Ronald Reagan, Ron Paul, & the Fed: Q&A with David Stockman

At the very start of the "Reagan revolution," David Stockman exposed the myth that Ronald Reagan and the modern Republican Party are dedicated to small government.

In 1981, the 35-year-old Stockman gave up his Michigan seat in Congress to become Reagan's budget director. A vocal critic of what he continues to call the "welfare-warfare state," Stockman had signed on because he believed in the limited government rhetoric that Reagan espoused. Once inside the White House, Stockman quickly became disenchanted, and gave an interview to journalist William Greider that became the basis for an explosive Atlantic Monthly article in which Stockman admitted that Reagan’s proposed spending cuts had been a “Trojan horse” used to justify tax cuts. In his 1985 memoir, The Triumph of Politics, Stockman chronicled Reagan’s reluctance to fulfill his campaign promise of shrinking the size and scope of government and balancing the budget. The result? The gross federal debt tripled while Reagan was in office.

Last fall, Stockman was the GOP-defector du jour once more, arguing against extending George W. Bush's tax rates in the New York Times, on 60 Minutes, the Colbert Report, Parker-Spitzer, ABC, NPR, and MSNBC. Stockman’s argument - that it’s irresponsible to cut taxes when cumulative U.S. debt is steadily mounting as a percentage of GDP - is based on the simple principle that balanced budgets come only when revenues actually meet expenditures. If we're not willing to actually shrink government spending, he says, then we should pay full freight now, rather than forcing our children and grandchildren to foot the bill down the line.

Here's what didn’t come across in Stockman’s media blitz: Since writing The Triumph of Politics he says he has “completed his homework” by reading libertarian economists such as Ludwig von Mises, Friedrich Hayek, and Murray Rothbard. He thinks TARP was a big-government boondoggle and the bailouts of GM and Chrysler unconscionable. Stimulus spending is a hoax. He sees the abandonment of the gold standard in favor of floating exchange rates as the root cause of both the country’s fiscal problems and the 2008 financial crisis. He says that Rep. Ron Paul (R-Texas) is the only politician today “who gets it" and he's hopeful that Paul's growing power may begin to shed light on “the scholastic arrogance” of the Federal Reserve. He's still against the welfare-warfare state and he thinks government should be cut down to size.

Reason.tv’s Nick Gillespie sat down with Stockman for a wide-ranging discussion that touched on tax cuts, monetary policy, TARP, Ronald Reagan, his tenure as a Michigan Congressman, and the gold standard.

Approximately 42.00 minutes. Click here for a 8.30 minute version of the interview.

Camera by Jim Epstein and Hawk Jensen. Edited by Epstein and Joshua Swain.

Go to Reason.tv for downloadable version of this and all our videos and subscribe to Reason.tv's YouTube channel to receive automatic notification when new material goes live.

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  • ||

    All I can say is that I hope Ron Paul has good bodyguards. There are some seriously dangerous people who have a lot invested in the "scholastic arrogance" of the Fed.

  • Vince Foster||

    You're telling me?

  • John Wheeler||

    Conspiracy theories are so 90's.

  • John P. Wheeler III||

    I'm starting to believe them myself

  • hp cart||

    I am pleased to see your views. Thanks

  • Spiny Norman||

    The people in power want you to believe in conspiracy theories to distract you from what's really going on.

  • ||

    Get used to disappointment.

  • Tim||

    That would make a great slogan for the Libertarian party.

  • More like||

    Get used, and disappointed

  • fuck off||

    Heller

  • Fuck Off ||

    Heller

  • Fuck off ||

    heller

  • Tim||

    Welfare/warfare let's call the whole thing off.

  • Unic||

    I think I know where you are going with this...

  • fuck off||

    Heller

  • Fuck Off ||

    Heller

  • Fuck off||

    heller

  • BakedPenguin||

    C'est bon que les femmes ne supportent pas la guerre!

  • BakedPenguin||

    Merde. "soutient pas"

  • The Gaul||

    "Putaine de Bloggeur".

    Il n'y a pas de quoi a remercier.

  • fuck off||

    Heller

  • Fuck Off ||

    Heller

  • Fuck off||

    heller and I wouldn't fuck you ever not even with Epi's dick

  • cynical||

    The heads of our nations politicians?

    Can the knife at least be rusty?

  • ||

    Reagan’s spending cuts had been a “Trojan horse” used to justify tax cuts. In his 1985 memoir, The Triumph of Politics, Stockman chronicled Reagan’s reluctance to fulfill his campaign promise of shrinking the size and scope of government and balancing the budget.

    Reagan's reluctance to shrink government? Because he vetoed all of those spending reductions that the Democrats put on his desk for signing?! Sure, he didn't lead the way but is there really any possibility that the Democrats would have followed? In other words, he didn't waste any political capital trying to make people feel good about something that wasn't going to happen.

    I guess this guy also thinks that Bill Clinton "balanced the budget" against the wishes of a Republican Congress. Cause some Presidents are magic that way!

  • Grace Commission||

    Our report was treated like a leper's excrement.

  • ||

    Clinton did balance the budget against the wishes of the GOP.

    The 1993 Budget Reconciliation Act both cut spending and raised taxes and was the primary budget balancing mechanism over the 90's - and got zero GOP votes.

    I know you don't like how he did it but its true.

  • sevo||

    shrike|1.3.11 @ 8:32PM|#
    "Clinton did balance the budget..."
    Do you ever post without a lie?

