-style clothing.

The Carousel of Political Appointees

February 9, 2025February 8, 2025Leave a comment

February 9, 2025

by Stephen Stofka

This Super Bowl weekend, I’ll take a short break from the debate series and take a brief look at the Federal workforce. Next week I hope to have a debate on the Central Power of the Federal Government.

Since Donald Trump took the oath of office on January 20^th, he has enlisted Elon Musk to head an effort to trim the civilian federal workforce (CFW). These employees do not include the men and women serving in the Armed Forces. Musk leads an unofficial department called the Department of Government Efficiency (DOGE) designated by President Trump to root out “waste, fraud and abuse.” Several lawsuits have challenged the authority and methods of DOGE to make personnel decisions. Several DOGE employees have access to personal credit and medical information but have not passed a background check (Source). This is a fluid situation sparking controversies each day. I wanted to understand the structure of the CFW as a context for this evolving story.

CFW employees fall into one of two categories: competitive service workers who must pass examinations to be hired and advance within the organization, and political appointees who are excepted from such requirements. The former are permanent or career employees and serve under several Presidential administrations regardless of the party of the President. This system promotes stability within a shifting political environment and was a response to the former system of patronage. The latter are temporary employees and leave the CFW when a new President takes office. Within each classification, there are several subcategories. For interested readers, I will list the various classes of employees in the notes.

Last summer the Partnership for Public Service published an analysis of 2023 data from the Office of Personnel and Management (OPM), the HR agency of the of the federal government (Source). There were over two million permanent full-time employees in the CFW, an increase of 140,000, or 7% from 2019 levels. OPM lists the current level of the CFW at 2.2 million (Source). The majority of the increase was in response to the Bipartisan Infrastructure Law passed in 2021, the first year of the Biden administration, when the Democrats held a “trifecta,” all three branches of government. The law benefited both red and blue states but has been criticized for the embarrassing flaws in its implementation.

The bill contained $42 billion to expand internet access, particularly to rural areas. Nothing has been connected yet. Over $7 billion was earmarked for electric vehicle charging stations but fewer than fifty have been built. To provide some comparison, consider the case of a Denver suburb that hired HDR, a private company, to complete a full renovation of a county library, expand the building and construct four charging stations (Source). HDR completed the project in three years, roughly the same time period since the passage of the 2021 law. Federal projects are plagued with a cumbersome process that makes delays inevitable and diminishes public confidence in the competence of the federal government. When President Trump and Elon Musk claim that they can fix the problem, their supporters believe them.

President Trump would like to undo much of what his predecessor, President Biden, accomplished. Trump could argue that he is simply resizing the CFW to pre-pandemic levels. According to the Partnership for Public Service, 71% of the CFW is defense or national security related. Twenty-one percent of federal employees are in the Department of Veterans Affairs (Source). Cuts to those programs will be unpopular with MAGA supporters and Republican lawmakers. Fifteen percent are medical personnel, some hired during the Covid crisis, and might become a target for dismissal. Many of those provide medical service to active military and veterans. USAID and the EPA have long been targets of Republican condemnation. Trump says he wants to close USAID. The EPA could be next. In response to several lawsuits, the courts will have to decide whether the executive branch has any authority to eliminate a department or agency created by Congress.

Excluding Postal Service workers, there are 2.2 million employees in the CFW (Source). Only 9000 are political appointees and listed in the OPM’s Plum Book (Source). President Trump wants to follow through on an executive order he signed just before the 2020 election that was rescinded by Biden (Source). That order envisioned a plan to convert 50,000 federal employees into a new type of political appointee called Schedule F that would be loyal to Trump’s policies (Source).

In his first term, Trump became convinced that career civil service employees were sabotaging the policies of his administration. Political appointees carrying out the policies of then President Trump were frustrated by the delaying tactics of career employees who may not have agreed with those policies (Source). Many career employees have done their jobs for both Democratic and Republican administrations. They would claim that they are loyal to the law, not to any one President. Although Trump took an oath to uphold and faithfully execute the laws, his loyalty is to his opinion and vision, not the law. He follows the tradition of President Nixon, who believed that the three branches of government are not co-equal. Nixon regarded his interpretation of the law as the law.

The appointment system is bit complicated but is designed to balance power and interests. President Trump is used to running a family business and does not like checks and balances because they diminish his power. On the other hand, voters elected the President, and he should be able to have some confidence in the personnel who execute public policy. Career civil service employees are a welcome alternative to the patronage system that existed in the 19^th and early part of the 20^th century. However, a large class of employees with virtual tenure can become insulated from the public will. Those employees can develop a culture that is resistant to policy changes. Within the context of a CFW of more than two million employees, shifting the status of 50,000 employees can seem modest to some. Does the executive have the authority? Will the courts and Congress stand by while the executive alters a workforce structure constructed by Congress?

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Image by ChatGPT

The first type of position are presidential appointees with Senate confirmation (PAS). These positions promote a balance of power between Senators and the President.

The second type of position are Presidential appointees that do not need Senate confirmation. This gives the President the autonomy to build an executive team that will implement the policies he wants. These make up 5% of appointees.

The Senior Executive SES-NA and SES-GEN appointees make up half of the SES class and almost half of all 9000 appointees. The other half of SES employees are filled by career appointees on a competitive basis to ensure some impartiality.

The Schedule C (SC or SL) positions allow agency heads to place key policymakers with some expertise in an agency but only after approval by the Office of Personnel Management, a check on political discretion (Source).

The Schedule C (XS) statutory positions legislated by Congress strike a balance of Presidential discretion and Congressional policymaking. Most of these positions are in agencies with financial functions or international jurisdictions like USAID. They are GS-15 or lower and Congress has exempted them from competitive hiring (Source).

A Debate on Tariffs

February 2, 2025February 1, 2025Leave a comment

by Stephen Stofka

This is 12th in a series of debates on various issues. The debates are voiced by Abel, a Wilsonian with a faith that government can ameliorate social and economic injustices to improve society’s welfare, and Cain, who believes that individual autonomy, the free market and the price system promote the greatest good.

This week, Abel began the conversation. “Toward the end of our conversation last week, you mentioned the shift of voter sentiment toward the right.”

Cain nodded, “Yes, the New York Times analyzed the change in election results from the 2020 election and it showed a shift toward the Republican Party in most counties (Source – NY Times).”

Abel interrupted, “Voters shifted left in the 2020 election. For the past twenty years, sentiment seesaws left and right with each election. Voters are so evenly divided that a slight shift can have a dramatic effect on party control of government.”

Cain argued, “This time is different. The voters want change. The neoliberal wing of the Republican Party has been discredited and driven out after two failed wars and a permissive trade policy that boosted China’s economy at the expense of American jobs. Gary Gerstle (2022, pg. 2) writes that it was the financial crisis that triggered the fall of the neoliberal order. President Trump is trying to undo the mistakes of that neoliberal ideology.”

Abel frowned. “I’ve read that book. Gerstle also noted that neoliberal policies were responsible for a lowering of the barriers to free trade (pg. 5). Tariffs and borders, for example. Trump is on a mission to rebuild those barriers. That will only hurt trade and weaken American business and consumers.”

Cain shook his head. “Open borders allowed for the smuggling of drugs and people across our southern and northern borders. The costs of open borders outweigh the benefits.”

Abel sighed. “25% tariffs on imports from Mexico and Canada are going to fuel inflation and hurt consumers. Both countries have said they will retaliate. We export a lot of grains to Canada. That will hurt our farmers.”

Cain argued, “In 2002, President Bush raised tariffs on steel and aluminum imports to as much as 30%. A year later, after complaints to the WTO, Bush ended the tariffs. Trump is made of stronger stuff. These countries are not doing enough to curb drug and people smuggling. It may not be an explicit violation of trade rules, but it violates the spirit of those rules.”

Abel replied, “Bush did that to save jobs in the steel industry. Instead of stemming the flow of jobs to other countries, the tariffs caused the loss of 200,000 manufacturing jobs (Source). Trump’s tariffs are going to raise unemployment and cost consumers.”

Cain rolled his eyes. “We’re not going to agree on this. We have got to restore our nation’s manufacturing capacity and the supply chains that support production that is vital to our security. China controls a lot of essential minerals used in the production of electronics. They are actively pursuing alliances with African countries to lock up essential mineral resources. This is economic warfare, and we have to take measures to defend ourselves.”

Abel frowned. “Tariffs lead to trade wars. Trump is acting like he has a mandate. He won with the lowest margin of the popular vote in the past four decades – just 1.5%. He didn’t even get a majority of the votes (Source). In 2016, he got fewer votes than Hillary Clinton. Contrast that with Obama, who had a 7.2% margin of victory in 2008, and Biden who won by 4.5% in 2020. Voters for Trump are going to wake up and find that they have been screwed.”

