Sunday, March 25, 2012
Who is Insulting the Middle Class?
One of the oldest is a nostrum that under a democracy the people will inevitably drain the public treasury by demanding more spending than taxes. The theory is that citizens who get more than they pay for will vote for politicians who promise to increase spending.
This is often called the “Largesse Canard” -- an outright fantasy that was first fabricated by Plato, in order to demean the Athenian democracy, and that more recently was expressed in an oft-quoted aphorism, supposedly by Alexander Tytler: “A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship. The average age of the world's greatest civilizations has been 200 years.
“Great nations rise and fall. The people go from bondage to spiritual truth, to great courage, from courage to liberty, from liberty to abundance, from abundance to selfishness, from selfishness to complacency, from complacency to apathy, from apathy to dependence, from dependence back again to bondage.”
This smugly cynical assertion has been circulated widely among the dour Rothbardians and Randites who dominate today's warped version of the libertarian movement....
...and it is a damned lie.
Remember the 1990s? When Bill Clinton ran budget surpluses and wanted to spend the black ink buying down public debt, instead of frittering it on short term “largesse”? Nearly all of his support came from the middle class. By huge majorities, those working Americans polled their preference for debt buy-down. So why did it instead get flushed down the toilet of Supply-Side (voodoo) tax gifts for the rich?
Because (duh) the aristocracy - supposedly wise and far-seeing - rationalized a demand for instant gratification, instead of reduced debt which (ironically) would have lowered commercial borrowing costs overall and led to the very scenario that they were supposed to be after in the first place! In other words, U.S. federal debt pay-down would have engendered far more new business activity than opening our veins for the wide-open maws of plutocrat vampires.
History shows that it is always the aristocracy that behaves in spendthrift ways, not the middle class. (Oh but they do like to invest lavishly in “think tanks” and media empires, ordering them to spread calumnies against citizenship. Propaganda like the Largesse Canard.)
Now a new twist. Dean P. Lacy, a professor of political science at Dartmouth College, has identified a theme in American politics over the last generation. Support for Republican candidates, who generally promise to cut government spending, has increased since 1980 in states where the federal government spends more than it collects. The greater the dependence, the greater the support for Republican candidates.
Conversely, states that pay more in taxes than they receive in benefits tend to support Democratic candidates. And Professor Lacy found that the pattern could not be explained by demographics or social issues." See a map showing the geography of government benefits.
The full article is six pages, a typical New York Times in-depth Sunday magazine drill-down.
Seriously, read up on this. You need to be armed against these insults to the people who actually create the wealth in our civilization.
Collected articles on The Economy: Past, Present and Future