  • ||

    Overall, the 1993 Budget Reconciliation Bill was expected to shrink, but not eliminate, the deficit. Annual deficits, however, have shrunk dramatically since the measure was enacted--indeed they have shrunk much more than anyone, including the Clinton administration, predicted. Every year during the Clinton administration the federal government has produced a budget with a lower deficit or higher surplus. In a development that would have been thought impossible just a few years ago, there were budget surpluses from 1998-2000, the first years since 1969 that the federal government has not run in the red. In 2000 the federal government had a surplus of a staggering $236 billion, the eighth consecutive year with a declining deficit or increased surplus, a postwar record (see Table 3).

    http://goliath.ecnext.com/coms.....-1993.html

  • sevo||

    Nice try, now tell us about something other than current deficits, bozo.

  • John Wayne Bobbit||

    It worked for me!

  • Realist||

    Stockman is still an asshole. Never raise taxes.....cut spending!

  • BakedPenguin||

    Why is cutting spending an asshole idea?

  • ||

    How anyone in their right mind could think that we aren't spending insanely too much is beyond me. On top of the excessive spending, the inefficiency of government spending in accomplishing any important goal is staggering as well.

  • CatoTheElder||

    We should all thank God that government is inefficient. Can you imagine how destructive it would be if it were efficient?

  • ||

    Indeed, but it's still an excellent reason for not letting government spend much money.

    Incidentally, our system was designed to be inefficient. So efforts--futile as they may be--to make it more efficient subvert the very foundations of the body politic.

  • Realist||

    "Why is cutting spending an asshole idea?" It's not, it is the right thing to do. Stockman said the tax cut extension was the wrong thing to do. So I say never raise tax, cut spending instead.

  • Realist||

    Right up front, at the 28 second point, he says he is against extending the Bush tax cuts because spending has not been cut. Then be adamant about about spending cuts...don't raise taxes!

  • cynical||

    If you link them together, you might find that a lot of people value low taxes more than high spending. As it stands now, a lot of people don't feel like they have to choose.

  • Chinny Chin Chin||

    Camera by Jim Epstein and Hawk Jensen

    I'm going to guess the guy named "Hawk" is the A cam, and Epstein gets the coffee?

  • ||

    Cut the spending and the taxes will follow. I would like drastic cuts in both, but if I can only have one I would rather it cut the spending.

  • Tony||

    he says he has “completed his homework” by reading libertarian economists such as Ludwig von Mises, Friedrich Hayek, and Murray Rothbard. He thinks TARP was a big-government boondoggle and the bailouts of GM and Chrysler unconscionable. Stimulus spending is a hoax. He sees the abandonment of the gold standard in favor of....

    What is with you people and your obsession with a shiny yellow rock? It's obvious that it's possible to become dumber by reading more.

  • Douglas Fletcher||

    So what's your excuse?

  • Patriot Mike||

    Shiny yellow rock? Your ignorance of the Constitution is showing. Again. Article 1, Section 10 - "...No State shall make any thing but gold and silver coin legal tender in payment of debt"...

  • Tony||

    The whole purpose of that section is to impose a limit on state powers--reserving things such as making money for Congress.

    To rephrase my earlier point: a little education can be worse than none at all.

  • CatoTheElder||

    Section 8

    "Congress shall have Power to ... coin Money, and regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures".

    The standard of weights and measures applies to the precious metals content and alloy of US Coin. It’s no coincidence that, immediately after adoption of the Constitution, Congress commissioned Alexander Hamilton to report on the standards of foreign coinage and to define the dollar. His report defined the Dollar in terms of silver.

    It is absurd to interpret these enumerated powers as authorization to establish a fiat currency. How on earth could Congress regulate the value of a fiat currency versus "foreign Coins" of precious metal or foreign fiat currencies? Sure, the US Treasury has tried to do this over and over again, but they have never been successful for more than a few years. Note also that Section 8 empowers Congress to coin Money, not to print Money.

  • Tony||

    This is another in a long list of silly objections to reality that libertarians have. The constitution has not been interpreted to forbid printing money, and if it were, it would have to be changed. "Because the constitution says so, according to some fringe interpretation that nobody but kooks accept" is not a rationale for anything.

  • CatoTheElder||

    By "kooks", I suppose you mean people like James Madison, who in Federalist Papers #44 condemned "the pestilent effects of paper money on the necessary confidence between man and man".

    That kook, Madison, also wrote:

    "The right of coining money, which is here taken from the States, was left in their hands by the Confederation, as a concurrent right with that of Congress, under an exception in favor of the exclusive right of Congress to regulate the alloy and value. In this instance, also, the new provision is an improvement on the old. Whilst the alloy and value depended on the general authority, a right of coinage in the particular States could have no other effect than to multiply expensive mints and diversify the forms and weights of the circulating pieces. The latter inconveniency defeats one purpose for which the power was originally submitted to the federal head; and as far as the former might prevent an inconvenient remittance of gold and silver to the central mint for recoinage, the end can be as well attained by local mints established under the general authority."

    Madison knew the difference between printing money (aka, emitting bills of credit) and coining money. It is abundantly clear that he approved of the latter and condemned the former. But, according to Tony, Madison held "fringe interpretation that nobody but kooks accept".

  • JoshINH||

    "Because the constitution says so, according to some fringe interpretation that nobody but kooks accept" is not a rationale for anything.