Cain argued, “Democrats always use the popular vote as a measure of voter approval. States with a less concentrated population provide the resources that are vital to the economy and security of this country. Those states supply the food, the beef, the fuel that people in urban areas rely on. It’s an economic symbiosis. The producers and workers in rural areas should not be put at a disadvantage simply because their production requires more land. The Electoral College balances the inequities that result from a popular vote.”

Abel scratched his chin. “Tariffs are going to hurt the rural producers and workers that voted for Trump. Those red rural states already depend on the coastal blue states for federal benefits like farm and oil subsidies, Medicaid and welfare and they resent it. They imagine that Trump will revitalize rural economies so that they are more like it was in the 1950s when relative wages were higher. It was the unions who bargained for those higher wages and benefits. Without unions in the private sector, wages in rural counties will remain low.”

Cain raised an eyebrow. “Unions abused their power and companies became less competitive. Unions sometimes enforced rules among their members with violence or intimidation in the workplace (Source). They invite free riding. ‘Shirkers’ are paid at the same rate as productive employees. It’s bad for morale and makes workers less productive as a whole. An employee in a union has two bosses – the shop steward and the employer. The employer wants the employee to work at their best. The shop steward might want an employee to slow down so as not to raise the employer’s expectations.”

Abel cocked his head slightly. “Free riding is a collective action problem that is not unique to labor unions. They empowered workers in negotiations with large companies who wielded extraordinary power in the labor market. In some counties, a company was a monopsony, the main source of employment for everyone in that region.”

Cain argued, “The government is the largest employer in the country employing over 23 million at various levels (Source). Walmart, the largest private employer, has just over 2 million workers (Source). Unions have taken over the public sector.”

Abel interrupted. “Let me stop you there. The BLS just released their annual survey of union membership. It’s less than a third in the public sector (Source).”

Cain nodded. “OK, perhaps I overstated the percentage. Still, public sector membership is five times what it is in the private sector. Unions may give workers more bargaining power, higher wages and more benefits. Who pays for all that? Taxpayers. Our public schools are not teaching essential reading and math skills. Fewer police officers on the street. Potholes go unfilled. What are taxpayers getting for their money? Screwed.”

Abel scoffed. “Elementary school teachers generally make less than the average wage in their local economy. In Denver, an elementary school teacher averages almost $54,000 (Source). The average in private industry is more than $80,000 (Source).”

Cain argued, “Ok, so maybe elementary school teachers in Denver are underpaid. Their main funding source is local property taxes. In the whole metro area though, federal government employees make $2128 a week (Source). That’s far above the average weekly wage of $1721 in the private sector (Source).”

Abel shrugged a shoulder. “Look, Denver is a regional hub. There is a higher proportion of tech employees in the federal workforce in Denver than the private sector. State government employees make just $2 more than the average (Source).”

Cain frowned. “If the mix of jobs and talent was similar to the private sector, then their union is not very effective at negotiating pay.”

Abel showed some impatience. “Your group doesn’t like unions. I get that. Incorporation is a collaboration of capital for investor profits. A union is a collaboration of workers for better pay and working conditions. Capitalism has been so successful because it turns the free riding problem into an advantage.”

Cain laughed. “You’re saying something good about capitalism? Go on.”

Abel smiled. “Small investors, holders of common stock in a company, enjoy the same return on their capital as the giant hedge fund who may own a substantial stake in the company. Because they have so much at stake, large investors take an active role in monitoring or directing management decisions. The small investors freeride on those efforts.”

Cain nodded. “That’s an interesting perspective. I still don’t think that unions are needed to negotiate for workers. Worker productivity and demand will support higher wages.”

Abel sighed. “In theory. This is the real world, not a freshman class in economics. If capital can collaborate to gain bargaining power, workers must collaborate to match that power.”

Cain motioned his impatience. “We started out talking about tariffs and now we’re talking about unions.”

Abel laughed. “We are exploring different perspectives. We will never come to an agreement unless we try to understand each other’s positions on these issues.”

Cain nodded. “See you next week then.”

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Image by ChatGPT

Gerstle, G. (2022). The rise and fall of the neoliberal order America and the world in the free market era. Oxford University Press.

The American Federation of Government Employees represents 800,000 of two million federal employees (Source). The American Federation of State, County and Municipal Employees represents more than 1.3 million workers (Source).

A Debate on a VAT tax

January 26, 2025January 25, 2025Leave a comment

January 26, 2025

by Stephen Stofka

This is 11th in a series of debates on various issues. The debates are voiced by Abel, a Wilsonian with a faith that government can ameliorate social and economic injustices to improve society’s welfare, and Cain, who believes that individual autonomy, the free market and the price system promote the greatest good.

The notes at the end give more context to the arguments.

Cain began this week’s conversation. “We left off last week discussing alternatives to the income tax. Before we entertain alternatives, can we agree that the income tax should be abolished at the same time the country adopts a new scheme of taxation?”

Abel cleared his throat. “I’m not so sure about that. Can an alternative tax scheme raise the same amount of revenue?”

Cain raised an eyebrow. “If it didn’t, that would be more money for private consumption and investment.”

Abel grimaced. “That’s playing with fire. The country is already running persistent deficits. If there was a significant difference in revenue, it could seriously weaken the dollar.”

Cain said, “Our group favors a consumption tax to replace the income tax. They were the main source of federal revenue until the passage of the 16^th Amendment in 1913.”

Abel shook his head. “Consumption taxes didn’t raise enough money to pay off Civil War debts and the pensions promised to veterans and their families. In the early 20^th century, society was becoming more complex. There was a greater role for government. The greatest improvements in health and life span came in those decades. Public sanitation measures and vaccines reduced water borne illnesses and contagious diseases.”

Cain argued, “I agree that there was a greater role for government. It’s just gone too far. Particularly the role of the federal government in our lives. A consumption tax broadens the tax base. Gives voters a stake in the government’s spending.”

Abel nodded. “There are several types of consumption tax. Many developed countries use a VAT or value added tax, but it is a supplemental to an income tax.”

Cain’s displeasure was obvious. “Our group would not support another tax. Also, with a VAT, politicians are tempted to fiddle with the type of items subject to the tax. It invites interest groups to lobby for exclusions from the tax. That’s what goes on in Britain and many European countries. We advocate a tax that reduces favoritism.”

Abel argued, “Any tax scheme invites favoritism. For instance, Colorado has a flat income tax but many exclusions from income that are not included in federal income. Pensions, social security and charitable contributions are just a few examples.”

Cain shook his head. “A credible alternative would have to make alteration as difficult as possible for Congress – just like the Constitution is.”

Abel sighed. “Specific language makes compromise difficult. The law is full of words that are open to interpretation like ‘reasonable’ and ‘appropriate.’ Section 8 of Article 1 of the Constitution stipulates that the Congress provide for the ‘common Defence and general Welfare.’ What does the word ‘general’ mean in that context? It’s clearly not the common welfare or the founders would not have agreed on the insertion of the word ‘general.’ To this day, our two groups have been arguing about the scope of powers authorized by those two words.”

Cain tilted his head slightly. “Ok, granted it’s not easy. We are not striving for perfection, only clearly defined terms and transparency. No more backroom deals in Washington.”

Abel frowned. “Look, people and the institutions they create are too complicated for simple solutions. The only reason that the Constitution exists in a difficult to alter form is the small number of people who had a hand in its creation.”

Cain scoffed. “Each state had to ratify the Constitution and the Bill of Rights. In 1787, the Virginia legislature had 168 Senators and delegates. Today Virginia has only 140 members to represent a population that is sixteen times as large. Believe me, there was plenty of vociferous debate. The Constitution is a series of compromises hammered out in Philadelphia but reflecting the sentiments of those in the individual states.”

Abel interrupted, “The few who could vote. Men with property. The sentiments of the Declaration of Independence were noble and democratic, but this country’s Constitution was founded on governance by an aristocracy. After a bitterly fought Civil War, the passage of the 14^th Amendment expressed the democratic sentiments that the founders could not embody in the original Constitution.”

Cain laughed. “Once again, we are getting off the topic. Our group wants specific, not broad, taxation powers that limit Congress and the President. It’s a principal-agent problem. We have to keep our elected representatives, our agents, on a short leash, or they will satisfy their own interests more than they do the people they represent. The text of the 16^th Amendment was too broad and invited the corruption and complexity the tax code has become after more than a hundred years.”

Abel looked puzzled. “Your group wants an amendment with specific language?”

Cain nodded. “Yes, an amendment revoking the 16^th Amendment and installing a consumption tax of some sort.”

Abel asked, “What about new home sales? They are included in GDP, but the consumption happens over years. The Bureau of Labor Statistics calculates an ‘imputed rent’ that a homeowner pays and collects each month. It’s based on market rents in that area.”

Cain shook his head. “It can be simple. The language of the amendment would target the revenue as a percentage of GDP. The means to get to that target would be left up to Congress.”

Abel looked interested. “Go on, tell me more about that.”

