Taking the Federal Government Back to 1890
genferei ·
February 27, 2012 at 3:48pm
We often hear talk from candidates about keeping the revenue of the federal government to its 'historic average' of 18 or 19 or even 20%. This has always seemed odd to me for a few reasons.
- There is no set of natural forces that has kept revenue at this level, except the performance of the economy and a series of political decisions. Other decisions are possible.
- The history used is rather short - essentially since the Great Society. Why not go back further?
- It seems a bass-ackwards way of approaching budgeting - here's how much we can get, now what shall we spend it on? The question should always be 'what do we need to do, and can we afford it?' (Since every rise in tax is a diminution of liberty.)
So let's take a look at the Federal Government back in 1890-ish, just before the disease of progressivism insinuated itself into both parties and everyone's life. The US had just become the richest country in the world. Laissez-faire had delivered the best period of economic growth in the country's history. What would you miss from the responsibilities the Federal Government has taken on since then? Any of these?
- Interstate Commerce Commission
- Sherman Antitrust Act
- Federal Trade Commission
- Food & Drug Administration
- Income Tax
- Federal Reserve
- FBI
- SEC
- Davis-Bacon
- Minimum Wage
- Wagner Act
- The Departments of Commerce, Labor, HHS, HUD, Transportation, Energy, Education, Veteran's Affairs and Homeland Security
- etcetera, etcetera, etcetera
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Comments:
Apr '11
Re: Taking the Federal Government Back to 1890
Fred Cole
Valiuth
Without the SEC who would monitor and audit financial institutions to prevent fraud of the Enron and Madoff kind...without over site people can game the system easily by with holding information or just straight up lying to investors. The SEC makes that kind of manipulation harder to do. Its presence gives me confidence that the mutual fund I am giving my money to is on the level. Totally worth 1 billion dollars.
Your error is in assuming that
1. A government agency can perform these functions well.
2. If they disappeared nothing would replace them.
Nature abhors a vacuum. In its absence, any vital functions of the SEC would be performed by free market entities. · 3 minutes ago
Edited 3 minutes ago
How could a free market entity force compliance? What would happen when you get different accounting standards? What about objectivity? I am not saying the SEC is perfectly run. I am saying a free market would break down and fail us, because without an outside source the free market can be gamed and stops being free. The SEC keeps the market place free and fair. You want the players to call the game.
Nov '11
Re: Taking the Federal Government Back to 1890
Valiuth
How could a free market entity force compliance? What would happen when you get different accounting standards? What about objectivity? I am not saying the SEC is perfectly run. I am saying a free market would break down and fail us, because without an outside source the free market can be gamed and stops being free. The SEC keeps the market place free and fair. You want the players to call the game. · 48 minutes ago
I'd imagine something like Dunn & Bradstreet. You can extrapolate out to other functions. Accurate information is a valuable commodity. When there is a need, the market provides.
I work in an industry that's unregulated. There are voluntary trade organizations that certify compliance with a set of standards deemed important within the industry. You can extrapolate that out.
Then the market does its thing. It rewards good actors and punishes bad actors.
I'll add that a free market entity doesn't "force" compliance, in the sense of using coercion. Things just reach the point where compliance is more beneficial than non-compliance.
Edited on February 27, 2012 at 9:13pmFeb '12
Re: Taking the Federal Government Back to 1890
"The Uniform System of Accounts for __fill in the blank___ were authored by private-sector accountants, Valiuth, not government agencies. You are then free to do business with anyone you choose.
You might insist before doing business that a company (a) employs that accounting system, (b) both a and gets an independent outside audit, (c) gives you a handshake, (d) other, etc etc.
Feb '12
Re: Taking the Federal Government Back to 1890
Heck, try Angie's List.
Apr '11
Re: Taking the Federal Government Back to 1890
All that works well and good, because there is in our system an outside force that will regulate in the absence of self regulation. There are still laws describing what is or is not fraud and a third party to appeal to in case of dispute or complaints. You can scale back SEC regulations but you will still need a government entity that specializes in understanding the financial system that can determine if fraud is happening.
My point Drpete is that you can say this about anything. Why do we need trafic laws? People will just negotiate the trafic laws as they drive. Removing trafic laws does not mean no traffic, but it will run a lot less smoothly. In fact the more cars there are the less well it will run. As the activity of traffic effects all our lives, even if we don't drive it is important that traffic run smoothly and consistently. The government is very good at dong this, and by doing this the roads are free and safe for all for both public and private use.
The SEC is there too keep the financial markets honest and free, that is what government is for.
Oct '10
Re: Taking the Federal Government Back to 1890
Umm. The SEC had been in operation for many decades before they failed to prevent Enron and Madoff.
Oct '10
Re: Taking the Federal Government Back to 1890
No, that's what the law of fraud and the law of contract are for. Not to mention the laws of economics. Who makes sure there are good television programs to watch? Or good video games to buy? Or pleasant conversations to be had on internet forums?
Dec '10
Re: Taking the Federal Government Back to 1890
Valiuth: My point Drpete is that you can say this about anything. Why do we need trafic laws? People will just negotiate the trafic laws as they drive. Removing trafic laws does not mean no traffic, but it will run a lot less smoothly. In fact the more cars there are the less well it will run. (...) The government is very good at dong this, and by doing this the roads are free and safe for all for both public and private use.
The SEC is there too keep the financial markets honest and free, that is what government is for.