    Somebody better let SCOTUS know.

  • Slap||

    'metal' dumbass, not 'rock'.

  • ||

    I got a rock.

  • BakedPenguin||

    I told you to make a better Halloween costume.

  • ||

    Halloween costumes have no intrinsic value.

  • ||

    We should make Tootise Rolls our national currency.

  • The Benbernank||

    Working on it.

  • cynical||

    It isn't what gold is, it's what it isn't.

    The value of money derives in large part to its scarcity. Gold has some intrinsic value, but double the world's supply of gold, and its value will go down by a similar amount.

    Gold's scarcity is a function of nature and mining (the latter being fairly resource intensive), whereas the scarcity of dolla dolla bills (particularly the virtual ones that dominate our electronic economy) is primarily the result of secretive banking policy, which not only creates an information asymmetry that the central bankers (and the ordinary bankers that they serve) can exploit to deprive those who use money of part of that money's value, but also gives them immense amounts of power to screw people regardless of their information. It's the exact same mechanism that counterfeiters use to harm people, but because it has the sanction of law, it's "ok" (not that this is historically new -- sovereigns with monopoly power over coinage tended to debase the coinage over time).

    The primary purpose of central banking policy is to steal value so stealthily and gradually that A) you don't kill the economy that actually creates the value, and B) the marks don't catch on and do something rash, like switch to a system that is harder for you to game at their expense.

  • Tony||

    Gold has no "intrinsic" value. It's just a rock. It only has value if people get together and decide it has value, just like money. It's the same thing, only gold is less flexible and more prone to causing recessions.

  • ||

    The lack of flexibility is a good thing. Show your work for the yellow rock causing recessions, by the way.

  • Tony||

    Here's some reading.

    In a way I think we're probably talking past each other: I think the "natural" state of an economy is to undergo large booms and busts. The entire purpose of flexible monetary policy is to smooth these over and prevent catastrophes. I think that's a good thing, and self-evidently so. I suspect a lot of you think it's just fine for an economy to behave more erratically--after all, it's what the free market gods demand.

  • cynical||

    "In a way I think we're probably talking past each other: I think the "natural" state of an economy is to undergo large booms and busts."

    Really? I would think that personal savings, in a culture with a healthy outlook on savings, would perform essentially the same countercyclical function as Keynesian fiscal policy. That is, when times were good, people would save some of the excess (which would slow the boom), and when times were bad, people would dip into those savings to maintain something close to their normal rate of spending (which would mitigate the bust).

    Now, you might argue that most cultures don't actually have a healthy outlook on savings -- consumers in the US in particular tend to spend like crazy when times are good, then start saving when things go into the crapper. But spending binges are no better than constantly being locked into savings mode and having nowhere but to invest it but crackhead spend-crazy economies (Asia's problem).

    It might be appealing to think that what we need is a strong central authority to manage things properly. But what government actually has a countercyclical policy? Sure, governments understand the "spend lots of money when times are bad" part. But when's the last time a government anywhere said "Oh no! The economy is booming! We have to cut government spending to properly maintain the economy!". Ultimately, western spenders are pretty much just the mirror image of eastern savers, and both are going to get equally fucked until we get a culture shift toward rational savings and investment.

  • Dank||

    Tony this is right from your own source talking about the gold standard and the Depression:

    "We do not assert that one idea alone was sufficient to produce the GreatDepression. The Depression had a multitude of contributing factors amply enumerated in the recent literature"

    The gold standard had liitle to no affect on the recession.

  • Raven Nation||

    I'm not an economist but an economist I know who has written on this says that a big problem was the US staying on the gold standard & everyone else coming off i.e. if everyone had have stayed on or everyone come off, it wouldn't have been a problem.

    Does that make sense?

  • ||

    The entire purpose of flexible monetary policy is to smooth these over and prevent catastrophes.

    And if omniscient, perfectly moral angels were the ones flexing the monetary policy, that would be an argument in favor of fiat currency. Here in the real world, Bernanke hasn't earned his wings quite yet.

  • Tony||

    No, it's not all or nothing. Imperfect nonangellic regulators are better than none at all. Or is the free market omniscient and perfectly moral?

  • sevo||

    "Or is the free market omniscient and perfectly moral?"
    As close as we can get, tony.

  • Tony||

    No, it's as far as we can get.

  • The Benbernank||

    The entire purpose of flexible monetary policy is to smooth these over and prevent catastrophes.

    Working on Tony.

  • ||

    Gold has no "intrinsic" value. It's just a rock.

    So does this mean I can get my money back for all the rocks i payed for to gravel all those roads i made?

    Or does tony simply not know what intrinsic means?

    Perhaps that might be why he used quotes around the word so he can make up what ever meaning to the word he wants.

  • Tony||

    You're right. Gold is even less intrinsically valuable than gravel, since it isn't as useful.

  • ||

    I will swap my kilo of gravel, for your kilo of gravel.

  • ||

    I will swap my kilo of gravel, for your kilo of gold

  • ||

    You're right. Gold is even less intrinsically valuable than gravel, since it isn't as useful.

    yeah you are misusing the word intrinsic.

    Intrinsic value is the opposite of sentimental value.

    The word you are looking for is utility value.

    Intrinsic value is market value. the market value is the value that people are willing to pay for something. poeple are obviously willing to pay more for gold then for gravel.