Cain continued, “Our group supports a national sales tax or VAT to replace the income tax. In 2023, the federal government collected $2.56 trillion in individual income taxes on a GDP of $27.2 trillion. That’s 9.2% of GDP. Let’s say a thirty-year average is 10% to make the math easy. A VAT or some other consumption tax rate could be adjusted each year based on quarterly GDP estimates that the government already does. That would not be cumbersome wording.”

Abel showed concern. “Your group strives for simplicity like it was the Holy Grail. In 2018, the Congressional Budget Office estimated the revenues from a VAT over a ten-year period. They noted that a broad tax base includes only 66% of personal consumption expenditures and those account for only 67% of GDP. Multiply those together and the tax base is only 44% of GDP. To collect the same revenue as individual income taxes, the tax rate would have to be 21% or so, not 10%.”

Cain counted on his fingers. “One, it would broaden the base so that more voters have skin in the game. Two, it would protect everyone’s privacy. Three, it would set clear and transparent limits on politicians in Washington. It’s well worth the price.”

Abel shook his head. “To abolish all tracking of income, all of the states would have to agree to a VAT to collect their taxes. What about Social Security taxes collected? For the past 15 years, those tax revenues have been 6.5% of GDP. The tax rate would have to be 36% to account for Social Security taxes. Add in state income taxes and the tax rate would be over 40%. Adding in state and local sales tax could bring the total tax bite to 50%.”

Cain argued, “Look at Britain. It has an income tax rate that starts at 20% and a VAT rate of 20%. A middle-income person could pay 60% total tax. The average effective tax rate in the U.S. is 15%. Add in 15% for the employer and employee contributions to FICA taxes. State and local taxes can add up to eight or ten percent. The total tax bite under our current system is close to 40%.”

Abel frowned. “An analysis of 2021 IRS data showed that the bottom 50% of taxpayers paid an average of only 3.3% of gross income, not 15%. Voters will not go for a tax scheme that will place a huge burden on most taxpayers to reduce the tax burden on Elon Musk and the other 1%.”

Cain interrupted. “That’s one of the problems. Half of the voters have so little skin in the game that they let politicians get away with anything. That’s how the budget became so bloated with ‘gimmes.’”

Abel replied, “Well, that’s a discussion for another day. I just don’t think a VAT is a practical alternative as a complete replacement for the individual income tax. Sure, we all like simple but the burden of common costs and the distribution of benefits is too complex for simple policies.”

Cain pursed his lip. “The more complex the policy, the less transparent. In a democracy, transparency is crucial.”

Abel raised an eyebrow. “I agree but I don’t think your group can sell a tax policy that would increase the tax bite for the lower half of income earners by at least ten to fifteen percent. It might throw the economy into a recession within a year.”

Cain objected, “I think voters can be convinced. This last election has shown that voters are tired of progressive policies.”

Abel smirked. “Trump won the popular vote by 1.6%. The House has a slim majority. The Senate has a 53-seat majority only because Democrats had almost twice as many Senators up for re-election as Republicans. It’s the luck of the draw. It’s certainly not a mandate as Republicans are claiming.”

Cain shook his head. “A lot of traditionally Democratic voters went for Trump. Voter sentiment is shifting.”

Abel smiled. “That’s a discussion for another time.”

Cain turned to go. “See you next week.”

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Photo by Mary Farrell on Unsplash

The Tax Foundation explains the difference between a value-added-tax (VAT) and a national sales tax. https://taxfoundation.org/taxedu/glossary/value-added-tax-vat/ The European Union has a quick explainer on how a VAT works https://taxation-customs.ec.europa.eu/taxation/vat/how-does-vat-work_en

This Investopedia article explains several types of consumption tax. https://www.investopedia.com/terms/c/consumption-tax.asp

Abel brought up Colorado’s exclusions from income as an example of the favoritism that exists even in simple flat tax schemes. https://tax.colorado.gov/individual-income-tax-guidance-publications.

The effective tax rate is the tax divided by the adjusted gross income. On form 1040, it is line 24 divided by line 11. Popular tax software programs usually note the effective tax rate on their summary page.

Cain stressed the many legislative debates that ensued during the ratification process. This is a two-book set that contains the Federalist papers and arguments in several state legislatures. https://www.amazon.com/Debate-Constitution-Federalist-Anti-Federalist-Ratification/dp/1598534114/ref=sr_1_1

In response to Abel’s argument that the Constitution was a product of elite sentiments, Cain noted that there was far more representation of each district within a state than there is today. In 1787, the population of Virginia was 420,000 with the caveat that Negro slaves were counted as 3/5ths of a person. The actual population was about 532,000. Today the population is 8.7 million, sixteen times larger, yet the legislature is smaller. Counting Negroes as 3/5 of a person in the Constitution was a compromise about the amount of tax each state had to pay for the nation’s common expenses. Northern states wanted to share common expenses according to the population of each state. Southern states insisted that Negro slaves were property and should not be counted. Counting Negroes as 3/5 of a person was a compromise about money and the burden of taxation. https://csac.history.wisc.edu/2022/08/01/population-and-constitution-making-1774-1792/

Abel argued that a 21% VAT would be needed to replace individual income tax revenue. In 2023, individuals paid $2.56 trillion in income taxes. The CBO estimated that a VAT on a broad base of items would tax only two-thirds of personal consumption expenditures (FRED Series PCE) which was $18.8 trillion in 2023. 66% of $18.8 trillion equals a $12.4 trillion tax base. $2.56 trillion collected divided by a $12.4 trillion tax base equals a 20.6% tax rate. Here is a link to the CBO’s summary https://www.cbo.gov/budget-options/54820

Taxes collected on Social Security is FRED Series https://fred.stlouisfed.org/seriesBeta/W780RC1Q027SBEA.

Cain compared a 50% tax bite with combined income tax rates and VAT rates in Britain. Income tax rates in Britain start at 20%. https://www.taxesforexpats.com/country-guides/uk/uk-vs-us-taxes.html#part1 The VAT rate is 20% https://taxfoundation.org/data/all/eu/value-added-tax-2024-vat-rates-europe/

A Debate on Income Taxes

January 19, 2025January 18, 2025Leave a comment

January 19, 2025

by Stephen Stofka

This is tenth in a series of debates on various issues. The debates are voiced by Abel, a Wilsonian with a faith that government can ameliorate social and economic injustices to improve society’s welfare, and Cain, who believes that individual autonomy, the free market and the price system promote the greatest good.

Unlike past weeks, Cain began the conversation. “Last week, we left off talking about taxes and the effect of taxes. First of all, I’d like to challenge your group’s support for the progressive income tax system.”

Abel interrupted, “Let me stop you there. If you want to talk about the progressive feature of the current tax system, fine. Neither you or I like the hodge-podge of policy goals and tax shelters that current tax law has become.”

Cain nodded. “That’s fair. Let’s keep our discussion confined to the progressive aspect where the more that a person earns, the higher the percentage of income tax the government takes.”

Abel sighed. “In principle, should every person pay the same percentage of federal income tax? Maybe. Fourteen states have a flat income tax rate. But practice and principle often conflict. Let’s use World War 2 is an example. Winning the war and defending the country was a benefit to every American. Who should pay the most? As a practical matter, the government needs to tap the pockets of the rich in greater proportion than the poor. That’s what the U.S. did for two decades after the end of that war.”

Cain tilted his head. “War is about the nation’s survival. That is the overriding principle that justifies some practical measures. Your group has used war funding as a justification for a progressive income tax since the 16^th Amendment was ratified in 1913.”

Abel argued, “A nation’s sovereignty is even more important to rich people because they have more to protect, more to lose should the country be taken over by another nation. During peacetime, government institutions are devoted more to the haves than the have nots. The haves should pay proportionately more.”

Cain shook his head. “I don’t understand your reasoning. The majority of government agencies are dedicated to programs for the poor. In 2022, the federal government spent $592 billion on Medicaid. The states spent another $242 billion. That combined expense was 3% of our country’s entire output and almost as much as we spent on defense, the #1 priority of any country.”

Abel asked in an insistent voice, “Who benefits from all that spending? Investors in the stocks of the companies that supply products and services to the federal government. According to one analysis, investors in the stocks of defense contractors enjoy one of the highest risk adjusted returns of any industry. The government recycles tax dollars into the pockets of the better off. It’s only right that they should pay proportionately more taxes.”

Cain smiled. “The economist Paul Krugman recently posted a CBO graph showing that the effective tax rate on the top 1% is often more than 30%. An analysis of 2021 income tax data by the Tax Foundation showed that the top 1% paid almost half of all income taxes while the bottom half paid just 2.3%. That is nothing more than the government taking money from the most productive members of our country and giving it to the less productive.”