The roads are nowhere near free. I just paid a large tax for them when I filled up my gas tank. And the Gov't is better than who specifically at building and maintaining them? Gov't officials only shell out exorbitant wages for those who labor on them. With out government involvement, civil engineers and construction companies are still equally equipped and capable of completing the task. Judging by my commute and the constant state of construction since ARRA passed, the government is better at keeping people constantly busy, than making genuine improvements.
Apr '11
Re: Taking the Federal Government Back to 1890
genferei
No, that's what the law of fraud and the law of contract are for. Not to mention the laws of economics. Who makes sure there are good television programs to watch? Or good video games to buy? Or pleasant conversations to be had on internet forums? · 6 minutes ago
Yes, well the enforcement of the fraud laws is done through agencies like the SEC, FED, FBI, and Justice department.
As to Enron and Madoff. No system is perfect. I argue we would have far more such cases without the agencies we have to regulate these institutions. The police don't stop all crimes, but we sure would have more if we didn't have any.
Edited on February 27, 2012 at 10:37pmMay '10
Re: Taking the Federal Government Back to 1890
If we keep going the way we are going, it won't take that long before we are making these kinds of decisions. To go along with the cuts talked about above, I would like to see:
- zero based budgeting with no more off budget expenses permitted. Our deficit would be hugely greater than reported if we laid figures out as anyone besides the govt. has to.Current (non zero based) budget system makes it almost obligatory to have YOY increases.
- All statistical indicators (E.G. CPI, GDP) to include like comparisons to previous periods where "adjustments" were made. If we were reporting inflation as we were in 1980, it would be around 10% and unemployment would be double its current.
Sep '10
Re: Taking the Federal Government Back to 1890
Fred Cole
Nature abhors a vacuum. In its absence, any vital functions of the SEC would be performed by free market entities.
It seems one ought not forget, nor dismiss out of hand, the role of state and city governments in anything. I'm not saying that either of these is altogether appropriate to the case.
Apr '11
Re: Taking the Federal Government Back to 1890
Beasley
The roads are nowhere near free. I just paid a large tax for them when I filled up my gas tank. And the Gov't is better than who specifically at building and maintaining them? Gov't officials only shell out exorbitant wages for those who labor on them. With out government involvement, civil engineers and construction companies are still equally equipped and capable of completing the task. Judging by my commute and the constant state of construction since ARRA passed, the government is better at keeping people constantly busy, than making genuine improvements. · 11 minutes ago
Nothing is ever free no matter how you slice it. I was using free to mean "open to all" rather than without financial cost.
I was also not talking about who should build the roads, but who should regulate how they are used. Those are two different things. I am not saying governments run without problems or they can not run better than they are now. I am saying that they have a clear role in coordinating and regulating vital publicly used systems.
We must guard against making that definition both too broad or too narrow.
Oct '10
Re: Taking the Federal Government Back to 1890
Or the civil courts and the local police.
Look at the history of instruments of capital consolidation. They have, by and large, survived and prospered despite, rather than because of, explicit government regulation. To take my 1890 example, ie. before the SEC, FBI and Fed, the capital markets had managed to build vast railroads, steel mills and oil fields. What evidence do you have that things would have been better - better than the most economically productive period in world history, by the way - if vast resources had been diverted to regulating and policing the capital markets of this period?
Edited on February 27, 2012 at 11:17pmFeb '12
Re: Taking the Federal Government Back to 1890
Governments, Valiuth, are good at absolutely nothing.
Apr '11
Re: Taking the Federal Government Back to 1890
genferei
Or the civil courts and the local police.
Look at the history of instruments of capital consolidation. They have, by and large, survived and prospered despite, rather than because of, explicit government regulation. To take my 1890 example, ie. before the SEC, FBI and Fed, the capital markets had managed to build vast railroads, steel mills and oil fields. What evidence do you have that things would have been better - better than the most economically productive period in world history, by the way - if vast resources had been diverted to regulating and policing the capital markets of this period? · 44 minutes ago
Edited 40 minutes ago
But we aren't spending vast resources on the SEC. You yourself said it only costs 1 billion dollars. The total GDP is 15000 billion. So we are spending 1/15000. These agencies emerged along with the development of more complex and intertwined markets, from a direct need to regulate these activities. It is not like the financial institutions and practices of today existed back then.
Apr '11
Re: Taking the Federal Government Back to 1890
drpete
Governments, Valiuth, are good at absolutely nothing. · 1 hour ago
Really!? I know its fun to be libertarian, and say things like this but you can't be serious. I don't understand for the love of me why serious people would say such unserious things.
Oct '10
Re: Taking the Federal Government Back to 1890
I have a crazy idea: how about we read the Constitution, and anything that isn't explicitly named in it doesn't get our tax dollars.
Whoops! The Constitution didn't say anything about a federal income tax until it was "temporarily" amended to fund WWI, ditto a "Federal Reserve." Funny, that.
May '10
Re: Taking the Federal Government Back to 1890
Valiuth/drapee/generéis, one can argue that the cost oftheSEC is small in operall budgetary terms. I don't see how one could present the agency as being good or effective or worth the money spent - in real and opportunity cost terms. Justice has created an image for itself as a cesspit of corruption. FED has essentially declared war on th middle class and retrirees, effectively removing all safe haven investment opportunities, in the middle of a volatile sea.That leaves only the FBI that might be useful as currently structured. Of course there are worse areas, EPA, education, interior, FCC, agriculture, energy
May '10
Re: Taking the Federal Government Back to 1890
Apologías, I am using a spanish iPad and hace to change every other word
Feb '11
Re: Taking the Federal Government Back to 1890
I can think of a policy tool of the US government that started to go away right about the time expenditures started escalating in the 1930s.
Hmmm...