    That being said the utility value of gold is still higher then the utility value of gravel.

    You can make computer parts and other shit out of gold....as well as use it to gravel your road....you can't do both with gravel.

  • Steve Chaos||

    Highly ductile with excellent electrical conductivity? Methinks Tony failed middle-school science.

  • The Thinking Man's NASCAR||

    Don't forget, it also doesn't oxidize or corrode!

  • ||

    Me knows Tony is in so far over his head even he doesn't know it.

    If that makes sense, which according to Tony, apparently it does.

    Carry on, Tony. I just subtract 180 degrees from your various bleatings and it all adds up, so to put it.

  • ||

    He has not taken it yet. With any luck and a little homework he will get to that class next year.

  • ||

    Yup gold is useless, who needs computer chips?

  • fuck off||

    heller

  • Fuck Off ||

    Heller

  • ||

    You obviously haven't used a computer with gravel-coated USB connectors. Lightning fast I tell ya!

  • Tony||

    Sure gold has minor usefulness in electronics. But without gravel, how would any of you get home?

  • Fuck Off ||

    heller

  • Mike M.||

    While it's true that the dollar value of gold is prone to dramatic swings and is primarily driven by investors, gold most definitely does have some intrinsic value to it.

    It has never been worth zero in the history of modern man and it never will be, because it is rare and one of the most useful metals in existence. In addition to being minted into coins and formed into jewelry, it has a significant number of practical uses in the military, industrial, medical, and scientific realms.

  • cynical||

    I only meant that as a qualifier to the larger point that gold's value is primarily tied to its scarcity, not to its nonmonetary uses in art and electronics.

    It's also true that the value is tied to popular acceptance of gold as a form of money -- but once people consider something money, the amount of stuff that money can buy still depends on the scarcity of the money relative to the scarcity of stuff.

  • CatoTheElder||

    Wow, gold is "just a rock" but it is responsible for "causing recessions".

    Granite doesn't cause recessions, neither does limestone.

    Gold must therefore be a special type of rock, not "just a rock".

  • Tony||

    Special because human beings arbitrarily decided (collectively) for it to be so. Why is it superior to fiat? And how is it fundamentally any different from fiat?

  • Apogee||

    You're right - we should just print more gold.

  • .||

    Gold has no "intrinsic" value.

    Dude, you are what has no intrinsic value.

  • Tony||

    Says the dot.

  • ||

    It is not a rock, retard!

  • CatoTheElder||

    We trust gold because we do not trust government. History is on our side.

    The US$ has lost over 95% of its value vis-a-vis gold since Nixon closed the gold window. Since the early 70's, it has lost about 75% of its value vis-a-vis the Swiss Franc and the Japanese Yen.

    What is it about Tony and his obsession with green paper with pictures and numbers on it?

  • Hooha||

    If this is true, it is an obvious symptom of an ailment we have afflicted our money with.

    I wonder how long it would take another currency to supplant the dollar as the world's currency if its country backed it up with physical value. I know which I'd rather have/use...

  • Tony||

    How is the value of an arbitrarily chosen chemical element any more real than the value of the full faith and credit of a strong government?

  • The Benbernank||

    any more real than the value of the full faith and credit of a strong government?

    You're economically ignorant,
    but you're funny as hell.

  • Tony||

    And how do you bestow this value on an arbitrarily chosen chemical element without a strong government?

  • ||

    Every ounce of gold has value over time it can change.

    The Government gets more costly as it weighs more because of it's size and power, but cost does not equal value another words you pay more and get less for each unit spent.

    Maybe since a "strong government" is so "valuable" for you....might I suggest a move to say North Korea and you can see what a strong Government does for you.

  • Soonerliberty||

    Actually, it shouldn't be about gold only; it should be about privatizing money. Whatever the market chooses should be sufficient to end the warfare/welfare state. Why do we need a central planning mechanism for banks? That is the proper question. Ironically, the left, who says they hate banks, has to depend massively on banks to print money for the welfare state, the right of course for war.

  • Ted S.||

    Bad money drives out good?

    Bimetallism?

  • ||

    Better a shiny yellow rock than a green piece of paper.

  • Matthew Sampson||

    The Confederate States of America dollar -No shit

  • ||

    It does not have to be gold, it just so happened to be a commodity with the best properties. The most important one being that its safer to trust as opposed to politicians empty promises or societies that end up producing too many buffoons, you being a good example.

  • American Universities ||

    It's obvious that it's possible to become dumber by reading more.

    We prove this daily.

  • CatoTheElder||

    Without a doubt, this is the Jacket's best interview ever.

    When Stockman is allowed more than the usual twenty seconds per topic allowed by MSM, he makes sound, analytical and even persuasive arguments for his positions. His orientation is libertarian-conservative, but he's hated far more by conservatives rather than liberals. It's a shame that conservatives will not hear him out; they might actually learn something.

  • Douglas Fletcher||

    My dim recollections of Stockman are that, aside from the issues, he had a way of appearing arrogant and obnoxious, even by Washington standards, which didn't help his cause much.

    Speaking of von Mises, the von Mises Institute has put out a new $10 paperback version of 'Human Action,' his masterwork. I got it the other day. You'll need a good pair of reading glasses, though, the print is pretty small.