Abel scoffed. “During the Reagan revolution forty years ago, the top tax bracket was lowered from 70% to 28%. Since then, productivity growth has fallen by almost 20%. The data contradicts your favorite beliefs. Lower taxes on the rich does not promote increased investment. What are the rich doing with that extra tax money? Are they investing more in productivity enhancements? No. They are buying big mansions and more toys, spending that will promote stagnating economic growth and a more unequal society, a sick society.”

Cain shook his head. “You talk about ‘extra tax money’ as though the money belonged to the government. Income belongs to the people who earn it, not the government. If someone wants to buy a bigger yacht, that’s their business. Some politicians want to spend other people’s money on their favorite theory of social justice. In 1969, the poverty rate was 12.1%. In 2023, after trillions of dollars spent on means-tested social welfare programs, the poverty rate was 11.1%. The programs have benefitted bureaucrats more than the poor people they were meant to serve.”

Abel argued, “The percent of seniors in poverty is a third of what it was in 1969. The Medicare, Medicaid and other social welfare programs of the 1960s have dramatically improved the lives of the oldest generation.”

Cain replied, “Social Security has been the main contributor to the reduction in poverty among seniors. President Johnson’s Great Society programs to reduce poverty did have an effect in the first five to ten years. After that, the benefits have been negligible. Look, poverty has many causes. Cultural, economic, geographical, political, historical. Politicians can’t just throw money at a complex problem like poverty and expect sustained results.”

Abel nodded. “Understanding a complex problem requires a complex analysis. When economists consider the effect of tax, educational and social programs, they estimate a reduction in poverty of 33% .”

Cain sighed. “Let’s stay focused here on the progressivity of the income tax system. Before these programs were enacted into law in the mid 1960s, tax rates were extremely progressive. They were still strongly progressive for another twenty years. Minor changes in tax law had little effect on poverty during those years. The dramatic reductions in poverty during the 1960s can be attributed to those social programs and a change in the political and social culture. Those short-term benefits have been overwhelmed by the long-term ill effects on our families and our society.”

Abel asked, “Since that tax revolution in 1986, the government has had less revenue to pay for programs. Except for the Clinton years when taxes were raised on the rich, the deficits only get more persistent. Those with higher incomes have the money to support the programs and agencies that form a crucial financial support for many families.”

Cain interrupted, “Whatever those programs do, they don’t alleviate poverty. That’s what the Census Bureau data shows. A progressive income tax system mainly supports the huge political infrastructure in Washington. Congressional subcommittees and a plethora of executive agencies. The government takes more taxes from the rich and the rich fund think tanks and hire lobbyists to get some of that money back or construct the policies they favor.”

Abel shrugged. “So, what’s the answer? A flat percentage for rich and poor alike? That will have a much greater effect on consumption for families in the bottom half of incomes. Is that fair? What should be the measure? The percentage of the tax or the percentage of misery that the tax has on a family?”

Cain smiled. “What’s the alternative? That’s a discussion for another week, I think.”

Abel returned the smile and waved goodbye. “See you next week.”

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Image generated by ChatGPT

The Peter G. Peterson Foundation has an analysis of the federal government’s budget here. https://www.pgpf.org/article/budget-explainer-medicaid/ . Combined state and federal expense was $834 billion, 3% of the $26,006 billion in GDP https://fred.stlouisfed.org/series/GDP Defense spending and investment was $930 billion https://fred.stlouisfed.org/series/FDEFX

FRED Chart on productivity https://fred.stlouisfed.org/series/OPHNFB In the period 1948 – 1984, productivity growth averaged 2.35% per year. Since 1985, it has averaged 1.93%, a reduction of 18%.

Census Bureau tables on poverty from 1959-2023. https://www.census.gov/data/tables/time-series/demo/income-poverty/historical-poverty-people.html Table 3 contains data on people by age. From 1969 to 2023, the poverty rate for seniors fell from 25% to less than 10%. For those aged 18 to 64, the poverty rate has actually risen from 8.7% to 10%.

This 2011 NBER article summarizes a paper by economists Gary Englehardt and Jonathan Gruber analyzing the reduction in poverty among seniors in the 20^th century. https://www.nber.org/bah/2004number2/social-security-and-elderly-poverty

This Washington Post article examines the long-term effects of the Great Society programs. This section is the war on poverty. https://www.washingtonpost.com/wp-srv/special/national/great-society-at-50/#war-on-poverty A more conservative outlook on the social and moral effects of those programs can be found at https://hc.edu/news-and-events/2017/02/28/great-society-wrought-fifty-years-later-marriage-family-poverty/

A Debate on Subsidies

January 12, 2025January 10, 2025Leave a comment

January 12, 2025

by Stephen Stofka

This is ninth in a series of debates on various issues. The debates are voiced by Abel, a Wilsonian with a faith that government can ameliorate social and economic injustices to improve society’s welfare, and Cain, who believes that individual autonomy, the free market and the price system promote the greatest good.

After a few pleasantries, Abel began, “Last week, we finished talking about the government’s role in the social contract. The scope of that role is the key difference between your group and mine.”

Cain nodded. “Your group thinks of the federal government as an insurance company. Our group tries to keep your group in check. It’s not easy.”

Abel replied, “Your group may believe in a more limited role for government as a general principle, but you advocate policies that contradict that principle. Take housing as an example. It is a private good that is heavily subsidized by the federal government.”

Cain tilted his head in an equivocating manner. “Let me stop you there. Are you asking whether our group supports federal underwriting of thirty-year mortgages? In principle, we shouldn’t. The federal government should have a minimal role in the exchange of private goods. As a practical matter, the entire housing market would collapse if the federal government did not underwrite most mortgages in the U.S.”

Abel interrupted, “But your group doesn’t support the federal government’s student loan program.”

Cain nodded, “That’s right. An education is a different type of good than a house. An education can’t be separated or alienated from a person. A house can. I would prefer that the federal government not be involved in the mortgage market, but few states have the resources to underwrite mortgages. Private banks prefer not to underwrite 30-year mortgages at low interest rates. Only the U.S. and tiny Denmark have 30-year mortgages at fixed interest rates (source).”

Abel said, “But the higher education market would collapse without federal student loans, grants and subsidies. That same practical reasoning supports the federal involvement in underwriting higher education loans.”

Cain shook his head. “Housing has a concrete public aspect to it. Education doesn’t. The Constitution specifies a role for the federal government. It is to provide for the ‘general welfare,’ not private welfare. An education is inseparable from a person’s private welfare.”

Abel objected, “But private welfare contributes to the general welfare. This is a sticking point between our two groups. Your group regards the general welfare as only those goods or services that are available to all. The sum of individual welfare is the general welfare.”

Cain replied, “Look, everyone who wants a subsidy claims that their private welfare will contribute to the public good. Car manufacturers want protective tariffs and subsidized loans, claiming that it will help preserve jobs. Ranchers want below market rates on grazing land for their catttle, claiming that they will be motivated to act as good stewards of that land and help preserve it. College students want subsidized loans and grants on the premise that their improved skills will contribute to a better society, a more productive work force.”

Abel argued, “But your group is more likely to support subsidies for ranchers and farmers.”

Cain shrugged. “The subsidy for grazing fees is about $100 million, according to one estimate. Americans have $7.5 trillion in federally backed mortgages at an interest rate that is at least 5% below market. That’s an indirect annual subsidy to homeowners of $350 billion, with a ‘b.’ Subsidies to farmers and ranchers are like drops in the bucket compared to the subsidies to homeowners. Divide that $350 billion by approximately 50 million federally backed mortgages and each mortgage holder gets an average annual subsidy of $7000. The federal government looks like it has deep pockets. Everyone wants to stick their hand in those pockets. It’s the road to ruin.”

Abel argued, “But the federal government has a long history of handing out subsidies. In the 19^th century, they gave out vast tracts of western lands to the railroads for pennies an acre. After the tracks were built the railroads sold the land to developers for many times what the railroads paid. Then the developers sold the land for many times that to homesteaders. Subsidies are a tool of government.”

Cain interrupted, “Tools to achieve what? Policy goals. Who sets those policy goals? The politicians in Washington. What is their policy goal? To get re-elected. How do they get re-elected? By gettting subsidies of some sort for their constituents. What is the sum of those individual efforts by elected officials? A government whose main purpose is giving out subsidies. There has to be some principle in place to limit that kind of largesse.”

Abel asked, “So what? End all subsidies? That is not going to happen. America binds all these regional interests together by handing out subsidies to homeowners, students, farmers, ranchers, people of every business type. In an earlier era, Senate leaders inserted earmarks for those senators who held crucial votes. Former OMB director George Shultz quipped, ‘the budget process was a fight of the parts against the whole and the parts always won.’ (Behn 1977, 109).”

Cain interrupted, “That practice promoted increased spending and deficits. When the government borrows money, that increases the money supply and inflation. Then the Federal Reserve has to fight inflation by adjusting interest rates. Higher interest rates causes a drop in investment which can raise unemployment. There’s just a whole cascade of economic effects.”

