Monday, August 13, 2012

The John Galt Election

So in the middle of a balance sheet crisis,  Romney went off and chose a courageous budget wonk for his running mate. Thank God. If he'd chosen someone like Tim Pawlenty, I might not have voted from sheer boredom. In choosing Paul Ryan, he's created an interesting test for all of us.

What can productive people expect from their fellow citizens?

France had that same test and they responded by electing the socialist Francois Hollande who campaigned on looting the rich. The rich responded by moving their wealth offshore and why not? Their fellow citizens had emptied the treasury, debased French bonds and were lusting after the fruits of their labors. Only an idiot wouldn't take steps to protect their wealth.

So that leads back to the US election. As an individual, I will strongly support Romney/Ryan, but at the same time I'll start thinking about my future plans should Obama/Biden win. This blog has spent the last several years chronicling just what happens to countries and people that don't practice self-control. Our potential future is no mystery at all. As it is, I've been spending a lot of my free time developing new, marketable skills just in case I lose my job. If Obama is reelected, I'll be doing more than that and I won't be alone.

Spain, this year. The Spanish are a literate, civilized, cultured, Western people and they've driven their nation into total bankruptcy. This is what it looks like when a nation goes bankrupt.

Ignoring the politics for a bit, think of what the rest of the country is telling productive Christians if they elect Obama. You're going to be our pack mules, guys. We have no intention of paying off our debts. Stockton and San Bernardino are just the beginning. Our bond ratings are heading down and the only way we'll be able to service our loans is by printing trillions. Religious freedom protections are going to be stripped away until you're a big, fat target for every atheist or gay crackpot with a lawyer. In short, we're going to get what we want and you're going to pay for it.

Amidst all of this hate and envy, there's one question they're not asking themselves.

Who is John Galt?


tim eisele said...

OK, here is my concern:

I am not convinced that Romney/Ryan really have any intention of reducing the deficit. Sure, they want to cut spending, but they also keep going on about *cutting* taxes (as opposed to holding them constant), which strikes me as completely counterproductive. If you find yourself in a financial bind, going to your boss and offering to take a pay cut is not a useful strategy to get out of it.

And I do not want to hand over the control of government to a single party. This almost always ends badly. The whole idea of "the enemy of my enemy is my friend" that partisanship is fundamentally founded on, is a crock. Just because hyenas and lions are enemies, doesn't make either of them a friend of the zebras.

As long as the two parties are savaging each other the rest of us can manage, but as soon as one or the other gets the upper hand, they immediately turn and start savaging *us*. As we have all seen, to our cost, coming from both ways over the last decade alone.

Secular Apostate said...


Your comment is pretty strange in a couple of ways.

First, you seem to not understand the difference between tax rates and deductions. Deductions are designed to steer behavior in government-approved directions. You can, in fact, lower rates, eliminate deductions, and raise total revenue. For example, CNN reported that the elimination of the mortgage interest deduction alone would increase tax revenue by $131 billion in 2012. That's 10% of the deficit right there. But you know that. I know you do.

Second, no one will hold you personally responsible for "handing over the government to a single party". Unless I miss my guess, you have one (1) vote that you can allocate among several candidates. So go ahead and vote for whomever you like the best, and don't worry about installing a junta. I'm tempted to think "straw man", but I'll give you the benefit of the doubt.

tim eisele said...

"Unless I miss my guess, you have one (1) vote"

No, at the federal level I have four votes: one for president, two for senators, and one for a representative. I can spread those around amongst parties as much as I like.

"You can, in fact, lower rates, eliminate deductions, and raise total revenue. For example, CNN reported that the elimination of the mortgage interest deduction alone would increase tax revenue by $131 billion in 2012."

That's true enough. The question is, though, is that what either Romney or Ryan are proposing? Did they actually come out and say which deductions they want to eliminate? Can they show the math where it is revenue-neutral, and not just hand-wave that they can get enough for a 20% cut?

I've been playing with this a bit, and while it is certainly possible to balance the budget, anything that reduces the tax revenues even slightly makes it a lot harder.

K T Cat said...

Tim, I'm not sure what more Paul Ryan needs to do to show he's serious. He introduced a definitive budget into Congress and got it passed. If there's something more than that, I'd like to know what it is.

The other side has nothing. No budget at all. 1-1.5T deficits as far as the eye can see. I don't get how the choice can be difficult or even vaguely conflicted.

Secular Apostate said...


"No, at the federal level I have four votes: one for president, two for senators, and one for a representative. I can spread those around amongst parties as much as I like."

Really? I'm amazed!

But seriously, that's actually what I meant when I said "you have one (1) vote that you can allocate among several candidates." I suppose it was poorly worded, but I really did know that you can vote for different candidates. I swear. Ask my Mom.

"[...] is that what either Romney or Ryan are proposing?"


From the WSJ: "Mr. Romney, the presumptive Republican nominee for president, said he would eliminate or limit for high-earners the mortgage interest deduction for second homes, and likely would do the same for the state income tax deduction and state property tax deduction."

FYI, I found that (along with 693,000 roughly similar hits) by typing "romney eliminate tax deductions" (minus quotes) into Bing. You, too, can do this. :-)

And the "this" you're playing with is a static analysis that does not account for behavioral changes resulting from tax policy. Which is weird, since much tax policy, if not most, is written specifically to change behavior (ex. "green" deductions, ethanol, home mortgage, etc.). Your "this" from CRFB is Taxville for Kids.

tim eisele said...

I don't know how to say this so that you get my point.

Look, I am not a democrat. I don't particularly like the Democratic party, and when they are in power they are a pox upon the land. I agree that their record on deficits and taxes is abysmal.

But the Republican party has stabbed me in the back before. I voted for G.W.Bush in 2000 because I thought he was fiscally responsible and generally sensible about the role of government. And then when he got elected, he promptly ran up the deficit by pushing through a tax cut without a corresponding decrease in expenditures. And then just for frosting he rammed us into two expensive, protracted wars when one would have done, and created the expensive Homeland Security/TSA monster that now exists almost entirely to pointlessly harass people at airports.

It is pretty clear that the only reason that the Republicans looked "fiscally responsible" during the Clinton years, is because both parties were so deadlocked that neither was able to ram through their respective horrible and expensive ideas. The Republicans currently are taking the lead on a responsible budget, but only because that's the tool they use to fight with Democrats. Once they feel they've beaten the Democrats, they will drop their responsible budget facade like a shot. Just like last time.

Secular Apostate said...


We agree on the duplicity of the Republicans. And we agree on the value of deadlocked government.

But, as individuals, we can't control or even significantly influence the balance of power.

Mitt Romney was not my choice in the primaries. I fear he's a Massachusetts technocrat.

Having said that, there is not a scintilla of doubt in my mind that he will be a far better President than Barack Obama has been. YMMV.

But voting against one's own interest in some quixotic effort to influence a "balance of power" in DC is, not to put too fine a point on it and IMNSHO, crazy.


Doo Doo Econ said...

You are right on when you point to the CNN style static analysis. Raising taxes reduces the production frontier, even when succesfully done. Govt is simply inefficient with money. The less spending and taxes, the better the economy.

There has been no example of govt spending fixing the economy. Productive govt expenditures are rare. Govt revenue went up due to the interstate highway system as increased trade increased tax revenue. That was due to individuals acquiring cars instead of buggies.

Now that we have highways, additional expenditures return about 5 cents on the dollar. There just is no govt "investment" on the horizon that is productive across the entire nation. So stop the spending and cut taxes and allow money to be used productively by individuals. Central planners are just too stupid to "invest" our money.

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