  • Karthik||

    David Stockman is superb as usual in his analysis

  • Mike M.||

    His analysis is somewhat disingenuous. He accurately notes that tax receipts as a percentage of GDP are close to modern historical lows, but falsely pins this on the Bush tax cuts when it's primarily due to the fact that we're in a new depression. Before the depression hit, the government was making money hand over fist.

    He makes no mention whatsoever of Hauser's Law, and the fact that tax receipts have stayed relatively close to 18% regardless of wild swings in the tax rates over the years.

  • Realist||

    Stockman is right about bailouts and TARP, they should not happen.

  • prolefeed||

    Stockman’s argument - that it’s irresponsible to cut taxes

    Leaving taxes rates the same =/= cutting taxes.

  • Tony||

    It doesn't bother anyone that all of the tax rhetoric coming from "small government" types is fundamentally dishonest? Republicans certainly aren't interested in balancing the budget, they're interested in forcing a crisis, i.e., cutting back on programs that are wildly popular not by simply voting on the issue, but being so fiscally irresponsible that, they presume, it would leave little choice.

    It would be like the left devising a strategy to end prison overcrowding by making as many things illegal as they can, thereby cramming prisons in order to force the issue.

    And don't anyone dare bitch about how you're not Republicans. On taxes you all use the same ridiculous talking points. Like prolefeed above. It's not a tax cut, because the rates are the same! Pththt! Or how about "taxes don't affect the deficit, because it's THEIR money!" and other such childish bullshit nonsense.

  • SlimNm||

    My hard-earned money being MY money is 'childish bullshit nonsense'? Ok, I guess your money isn't yours either. Who is it for?

    The government?

  • Tony||

    It's not your money if it belongs to the US Treasury. But that's beside the point that people using this rhetoric are trying to avoid, despite it being painfully obvious: that lower revenues affects the budget.

  • ||

    lower revenues affects the budget.

    Tony meet the Laffer curve. Laffer curve meet Tony.

    Now I need to be going you two kids have fun.

  • Tony||

    Which society are we talking about that has tax rates approaching anything that would be remotely relevant to Laffer effects?

  • ||

    I've been told that "knowledgeable economists" place the peak of the Laffer curve at about 20%.

    When I ask for sources for that number, they tell me to use google.

    When I present the results of my search which estimate it at about 60-70%, they call me a statist.

  • KPres||

    The Laffer Curve is relevant at all tax levels. You may not get tax cuts that "pay for themselves" until around 60%, but leading up to that, you still get diminishing returns on your tax increases. INOW, if tax rates are at 50% an increase will still raise revenues, but just barely.

    Besides, you're still sapping the incentive to produce, which is a negative that affects the economy at large, not just government revenues.

    Also, if you tax the wealthy at 40% at a national level plus 10-15% combined at state and local levels, then you ARE approaching the point where tax increases will not increase revenue. This would be sustainable (though incredibly unfair) if not for the debt. How do you pay it back? Raising taxes on the wealthy up to the peak of the Laffer Curve isn't going to come close to cutting it when the national debt is 100% of GDP.

  • Tony||

    INOW, if tax rates are at 50% an increase will still raise revenues, but just barely.

    Well there's some dispute about that figure.

    Besides, you're still sapping the incentive to produce

    Here you're begging the question. It may be that tax rates much higher than current ones do not diminish incentive at all. After all, that's why it's a curve and not a straight line.

  • KPres||

    No, you have that exactly backwards. The "curvature" is the diminishing part of the diminishing incentive. If it were a straight line, that would reflect a situation where there was no change in the incentives.

  • sevo||

    "Which society are we talking about that has tax rates approaching anything that would be remotely relevant to Laffer effects?"
    There's this country named Greece where, according to recent reports, 60% of the population pays no income tax.
    But as a brain-dead ignoramus, you'd have no knowledge of that.

  • JoshINHB||

    Which society are we talking about that has tax rates approaching anything that would be remotely relevant to Laffer effects?

    CA raised its sales tax by 2% in 09 and took in less revenue than it did in 08.

  • ||

    LAFFER KURV FTW

  • CatoTheElder||

    "It's not your money if it belongs to the US Treasury."

    Tony at his finest!

    Even though you earned it, it is not your money if the Treasury says its theirs.

  • Tony||

    Ultimately it's Congress saying it, meaning it's you giving permission for it. But I suspect you'd like to take issue with the very idea of civilization because you don't get the tax rates you want, which are probably much lower than you actually owe your civilization.

  • KPres||

    To the degree that the average person benefits from civilization, civilization likewise benefits from them.

    Also...

    "Ultimately it's Congress saying it, meaning it's you giving permission for it."

    STFU, you dumbass. An aggregate is in no way representative of any individual entity, and there's no such thing as the "will of the people". What Congress wants from you has absolutely nothing to do with what you want for yourself.

  • Tony||

    So you're questioning the very premise of civilization... or at least representative democracy. What's your alternative?

  • sevo||

    "So you're questioning the very premise of civilization... or at least representative democracy. What's your alternative?"
    Brand new year, same old strawman.

  • Tony to the Maxx||

    It's not your money if it belongs to the US Treasury.

    Property is theft!

  • ||

    "taxes don't affect the deficit, because it's THEIR money!"

    I realize you don't actually read reason.com.

    But just FYI Nick has posted graphs and other data that shows that despite 60 years of high and low top end tax rates federal tax revenues have remained flat at 18% of GDP.

    Spending more then you are taking n is what causes deficits. And it is literally impossible to take in more then 18% of GDP.