Abel argued, “In 2006, John Boehner, the former Speaker of the House, ended all earmarks in the House. Have deficits decreased? No, they have gotten worse. So has the polarization in the Congress and in the country. The public is like a pack of hungry dogs. Give each of them a little bit of meat and they won’t tear each other apart.”

Cain shook his head. “Tell the voters on the campaign trail that they are a bunch of dogs. The problem with your group is a lack of respect for the public and way too much respect for politicians and experts.”

Abel conceded, “Ok, maybe the hungry dogs imagery wasn’t the best, but look at the defense industry. It wields a lot of influence on Capitol Hill and your group is a big supporter of defense contractors. Defense is one of the few legitimate constitutional duties of the federal government, you say. Each individual representative in Congress votes for more defense spending if it will mean more federal tax dollars coming into their state. Each representative competes for defense dollars even if it is wasteful. It’s pork barrel politics.”

Cain said, “The saying goes, ‘something that can’t last forever won’t.’ The country can’t keep running deficits and borrowing money from the private sector. The interest on that debt keeps getting larger every year. It’s unsustainable. Deficit spending is a security issue. If and when a large war breaks out, the country will not be able to muster a strong response.”

Abel nodded. “Our group agrees that deficit spending is a problem. Your group thinks that earmarks are a big part of the problem. We don’t. Pork barrel politics joins people together. All the different constituencies in the country gather together to pull one of two ends of the rope. What we need is higher taxes on upper income households to afford those earmarks.”

Cain shook his head. “Higher taxes reduces investment.”

Abel interrupted, “So your group says. During the 1990s, both taxes and investment increased. In fact, investment increased at the highest pace since World War 2, and we had budget surpluses by the time Clinton left office at the end of the decade. Higher taxes do not reduce investment.”

Cain argued, “Look, the birth of the internet and the computer age was a special case. That exception does not support your case.”

Abel smiled. “Taxes and the effect of taxes is a whole other discussion. See you next time.”

Cain nodded and turned to leave. “Until then.”

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Photo by Anna Samoylova on Unsplash

A 2010 analysis by the Congressional Research Service found that few developed countries offer 30-year mortgages at fixed interest rates. https://crsreports.congress.gov/product/pdf/R/R41432/3

An analysis by the Center on Biological Diversity estimated an annual subsidy of $100 million to ranchers in below market rates for grazing fees. https://www.biologicaldiversity.org/programs/public_lands/grazing/pdfs/CostsAndConsequences_01-2015.pdf

Federally backed mortgages rose from $707 billion in 2009 to $5 trillion in 2010 and have risen steadily since then. https://fred.stlouisfed.org/series/BOGZ1FL403065005Q

Behn, Richard. 1977. “The False Dawn of the Sunset Laws.” The Public Interest (Fall): 103-118. doi: https://www.nationalaffairs.com/public_interest/detail/the-false-dawn-of-the-sunset-laws.

The Federal deficit as a percent of GDP https://fred.stlouisfed.org/series/FYFSDFYGDP

Tevlin, S., & Whelan, K. (2000). Explaining the investment boom of the 1990s. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.221415 In the seven-year period 1992-1998, investment growth averaged a record-breaking 11.2%. A copy of the paper can be found at https://www.federalreserve.gov/pubs/feds/2000/200011/200011pap.pdf

A Debate on Vulnerability

January 5, 2025January 4, 2025Leave a comment

This is eighth in a series of debates on various issues. The debates are voiced by Abel, a Wilsonian with a faith that government can ameliorate social and economic injustices to improve society’s welfare, and Cain, who believes that individual autonomy, the free market and the price system promote the greatest good.

Hope everyone enjoyed their holidays.

Abel began the conversation. “Last week neither of us were happy with the present structure of our government. I thought we could discuss a more fundamental issue, the duty of a government and the duties of its citizens.”

Cain nodded. “At the Constitutional Convention in 1787, the founding fathers fought bitterly about the duties of a federal government. Over two hundred years later, I don’t think we have come any closer to an agreement on this point.”

Abel said, “The scope of the federal government’s duties have expanded since Roosevelt and the Great Depression.”

Cain argued, “For decades, our group has been fighting that expansion. We have compassion for the vulnerable but caring for them is a proper function of state governments.”

Abel shook his head. “The Jim Crow era and the Depression taught us that state governments may be unwilling or unable to help the vulnerable. During the hundred years after the Civil War, southern states lacked any compassion for their black residents. During the Depression, the ranks of the vulnerable increased beyond the capacity of state governments. FDR and the Democrats recognized that and instituted job and relief programs to lessen the suffering and reassert some moral order.”

Cain replied, “It is still not clear that most of those programs did much good. The economy continued to flounder until this country entered World War 2. The federal government may be able to borrow the resources for relief programs, but Congress and the President try to design a one-size-fits-all solution. Only the states can design programs that are suited to the population, resources and economy of each state. Texas and New York have entirely different resources, cultures and economy.”

Abel argued, “But that variety produces a fragmented policy response. State representatives are easily influenced by well-funded interest groups and dominant voting constituencies that want to bend the rules in their favor. Minority populations can become severely disadvantaged.”

Cain argued, “Because of that fragmentation, it can be costly for interest groups and lobbyists to fund a campaign that encompasses more than a few states. Instead, they consolidate their resources in Washington where they hope to effect a centralized policy. Centralized policymaking promotes more lobbying. As the saying goes, ‘The road to ruin is paved with good intentions.’”

Abel insisted, “Your group prefers a more federalist, splintered approach to policymaking. Historically, that has led to unequal treatment of the citizens who live in a state. That abuse violates the 14^th Amendment as well as the principles of equality established in the Declaration of Independence.”

Cain nodded grudgingly. “Yes, there have been instances of abuse. Your group has used that unfortunate history to promote your vision of the federal government as the protector-in-chief of people’s welfare, animals, plants, the air and water. Social welfare programs embody the sentiment ‘From each according to his ability, to each according to his needs.’”

Abel shook his head. “That overstates our group’s position. We value compassion for the vulnerable, many of whom are victims of circumstance, heritage, and the bad luck of being a minority, a historically disfavored group to policymakers.”

Cain argued, “You absolve them of all responsibility for their choices.”

Abel insisted, “Their history as political pariahs and poor economic circumstances influence those choices. Our society bears a heavy burden there. Our group recognizes that.”

Cain said, “You want people to pay for policy mistakes a century or more old. You believe that white people are born with an original sin, guilty of the racist policies of bygone generations. Our group rejects that belief.”

Abel’s tone was more forceful. “Evidence illegally obtained is inadmissible in court. Evidence derived from that evidence is also inadmissible. That is the Fruit of the Poisonous Tree legal doctrine. Riches and advantages derived from property illegally obtained is tainted, yet many of us blithely reject responsibility. How many white people say, ‘Well, I did not steal my advantages or property. I was not yet born when some of these abuses were done. I bear no burden because I belong to a dominant racial, ethnic or cultural group.’”

Cain paused. “Ok, let me ask you. When is the debt paid? If there is a debt, it is finite, so when will it be paid? How much will have to be paid? Who will be assessed for that debt? If a person is 2% white, are they 2% responsible for the debt? Some racist policies were based on that same kind of thinking. A person of ‘mixed blood’ was treated as black and denied a loan or was excluded from buying a house in a certain area. We don’t want to repeat the sins of our fathers, so to speak, in making restitution for the sins of our fathers. The past is past. Let’s move forward.”

Abel argued. “It is not a debt. It is a duty to help the vulnerable, and those who have been wronged. Don’t you see? Some people move forward more slowly because they are weighed down by the policy sins of past generations.”

Cain scoffed, “We may recognize a moral, but not legal, duty to help the vulnerable. The parable of the Good Samaritan comes to mind. Should we legalize that duty and have the government enforce a charitable spirit on everyone? No. As to the abuses of the past, should the federal government give American Indians a lot of land back? Shall we have the National Guard evict a lot of American homeowners? No! The past is past. The Age of Conquest is over. We move forward.”

Abel said, “We can preserve areas like Bears Ears National Monument that is sacred land to an Indian tribe. We can enjoy it in its pristine beauty instead of drilling holes in the ground and installing bobbing black oil pumps.”

Cain shook his head. “Bears Ears is an example of a President overstepping his Constitutional bounds. Resources contained within a state are managed by the state unless Congress mandates otherwise. Congress, not the President. Congress passed a law that designated Yellowstone a National Park. President Grant signed the law that Congress passed.”

Abel argued, “In 1906, Congress passed the Antiquities Act, giving itself and the President the legal authority to designate national parks and monuments. Grand Canyon National Park was created under the authority of that act. Presidents are entirely within the bounds of their designated authority when they dedicate a section of land as a national monument.”

Cain smiled ruefully. “The focus of our argument is wandering. We began by discussing vulnerability and now we are discussing the scope of federal and Presidential authority.”

Abel returned the smile. “Vulnerable lands and artifacts on those lands, vulnerable Indian tribes, their cultures and beliefs. We are still talking about vulnerability.”

Cain replied, “Your group wants to take from those that have and give it to those who have not. Those policies do not raise the overall utility or the flourishing of a society.”

Abel said, “We want to improve the conditions of the least among us. Imagine two kids who have to decide how to divide some chocolate milk. The fairest solution is to have one child pour the milk into each glass, then let the other child get first pick of which glass they want. The child doing the pouring will try to make each quantity as equal as possible. A few decades ago, the philosopher John Rawls argued a similar proposition he called the original position. If we could choose the type of society we wanted to be born into without knowing what our place in that society would be, we would choose a society with a fairly even distribution of resources.”

Cain argued, “To implement those kinds of policies means that society has to take property from some individuals and give it to others. In trying to achieve one form of justice, society commits an injustice, a violation of the rights of private property.”

Abel replied, “Even though there is a violation of private property rights, governments can still attain a more just society. That is the principle behind a progressive income tax system. Take a higher percentage from those who have more and use those funds to help the least among us.”

Cain shook his head. “Not only are such policies a violation of property rights, but they are also a violation of individual privacy. To implement such policies, governments collect a lot of data on their citizens. That kind of personal intrusion is typical of totalitarian governments. George Orwell fictionalized such a government in his book 1984. When governments enact distributive policies, they commit many injustices in the pursuit of justice. The net gain is negative.”

Abel argued, “The U.S. is not the government portrayed in Orwell’s book. You are overstating the case. States and local governments collect much of the information on an individual. Why? So they can tax them. Water boards charge homeowners for the impervious area of their home. City governments regularly assess the value of one’s property for property tax.”

Cain held up his hand in a stop motion. “That’s information on property, not the individual. The amount of information gathered by the IRS is intrusive. Every aspect of a person’s life, including their work and family. It is typical of totalitarian governments. If there was any doubt that we are living under a totalitarian regime, all we need to do is look at the Covid lockdowns during the pandemic.”

Abel said, “Well, the country needed a unified response to a rapidly spreading pathogen. And yes, I agree that the information gathered is a bit excessive. Taxes are an unfortunate component of the social contract.”

Cain said, “A person’s work shouldn’t be taxed at any rate. It’s immoral.”

Abel shrugged. “Whether it is immoral is a matter of opinion. It’s the law, an amendment that is part of the Constitution. Killing people is immoral. When political leaders perceive a threat to the country’s security, they authorize killing. As this country’s population expanded in the late 19^th century, policymakers thought that the inadequacy of revenue from tariffs was weakening the government’s finances to the point where it could become a security threat. An income tax was ruled unconstitutional by the Supreme Court in 1895. Eventually, the states amended the Constitution.”

Cain returned to the totalitarian theme. “Lockdown policies during the pandemic scared a lot of people. They demonstrated the authoritarian reach of this government. Grandparents unable to visit with or care for their grandchildren. Scare tactics like ‘Little Johnny will spread the disease and kill Grandma.’ It was reminiscent of the Red Scare, the fear that left wing ideas would infect people’s minds.”

Abel nodded. “That’s a whole other discussion. Every year the Supreme Court hears cases that test the extent of the police power of the federal and state governments. We’ve wandered off topic again.”

Cain shook his head. “Many of these issues are interwoven or joined together like the threads in a spider’s web. What is fairness? How much control should a government exercise to protect the vulnerable? What should be the extent of the government’s role in the social contract?”

Abel smiled. “I like the spider web image. We pull on one thread and that affects the tension on the other connections in the web. Well, maybe next week we can look at the police power of government.”

Cain replied, “Or tax policy.”

Abel laughed. “I wished we could find something simple to talk about.”

With mock skepticism Cain said, “Like whether the toilet seat should be left up or down.”

Abel smiled. “See you next week.”

Cain waved goodbye.

///////////////

Photo by Ross Sneddon on Unsplash

In March 2009, in the depths of the financial crisis, historian Allan Winkler testified before the U.S. Senate Committee on Banking, Housing, and Urban Affairs on the effect of New Deal policies during the Depression. “The NRA alienated business, and never did encourage private expansion or investment. It may have halted the deflationary spiral, but it failed to create new jobs.” https://www.banking.senate.gov/imo/media/doc/WinklerTestimony33109TheNewDealSenateTestimony.pdf#page=5

In 2016, Barack Obama designated the Bears Ears National Monument in Southern Utah a national monument. Here is a video of some of the landscape from the Patagonia Company. You can read more about the controversy and legal skirmishes here https://www.npr.org/2022/08/24/1119310929/utah-sues-to-stop-restoration-of-boundaries-at-bears-ears-grand-staircase-monument

Exploitation as well as preservation were key motivations behind the passage of the Yellowstone National Park Preservation Act in 1872. https://www.nps.gov/articles/000/president-grant-and-the-yellowstone-national-park-protection-act.htm

A list of national monuments. https://geojango.com/pages/list-of-national-monuments

In his 1971 book, A Theory of Justice, the philosopher John Rawls argued for a more equal distribution of resources in society. https://en.wikipedia.org/wiki/A_Theory_of_Justice

The precedent underlying the Supreme Court’s 1895 decision that an income tax was unconstitutional. https://taxfoundation.org/blog/today-history-income-tax-ruled-unconstitutional-pollock-v-farmers-loan-trust-co/

More on the Red Scare and McCarthyism. https://millercenter.org/the-presidency/educational-resources/age-of-eisenhower/mcarthyism-red-scare

More on the Fruit of the Poisonous Tree doctrine https://www.law.cornell.edu/wex/fruit_of_the_poisonous_tree

A Debate on Immigration

December 29, 2024December 28, 2024Leave a comment

December 29, 2024

by Stephen Stofka

This is seventh in a series of debates on various issues. The debates are voiced by Abel, a Wilsonian with a faith that government can ameliorate social and economic injustices to improve society’s welfare, and Cain, who believes that individual autonomy, the free market and the price system promote the greatest good.

Wishing everyone a happy and flourishing New Year.

Abel opened the conversation. “I thought we might talk about immigration this week.”

Cain replied, “You mean illegal immigration.”

Abel said, “Our group doesn’t like calling people illegal. The only illegal act that many of these migrants have committed is crossing the border, a Section 1325 offense. That carries civil, not criminal, penalties.”

Cain shook his head. “You make it sound like a speeding ticket. If your group doesn’t like the term ‘illegal,’ we can refer to them as ‘illegitimate asylum seekers.’ Most of them are not fleeing persecution. They are jumping the immigration line. They are cheaters, taking advantage of the huge backlog in processing asylum claims.”

Abel shrugged. “Everybody cheats. Thousands of people and businesses fraudulently applied for Paycheck Protection checks during the pandemic. The bankers cheated the system and provoked the financial crisis that caused millions of Americans to lose their homes. Then the bankers claimed asylum from their own stupidity and recklessness and the government bailed them out.”

Cain’s expression was grim. “Our group did not approve of bailouts for bankers. It cost taxpayers billions, and they kept their bonuses. None were prosecuted under Obama’s watch.”

Abel argued, “No jail time for fat cats but your group wants to jail vulnerable migrants. Why don’t we put some of the migrants in the penthouses that the bankers bought with taxpayer money? Your group imagines a world where everyone plays by the rules. Like I said, everyone cheats.”

Cain shook his head. “They can wait in the immigration line like millions before them. Think of the people waiting in line outside of the U.S. for their immigration application to be processed. Illegals jump the line and claim asylum as they’ve been told to do by the cartels and coyotes. It’s an insult to those who are playing by the rules.”

Abel said, “Many recent immigrants have been coming from Venezuela. It is a failing state, ranked 28^th out of 178 states. Nicaragua, Columbia and Honduras are ranked in the sixties, putting them in the top third of vulnerable states.”

Cain nodded. “So, some of the Central American countries are stressed. Their economy is poor. Maybe there is some gang activity. When Congress passed the asylum law in 1980, the basis for a refugee claim was fear of persecution because a person belonged to some group. Their race, religion, nationality or membership in a social group made them a target. A parent might be worried that a local gang will target her son or daughter. I sympathize but that is not grounds for an asylum claim.”

Abel said, “The U.S. has been an economic leader because of our openness to immigrants. The Census Bureau recently reported that 83% of the net increase in population came from immigration. Our population is getting older. We are having fewer children. Our economic stability depends on immigrants to expand our workforce.”

Cain said, “Look, I agree that immigrants may become net contributors to our society and economy. But that takes a long time. Newly arrived immigrants at the southern border have so many immediate needs. That includes housing, health care and other social services. The kids need education. They make huge demands on a community before they make any notable contribution.”

Abel argued, “Many Americans are descended from immigrants who came from similar circumstances. It takes a lot of desire and gumption to tear up roots and start over in a new country. America became the world’s leader by welcoming people like that.”