    So in this sense yes taxes do not effect the deficit.

    I do not know what you mean by "because it's THEIR money"

    Perhaps you are mashing up two concepts. Libertarians believe in liberty as a moral argument. They think people should keep their own money because it would be immoral to take it. This argument has nothing to do with deficits.

  • Tony||

    I know Nick has posted dishonest, repeatedly discredited graphs that purport to show little relation between tax rates and revenues.

    The so-called moral argument is a distraction. I'm talking about people using this rhetoric in discussions about the deficit--people who, not two months ago, thought the deficit was the biggest crisis in the world. Yet that concern suddenly evaporates when anyone wants to talk about raising taxes on rich people to deal with it.

  • ||

    I know Nick has posted dishonest, repeatedly discredited graphs that purport to show little relation between tax rates and revenues

    Dishonest how? discredited by whom? and the graphs do not show a relationship between tax rates and revenues...in fact they demonstrate that top end income tax rates and revenues are not related. ie raising top end tax rates will not bring in more tax revenues.

  • Tony||

    Even if they did show that, the relation is in itself dishonest, as obviously the top rates are paid by very few people, and thus don't have a huge impact on the overall picture. But the charts he likes so much are dishonest in a worse way: they show on the same scale two values that do not fluctuate on the same scale. That is, rates have fluctuated more radically than revenues because rates are constantly being changed by policymakers, while revenue as a percentage of GDP is more stable--but not necessarily completely unaffected by rates.

  • cynical||

    "as obviously the top rates are paid by very few people, and thus don't have a huge impact on the overall picture."

    Their economic impact is based on the number of dollars they affect, not the number of people. Now who's being disingenuous?

  • ||

    Even if they did show that, the relation is in itself dishonest, as obviously the top rates are paid by very few people, and thus don't have a huge impact on the overall picture.

    You do of course realize that you just defeated your own argument. The taxes we are talking about are for the top rates.

    That is, rates have fluctuated more radically than revenues because rates are constantly being changed by policymakers, while revenue as a percentage of GDP is more stable--but not necessarily completely unaffected by rates.

    If revenues are stable for 60 years in relation to an erratic top rate tax rate then they are by definition unaffected.

    You are grasping at straws.

  • Tony||

    The relationship isn't stable if you look at revenues on a close enough scale. Those charts ignore GDP growth as the biggest contributor to revenue, they don't say that top rates magically have no effect.

  • Apogee||

    You do of course realize that you just defeated your own argument.

    It's Tony - of course he doesn't realize that.

  • sevo||

    "Even if they did show that,"
    IOWs, you're lying.

  • Mike M.||

    You can't deal with it because of your beliefs, but more and more cognitively ordered people around the world have come to understand the plain truth: the left has pretty much bankrupted western civilization and their wildly popular welfare programs are going away sooner or later because of it.

    The proof is the European countries which are even closer to the edge than we are here in the U.S. These countries are almost completely run by guys like you, and most of them have much higher general taxation than we do here.

    You lefties may be able to manipulate the laws of the land, but unfortunately you just don't have the power to alter the laws of mathematics. The money has run out, and the Bismarckian government Ponzi scheme has just about run its natural course.

  • Tony||

    Except there is not a budget crisis that is caused by the mere existence of entitlement programs. There may be problems associated with an economic downturn in many countries right now, but the civilized world somehow has managed to provide such services for the better part of a century, and has figured out how to pay for them. Chicken Littling about how we are supposedly at the tipping point has been going on for decades. From the same people who have been consistently wrong about everything. So there's that.

    What's disturbing is the thought that certain ideologues actually must want economic crises in order to justify their laissez-faire policy preferences (because they sure aren't gonna get them through democracy or personal courage).

  • Mike M.||

    A system that depends on the economy riding sky high all the time is no workable system at all; it's merely a disaster waiting to happen.

    Anyone can read a major newspaper and see that the tipping point is getting closer and closer. States are deep in the hole and getting deeper; many can't even pay their bills. The United Kingdom has to lay off half a million government employees just to try to keep their heads above water! That's a large number of people in a country of sixty million.

    Ordinary people who think just like you do are rioting in the streets all over Greece, France, England, you name it, because they know what you won't admit. It's the death rattle of the Rooseveltian/Beveridgian welfare state happening right before our eyes.

    I know that you guys probably sincerely believe and hope that you can circumvent the laws of mathematics by the endless printing of fiat currency. You're wrong of course. Unfortunately for all the rest of us, it's going to be a very bitter and painful lesson to learn.

  • Tony||

    People are protesting in those countries because they don't have FOX News in those countries. They are absolutely right to protest austerity measures, which are counterproductive to economic recovery, and have the effect of punishing poor people to protect rich people. Which is something normal people don't tolerate in countries that don't have FOX News.

  • sevo||

    "People are protesting in those countries because they don't have FOX News"
    Stupid, stupid, stupid.

  • KPres||

    Tony, nobody benefits from deficits more than the wealthy. In a normal recession, they would suffer the most, because, get this, bursting asset bubbles primarily wipe out assests, something the lower classes don't have.

    When you got nothin', you got nothin' to lose.

    And austerity isn't counterproductive to the real recovery, (that is, the restoration of long-term productivity), it's counterproductive to the jacked up fake stimulus recovery that gets payed for by future generations.