Cain shrugged. “No doubt it takes heart, but many of our ancestors came over when governments provided far fewer social services.”

Abel said, “Your group wants to keep a balance sheet for each immigrant. How many services do they use? What taxes do they pay? The sum of a person’s contributions and withdrawals from the community cannot be summed up so easily.”

Cain agreed, “The accounting is not perfect, I’ll admit, but policymakers need some concrete measures to evaluate the policies they implement.”

Abel argued, “Let’s go back to the peak years of European immigration in the late 19^th century and early 20^th century. Many of those immigrants were exploited by employers and landlords. In the late 19^th century, Jacob Riis published pictures of the slum conditions in New York City. Immigrants lived in cramped conditions without proper water or sanitation. They worked in sweat shops and factories where they had few safety protections. Any ‘contributions’ they made to society were skimmed off by unscrupulous employers and landlords.”

Cain was adamant. “You think that kind of exploitation has stopped? Migrants working seasonal harvests under the H-2A visa program are often housed in accommodations with minimal standards. Their status affords them little bargaining power, so they are under the control of the subcontractor who employs them or the farmer that engages the subcontractor. Employers want cheap labor.”

Abel said, “Tighter borders controls in the past few decades have made it impractical for some seasonal workers to follow the harvests in Mexico and the U.S. They have stayed behind in the U.S., supporting their families in Mexico from afar. They pay taxes but are not entitled to retirement benefits even after twenty or thirty years of working in the U.S. If they are cheating the system, they are doing a terrible job. They are funding benefits to native Americans.”

Cain continued, “Your group advocates policies that only encourage labor exploitation, whether you mean to or not. Immigrants increase the supply of labor and lower wages for native Americans. It’s Econ 101. Supply and demand.”

Abel disagreed, “Lower wages would increase the supply of goods and lower prices. That’s also Econ 101. Immigrants increase demand for the very goods they help produce. That increases employment and reduces the unemployment rate for native workers with low-skills.”

Cain shook his head. “I disagree. At any rate, social services for illegal immigrants are costly. Sanctuary cities like Denver and New York City have discovered just how expensive and disruptive these immigrants can be. The mayors complained when Texas and Arizona sent them some of the thousands of immigrants that cross the border every day. Policymakers in those cities sure got a taste of the problems that border states are dealing with.”

Abel sighed, “It was a political stunt by Abbott, the governor of Texas.”

Cain replied, “Martin Luther leading a bunch of black people across the Edmund Pettus Bridge in Birmingham was also a ‘political stunt.’ A better word is ‘protest.’ Busing illegal immigrants to other cities was a legitimate form of protest for Texas and Arizona.”

Abel argued, “Citizens protesting government abuse is a protest. When one state uses people as a political hot potato with another state, that’s a stunt.”

Cain shook his head. “Texas and Arizona have long complained about federal immigration policy. All those words fell on deaf ears in Washington. Actions do speak louder than words. Liberal states like Colorado and New York woke up to the reality of immigration policy when they had to deal with the problem in a concrete way.”

Abel insisted, “States should be working their policy disagreements out in Congress. Abbott’s stunt was sophomoric and vindictive.”

Cain replied, “Congress has been at a stalemate for years. The states have to take matters into their own hands where and when they can. The immigration system has been broken for years because Congress wants it broken. A persistent problem gives politicians an issue they can campaign on. Why is the minimum wage not indexed to inflation? Because Congress wants to fight over it.”

Abel asked, “So what does your group propose? Close all the borders?”

Cain said, “This country was founded on federalism, a compact between the states. The border states should have more autonomy in border control.”

Abel scoffed. “That won’t work. Immigrants will go to the border state with the most relaxed controls. Once they are in the country, they can move to another border state.”

Cain shook his head. “Make it illegal. If California lets in an illegal, that person has to stay in California for five years or so.”

Abel sighed. “How will the states enforce that? Each state would have to implement border controls on each highway going into their state. It’s not practical. The only practical policy solution is a unified federal response from Congress.”

Cain said, “Then the problem will plague this country forever, particularly Texas, Arizona and California. Congress doesn’t compromise on a solution until it becomes a crisis.”

Abel said, “Now we are getting to the heart of the matter. The two parties have created a political system that cannot craft coherent policies to address our problems. Americans suffer. They get cynical. Only 60% vote in a Presidential election. Only 20% may vote in a primary. Most of them tune out of politics because it’s a maze with no exit.”

Cain’s tone was resolute. “Then we need to fundamentally alter our system. The states need to call for a Constitutional Convention and bypass this dysfunctional Congress.”

Abel said, “That movement grew in popularity during the 1960s and 1970s. It seems to be gaining popularity recently. Maybe that’s the only solution. I’m afraid the two-party system that cripples our policymaking today will subvert a convention.”

Cain turned to leave. “That’s a discussion for another day. In a first ‘past the post’ election system, two parties are inevitable. The convention would have to implement a Parliamentary system, I suppose.”

Abel waved. “See you next week.”

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Photo by Greg Bulla on Unsplash

Jacob Riis’ photos uncovered the abuses of immigrants in the Gilded Age. https://www.britannica.com/biography/Jacob-Riis

The Census Bureau’s recent report on population growth. Most of the 1% increase in population came from immigration. https://www.census.gov/newsroom/press-releases/2024/population-estimates-international-migration.html

Many undocumented immigrants are not eligible for federal subsidy programs. A state may allow them to participate in a particular program administered by the state. https://www.nilc.org/resources/overview-immeligfedprograms/

In a 2015 analysis of 2000-2010 data, Andri Chassamboulli and Giovanni Peri found that “increasing deportation rates and tightening border control weakens low-skilled labor markets, increasing unemployment of native low-skilled workers.” The incoming administration assumes that the opposite is true, that tougher border policy will strengthen low-skilled labor markets. https://www.sciencedirect.com/science/article/abs/pii/S1094202515000514

The New York Times related the stories of several aging farm workers. https://www.nytimes.com/2023/12/05/us/aging-undocumented-farmworkers.html

A Colorado Public Radio report on the difficulties and cost of treating newly arrived immigrants. https://www.cpr.org/2024/03/19/colorado-new-immigrant-population-adds-strain-to-hospital-system-already-stretched-thin/

An explainer of the H-2A worker program from the U.S. Citizenship and Immigration Services. https://www.uscis.gov/working-in-the-united-states/temporary-workers/h-2a-temporary-agricultural-workers

The Congressional Research Service investigated the mechanisms of calling a Constitutional Convention and a range of issues that the convention would debate. https://crsreports.congress.gov/product/pdf/R/R42589/15

A Debate on School Vouchers

December 22, 2024December 19, 2024Leave a comment

December 22, 2024

by Stephen Stofka

This is sixth in a series of debates on various issues. The debates are voiced by Abel, a Wilsonian with a faith that government can ameliorate social and economic injustices to improve society’s welfare, and Cain, who believes that individual autonomy, the free market and the price system promote the greatest good.

Wishing everyone a happy holiday this coming week.

Abel said, “Last week, we spoke about higher education but let’s look at the K-12 system. Your group advocates for school choice and a voucher program. For each school age child, the government gives families a voucher that can be applied to their school of choice.”

Cain replied, “There are a number of voucher programs in various states and studies have found an overall positive effect on student learning.”

Abel argued, “Our group is concerned that the costs outweigh the relatively small benefits. The key feature of those programs is parental freedom, your group says, but those taxpayer dollars are taken from established public schools to fund private schools. If voucher programs are more widely adopted, existing schools will have less money for capital improvements and repairs, forcing some to close. Lower enrollment causes public school districts to consolidate their students and close some. School choice transfers resources from one publicly funded school system to another.”

Cain insisted, “Parents are taxpayers. Many are homeowners whose property taxes are the main source of funding for public schools. Parents should have some control over where their property taxes are being spent. A voucher system allows parents to direct funds to those schools which serve their children best and away from low-performing schools or schools that do not provide a safe environment.”

Abel said, “Our concern is that parents will direct funds to those schools with students from similar backgrounds, effectively segregating the schools. As I mentioned last week, parents might choose schools with a curriculum that does not challenge their child in a particular subject like math.”

Cain shook his head. “Your group has too much faith in ‘experts.’ You readily overlook the many policy mistakes that education experts have made. The ‘new math’ that de-emphasized rote learning of arithmetic is one example. Kids got out of school and couldn’t make change when working in a retail store. In the 1970s, schools tried the ‘open classroom’ concept, a model based on the one-room country schoolhouse. Imagine the noise and distraction when fifty to sixty kids of various grade levels were squeezed into one big room and learning multiple subjects.”

Abel nodded. “I’ll grant you that there have been policy mistakes. Your group has a faith in the wisdom of crowds. That’s the idea underpinning the free market and democracy. Our group is concerned about what Garret Hardin called the ‘Tragedy of the Commons.” The sum of individual actions can produce a result that is harmful to the group as a whole. Overgrazing and overfishing are prime examples.”