  • ||

    As a great future Chicago mayor once said, a crisis is a terrible thing to waste.

    And it wasn't libertarian ideologues who were spending the Social Security and Medicare trust funds all these decades.

  • Tony||

    And it wasn't libertarian ideologues who were spending the Social Security and Medicare trust funds all these decades.

    Based on the similarity of libertarian rhetoric and Republican rhetoric with respect to economic policy, it might as well have been. Think about it. If you were a libertarian and had political power, what would stop you from choosing the direct route to your policies? Asking the people if they want social security to disappear won't work in a million years. I would hope that a libertarian would have the moral fortitude not to engage in fiscal terrorism in order to enact unpopular, radical economic policy changes to satisfy either an ideological article of faith or just for the sake of making a plutocracy, but you can't really count on morality.

  • sevo||

    "Based on the similarity of libertarian rhetoric and Republican rhetoric..."
    New year, same old strawman.

  • ||

    "fiscal terrorism"

    Weapons grade stupid right there.

  • Hooha||

    Heh, I love how you intentionally mis-analyze, Tony. And the fact that you sew seeds of truth into your bullshit makes it tougher to sift through, mentally.

    Here I'm referring to your assertation that we are claiming "The end is nigh, we're at the tipping point!", when in fact libertarians are calmly pointing out that if the American government keeps going as it is now, a crisis will occur eventually. Personally I believe we lost sustainability with the "passage" of health care "reform", and that backtracking will now be necessary to find stable ground again, but that's certainly not the vibe I get from all libertarians.

    Either way; we're offering advanced warning here, not advising you to watch for falling bits of sky. You should be familiar with the concept of 'impending doom'; it's how Al Gore sold all his bullshit that you love so much. Only difference is, facts and data coroborrate our claims without any intervention from "scientists".

  • Tony||

    Yes you're all about long-term planning. Save social security in 80 years by eliminating it now!

  • sevo||

    Tony|1.3.11 @ 10:34PM|#
    "Yes you're all about long-term planning. Save social security in 80 years by eliminating it now!"
    Care to try that in something intelligent life can understand? Or admit you just haven't a clue?

  • Random Dude||

    "There may be problems associated with an economic downturn in many countries right now, but the civilized world somehow has managed to provide such services for the better part of a century, and has figured out how to pay for them."

    You may have noticed that it's those "civilized" countries that are being ravaged by the bond vigilantes right now because of debt problems.

    Hmmmmmm........

  • ||

    Here's a neat trick, Tony: Explain how in a fractional reserve system closed to all but one official fiat currency, interest on lending - lent dollars being the only dollars that exist, by the way - is repaid.

    Go ahead, run the numbers.

    Then compare them to a variety of basic indicators, such as the money supply, national debt, and value of the dollar.

    It seems circumstantial evidence already knows what you deny.

  • sevo||

    Tony|1.3.11 @ 5:48PM|#
    "Except there is not a budget crisis that is caused by the mere existence of entitlement programs...."

    You're right. If only we cut everything other than entitlements to zero, why, we'd *still* be in a bind.
    Check that; you're wrong.

  • Tony||

    No, you are. You don't know what you're talking about because you're just repeating right-wing lies. There is not a budget crisis! There is, however, a jobs crisis. You can't fix one without worsening the other. But Republicans always think there's a budget crisis, even as they gleefully continue contributing to it, mostly with tax cuts to rich people that they claim against all sanity have no effect on the budget.

  • sevo||

    "There is not a budget crisis! "

    I present to all who read this that Tony actually made that comment.
    And Tony presumes to be taken seriously.

  • KPres||

    There's a jobs crisis because we subsidize unemployment.

  • nekoxgirl||

    You don't think adding nearly 2 trillion dollars to the debt each year is a budget crisis?

  • Tony||

    I think that not addressing jobs will only cause more debt. Focusing on debt while ignoring overall economic health is counterproductive.

  • sevo||

    "...the civilized world somehow has managed to provide such services for the better part of a century, and has figured out how to pay for them..."

    Brain-dead that you are, we'll presume you mean Euro-socialists, rather than the already failed USSR and the thoroughly non-socialist dictatorship of the Chi Coms, such is your ignorance.
    Then it is obvious that your knowledge of history is equally flawed; the Euro-socialists either (Switzerland, Sweden) profited greatly by WWII, benefited from the Marshall Plan, and/or have free-ridden on the US defense budget since WWII. Regardless of the freebies they've gotten, they are all in larger or smaller danger of economic failure, in case you've been living in your socialist cave and haven't noticed.
    The exception, of course, is Germany, and even that hater of capitalism Judt admits that Ludwig Erhard made the difference there.
    Oh, and your "better part of a century" is something closer to 60 years of a downward slope.
    Go away.

  • Tony||

    profited greatly by WWII, benefited from the Marshall Plan, and/or have free-ridden on the US defense budget since WWII

    Even if these are sufficient to explain the historical prosperity in these places, these are all government welfare programs.

    Regardless of the freebies they've gotten, they are all in larger or smaller danger of economic failure, in case you've been living in your socialist cave and haven't noticed.

    No, that is not the correlation. You want to conflate spending on entitlement programs with the current budget deficits, which have everything to do with the recession. GDP is more important than tax rates and more important than spending with respect to national budgets. You're just inventing a correlation that fits your ideology.

  • sevo||

    "Even if these are sufficient to explain the historical prosperity in these places, these are all government welfare programs."
    Yes. paid for with stolen money.