Cain interrupted, “I’ll grant that the Tragedy of the Commons can be a problem. Our group worries about the ‘Tragedy of Group Think.’ Policymakers of like assumptions, values and policy preferences are attracted to each other like magnets. They implement some policy and overdo it. Their biases and loyalty to their political group make them unable to honestly evaluate the results of their policy. They become increasingly focused on countering any political opposition to their policies.”

Abel shrugged. “Yes, our system of checks and balances can be like a tired defensive line in the fourth quarter. Our group worries that the tragedy of the commons will become more acute as the population concentrates in urban areas. As our technology and communications become more powerful, there is a greater likelihood that people synchronize their decisions and actions. The sum of those actions creates a negative feedback loop that creates the very circumstances that people fear.”

Cain’s said, “The problem with ‘top-down’ policymaking is that an interest group can influence policy to best meet their self-interest. The teachers’ union is a prime example. They have joined forces with a deep educational bureaucracy to take over the public schools. Administration is no longer responsive to parents’ concerns. When bad teachers get paid to sit and do nothing in so called ‘rubber rooms,’ that is a waste of taxpayer dollars and an insult to hard working parents.”

Abel shrugged, “A few bad teachers make the headlines, and your group uses that as an excuse to condemn all public-school teachers. Does one bad soldier make you condemn all soldiers? No, of course not. Most teachers work hard. They care about the kids. They make personal sacrifices and financial sacrifices.”

Cain objected, “It’s the teachers and administrators spreading their liberal ideology when the schools should be teaching reading and math skills.”

Abel sighed. “Now we are getting to the heart of the debate. How do kids learn to read? By reading. Your group objects to some of the material the kids read in class. Your group wants to hover over teachers’ shoulders, approving or disapproving of each piece of reading material. In 2023, Florida passed a law that allowed anyone in a school district to challenge the appropriateness of a particular book. Schools often remove a challenged book from their shelves while the book is under review. School districts insist the books are not banned – only temporarily removed.”

Cain made a ‘stop’ motion with his hand. “Most of those objections were raised by a single advocacy group. Florida passed a law in 2024 permitting only parents to raise an objection.”

Abel protested, “An advocacy group could enlist the help of a parent and raise an objection. Call it whatever euphemism you want; the policy effectively bans books.”

Cain argued, “Look, the responsibility for rearing children resides primarily with the parents, not the state. Only if the parents are unfit can the state override that fundamental right.”

Abel nodded. “But a school acts on behalf of parents when children are in their custody and care. A school cannot satisfy the preferences and ideologies of every parent who sends their child to a school.”

Cain answered, “Should an unelected bureaucrat decide what is appropriate material for a library shelf in a K-12 school? Under that system, a small committee of bureaucrats can promote homosexuality or transgender issues, pushing their personal agenda on the community. Our group prefers that parents make decisions about their children, not some supposed expert.”

Abel replied, “Teachers are promoting tolerance for others who may look or act different than the majority. In a classroom with children from different family structures, cultures and faiths, tolerance is an important character trait. In the Christian tradition, Jesus taught tolerance of those ostracized by their society – the leper and prostitute, for example. The Founding Fathers enshrined tolerance in the First Amendment, protecting speech and religion against government intrusion.”

Cain said, “As public institutions, public schools might have some Constitutional obligations that private schools don’t have. That is why some parents want the option of sending their children to private school.”

Abel interjected, “At taxpayer expense.”

Cain disagreed, “Parents are the taxpayers. Naturally, they don’t want to pay property and sales tax for public schools, then pay again to send their children to a private school.”

Abel argued, “Look, a voucher program is an ‘end-run’ around the Constitutional separation of church and state. The exchange of a voucher between a parent and a school does not obscure the fact that taxpayer money is funding the school. If the school is religious, that is a violation of the First Amendment.”

Cain said, “Is it? The term ‘separation of church and state’ was coined by Thomas Jefferson and is not in the Constitution. The text of the First Amendment is that the government can not inhibit or promote a religion. In a 1971 case, Lemon v Kurtzman, the Supreme Court established the ‘Lemon test’, a three-part test as to whether a particular law violates the Establishment Clause of the First Amendment. In our opinion, school vouchers pass that test and do not violate the Establishment Clause any more than giving property tax exemptions to religious schools. In a 2002 decision, the court ruled that an Ohio voucher program was legal.”

Abel argued, “That Lemon case was a unanimous 8-0 decision. The 2002 case was decided 5-4. by the same slim conservative majority that handed George Bush the 2000 Presidential election.”

Cain objected, “Supreme Court decisions form legal precedent no matter what the ‘score’ was. The justices on the present court are even more conservative now.”

Abel said, “This year, the South Carolina Supreme Court found that a voucher program violated their state constitution. Obviously, the legality of voucher programs is not settled. To our group, the issue seems more like judicial political preference than judicial precedence.”

Cain replied, “A voucher program may violate the text of a state’s constitution, but it doesn’t violate the federal Establishment Clause.”

Abel raised his hand. “Let’s move on from the legality of it and return to the taxpayer expense aspect. Many private schools are exempt from state and local property taxes so the loss of that tax revenue is a taxpayer expense. Lower attendance in the public school system prompts school districts to consolidate and close some of their schools. Taxpayers have an ongoing expense to maintain or dispose of those buildings. School choice robs Peter to pay Paul, as the saying goes.”

Cain said, “Adopting any new policy of modifying an existing system incurs costs. A public expense may affect some taxpayers differently than others. That is the nature of a public expense and it’s why people often disagree on funding for public improvements. For instance, a district or county allows the building of new subdivisions. Then the county has to build a larger sewage treatment plant to process the extra waste from those residences. When the county proposes a special property tax assessment to pay for the plant, homeowners in older portions of the county object. They feel like most of the cost should fall on those newer homeowners.”

Abel replied, “Your example is about an addition to an existing system. School choice involves replacing, not adding to, existing public schools.”

Cain said, “A distinction without a difference. Often the schools that are closed have served their useful life. In other words, they are fully depreciated and would require a lot of ongoing expense to maintain or upgrade to current building codes. In that sense, private schools save taxpayers the burden of that expense and allow them to sell the property to a buyer who will maximize its usefulness.”

Abel insisted, “Often those closed schools are in low-income areas. A voucher may not fully reimburse a parent who wants to send their child to a more expensive school in a nearby district. School vouchers can further separate families by socio-economic status. Even if vouchers pass the court’s Lemon test, they will not afford all families equal access to the K-12 school system.”

Cain argued, “The vouchers would all be for the same amount within that geographical area. That’s equal access.”

Abel replied, “Equal access is not equal opportunity. The equality of the voucher amounts would not violate the text of the Fourteenth Amendment, but they would violate its spirit of equality.”

Cain turned to leave. “That equality issue is a Pandora’s box of different interpretations. We’ll cover that another time.”

Abel waved. “See you next week.”

/////////////////////

Photo by Julia Morales on Unsplash

New math focused on student comprehension of math concepts rather than rote learning of arithmetic skills like multiplication tables https://en.wikipedia.org/wiki/New_Math. Without fundamental skills in arithmetic, however, students struggled to understand conceptual relationships between quantitative measures.

Here is a recent article on Australia’s current experiment with the open classroom concept. https://en.wikipedia.org/wiki/Open_classroom. Montessori schools have a non-traditional design with class sizes of twenty to thirty students. https://amshq.org/Families/Why-Choose-Montessori/Montessori-FAQs

This Wikipedia article on the Tragedy of the Commons notes that Garret Hardin did not invent the concept but his 1968 article in Science brought widespread attention to the problem. https://en.wikipedia.org/wiki/Tragedy_of_the_commons

This article from the Fordham Institute contains links to several studies of voucher programs in the states. https://fordhaminstitute.org/national/commentary/impact-voucher-programs-deep-dive-research In Troxel v. Granville, 530 U.S. 57 (2000), the Supreme Court held that, under the 14^th Amendment, parents have a fundamental right to “oversee the care, custody and control of a child.” https://supreme.justia.com/cases/federal/us/530/57/. Schools have an “in loco parentis” duty to act on behalf of the parents when the child is in the school’s custody, but states cannot supersede the fundamental rights of the parents “until a parent is proven unfit.” See https://www.supremecourt.gov/DocketPDF/20/20-618/162853/20201207145434898_20-616%20Amicus%20Brief%20The%20Justice%20Foundation%20cert%20stage.pdf.

Innocent Investor

A helpful understanding

Author: sgstofka

A Debate on Presidential Power

The Carousel of Political Appointees

A Debate on Tariffs

A Debate on a VAT tax

A Debate on Income Taxes

A Debate on Subsidies

A Debate on Immigration

A Debate on School Vouchers