    "No, that is not the correlation. You want to conflate spending on entitlement programs with the current budget deficits, which have everything to do with the recession."
    Stupid, stupid, stupid. You bet! Every entitlement presumes good times!
    What an ignoramus. Go away.

  • KPres||

    Nonsense. Revenues are at the same place they were in 1998. Somehow we got by without a $1.5 trillion deficit that year.

  • ||

    Except there is not a budget crisis that is caused by the mere existence of entitlement programs. There may be problems associated with an economic downturn in many countries right now, but the civilized world somehow has managed to provide such services for the better part of a century, and has figured out how to pay for them.

    Translation: We had the blood dripping out at JUST the right replacement value, and then you fuckers went and had a recession...

  • ||

    You're changing the subject, Tony, or at least trying to.

    Being the gentleman I am, I therefore accept your concession on gold, the horrible Yellow Rock. Yes, you're right: Paper sucks.

    Mostly because it doesn't take millions of years to produce in very limited quantities that cost a lot to find, mine, and refine.

    This we cannot say about fiat currency and machine banking and trading.

    Catching on yet?

  • Tony||

    The things you're describing as assets of gold as currency are things I consider drawbacks.

  • sevo||

    "The things you're describing as assets of gold as currency are things I consider drawbacks."
    Of course. You're an ignoramus.

  • sevo||

    "...And don't anyone dare bitch about how you're not Republicans...."

    Brand new year, same old strawman.

  • Tony||

    Not a strawman at all. If your political identity is your policy preferences, then with respect to economic policy you might as well be a Republican.

  • sevo||

    "...you might as well be a Republican."
    And you might as well be a Stalinist.

  • ||

    It doesn't bother anyone that all of the tax rhetoric coming from "small government" types is fundamentally dishonest?

    yeah Tony the people on a libertarian blog are all lying that we do not want small government. We are all actually pushing a hidden agenda that we never actually talk about.

  • Some Guy||

    Other than the gold fetish stuff, that's exactly what I've been saying.

    If we refuse to cut spending, then we should be forced to pay for it - not our children.

  • ||

    Does anyone think that our children/grandchildren are going pay off the deficit or anything like that? That they are really going to piss & moan about like we do, sure... and complain that they are leaving such a "running dog fiasco" to their children/grandchildren, yep same 'ol story, different generation. To do any of this different flies in the face of Bretton-Woods/Keynes economics 101... If they can keep the all the ball juggled in the air, no man will change it. But if/when the dollar collapses then it will fall on its own... and god help us during whatever transition comes.

  • Mike M.||

    Speaking of the national debt, while everyone was recovering from their holiday hangovers and heading back to to work today, it jumped higher than Michael Jordan on a speedball and just officially rocketed past $14 trillion.

  • ||

    Dennis Miller: I asked my son if he minded me saddling him with the defict. He said, "Christ, no. I plan on saddling mine."

  • Random Dude||

    Loved the video.

    I have one nit to pick with it though in regards to what "Friedman said couldn't happen." We definitely don't have free-floating currencies due to the Yuan peg, the implicit peg amongst the EU nations, as well as that of the petrodollar nations to the dollar. These nations contain the vast amount of free-floating capital in the world and therefore hold the most sovereign debt. I highly doubt Friedman would agree with the premise that highly unionized currency blocs constitute "free-floating" exchange rates.

    Furthermore, given that Friedman predicted the breakup of the E.U. within one decade precisely because they did not have free-floating currencies amongst the bloc and would run up unsustainable deficits, I think Mr. Stockman is either ignorant of Friedman's position or deliberately misrepresenting him.

    Other than that, thumbs up Reason and Mr. Stockman.

  • givejonadollar||

    Reagan only came around in the 2nd term due to political pressure. However, he couldn't even hold Ron Paul's gym bag when it comes to great ideas.

    Ron Paul is the "great" Republican and history will vindicate him.

  • ||

    (*&(*&(*^(^^^^&&^& genius.

  • ||

    argh argh argh--why is it twits like Palin are running around--and self absorbed tools like McCain are still around, and OBama, but this guy is sitting in an office somewhere?

  • friedman||

    Reagan and Bush did spend too much on domestic/foreign policy and it is fair to criticize them on that point. But their tax cuts both increased government revenues, so it's simply incorrect to blame their deficits on that isolated point (i.e. the laffer curve).

  • ||

    I am not surprised that there is an attack on gold as a standard of value from statists. A fiat currency gives central power more muscle.

    What I truly can't understand is the number of people who buy the "Gold is just a rock" misnomer.

    Gold is a tremendously useful "rock."

    We've tried to replace gold with tin for electrical connections, but only gold has the necessary corrosion resistance and electrical conductivity to do the job in most cases. Every computer made relies on gold for function.

    Gold particles dispersed in glass form a reflective coating that helps block solar heating, reducing energy consumption.

    Gold is used in medicine, manufacturing, shit, just read it yourself:

    http://en.wikipedia.org/wiki/Gold

    It's not a fucking "rock," you statist freaks. Intrinsic doesn't mean what you think it means.

  • Tony||

    But using gold as currency dates to long before it was found to be useful in electronics. It's still a completely arbitrary choice... based on the ancient tradition of "oooh shiny!" Nothing has "intrinsic" value... as many people here will say on other occasions, value is what people will pay.

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