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ROOT: Raising Cain

ROOT: Raising Cain

9-9-9 was good ante. Let’s try 0-15-0.

The Washington Times

Wayne Allyn Root is a former Libertarian vice-presidential nominee and author of “The Conscience of a Libertarian: Empowering the Citizen Revolution with God, Guns, Gold, Gambling & Tax Cuts” (Wiley, 2009). He writes at RootforAmerica.com.

73 Comments

  1. Tom Blanton Tom Blanton October 24, 2011

    Yes, I get that. You castigate and vilify Root for his advocacy of a 10% cut proposal, comparing and contrasting it with RP’s 25% cut proposal. I don’t get that. You prefer a 100%. Others advocate less. You attack them.

    Capozzi, I don’t think you get anything. I did not “You castigate and vilify Root for his advocacy of a 10% cut proposal, comparing and contrasting it with RP’s 25% cut proposal.”

    I castigated and vilified Root for making the claim:

    “I stand for the same kind of massive spending cuts as they (Ron Paul) do.”

    which is not based in any reality.

    How many times do I have to explain that to you, Capozzi. Surely you are intelligent enough to discern the difference between criticizing someone for lying and criticizing someone for holding a particular opinion.

    You prefer a 100%. Others advocate less. You attack them.

    Where do I attack anyone other than Root? Where do I attack Root for wanting a 10% budget cut?

    Oh well, perhaps I do respond to your nonsense when YOU attack me for not being moderate enough for your middle of the road sensibilities.

    I find it very bizarre that you don’t attack Root with your sophistic witticisms when he engages in particularly nasty forms of blood sport with regular libertarians, Occupy Wall Street protesters, liberals, Muslims, and of course, Obama.

    But, your adulation for Mr. Root is certainly no more bizarre than having a mild-mannered Republican presidential candidate with a libertarian agenda that is more aggressive than the proposals proffered by the self-appointed bombastic spokesman for the Libertarian Party.

    My question is why do you initiate these eristic diatribes with me?

    Maybe the answer to that would help me figure out why I bother to respond to your baseless accusations.

  2. Robert Capozzi Robert Capozzi October 24, 2011

    71 tb: I just want to clarify that when I say that I’d prefer a 100% cut in federal spending, I am expressing a personal preference. I am not speaking for anyone else and I do not claim to represent any political party or group.

    me: Yes, I get that. You castigate and vilify Root for his advocacy of a 10% cut proposal, comparing and contrasting it with RP’s 25% cut proposal. I don’t get that. You prefer a 100%. Others advocate less. You attack them.

    Why?

    Blood sport?

  3. Tom Blanton Tom Blanton October 24, 2011

    Mr. Capozzi, apparently you are under the impression that I am a Libertarian Party candidate running for office or that I claim to speak for the LP.

    I just want to clarify that when I say that I’d prefer a 100% cut in federal spending, I am expressing a personal preference. I am not speaking for anyone else and I do not claim to represent any political party or group.

    Again, I am not running for office. I also offer no advice to any candidate on how to read the minds of voters or bamboozle them with rhetoric designed to win their votes.

    I simply believe the federal government should be abolished and I would prefer it be dismantled in an orderly manner as opposed to a sudden collapse. I am not promising any sort of utopia, merely the suggestion that having no federal government would be an improvement over the government we have.

    I am aware that more people disagree with me than agree, but that’s OK. Many of the preferences I have in food, movies, music, literature, etc. are not in sync with the preferences of the majority, and yet I persist in living my life and expressing my opinions as I see fit.

    What other people prefer is their business, I just wish they wouldn’t try to force their preferences on me – regardless of what political label they place on themselves. Let them eat Big Macs, listen to Justin Beiber, watch Dancing with the Stars and destroy their children’s future – just leave me out of it, please.

  4. Robert Capozzi Robert Capozzi October 23, 2011

    69 hf: Sounds great to me [“If elected, I will cut as much as I can get away with.” ] and I know plenty of people who are not anarchists or even libertarians that would agree.

    me: You may be correct. Has a candidate ever said this? How’d they do? If not, perhaps someone should try it, against my counsel. I certainly don’t pretend to have all the answers. I can’t even watch 5 minutes of Dancing with the Stars! 😉

  5. Humongous Fungus Humongous Fungus October 23, 2011

    “If elected, I will cut as much as I can get away with.” Sorry, but that sounds like a joke.

    Sounds great to me and I know plenty of people who are not anarchists or even libertarians that would agree.

    That is not to say we can’t have priorities. I think it’s perfectly reasonable for each candidate to say “here is what I would like to cut first if I can” or “yes, ideally I would cut this (or come up with a voluntarily funded alternative) but it’s not really high on my priority list” and I don’t think that this is something different LP (or small l) candidates need to agree on.

    I know the question does come up as to what parts of government we should keep. I believe “there will be other politicians fighting for each and every one of them, I’ll just concentrate on cutting as much as I can” is a perfectly reasonable answer.

    Or, you could go into priorities at that point.

    There are perfectly good ways of answering those questions without advocating for or against a stateless society, which is not exactly about to happen anytime soon – at least not through elections.

    “In the near impossible event of my being elected, I might have something close to your ATTITUDE, to be clear.”

    No need to be afraid to run on it either.

    Of course, to be elected first you have to run, and my impression is that you are not too into that.

  6. Robert Capozzi Robert Capozzi October 23, 2011

    67 hf, what I find unserious is the complete lack of specificity and no sense of priority. To be clear, I’m talking about a L candidate running for office. How would such a soundbite go: “If elected, I will cut as much as I can get away with.” Sorry, but that sounds like a joke.

    RP has put out a pretty good model for a L candidate. It’s reasonably specific, it’s big, but it’s not loopy (e.g., calling for the immediate end to all Social Security payments). He calls for eliminating the DoE, but not ALL its functions, for ex.

    In the near impossible event of my being elected, I might have something close to your ATTITUDE, to be clear.

  7. Humongous Fungus Humongous Fungus October 23, 2011

    What we would do in office is try to cut as much as we can. We won’t get everything we want but we may get some of what we want if we get elected to some offices. We won’t get elected to all offices, so there will still be others fighting against the cuts. If we ever manage to cut too much for your taste vote for someone else.

    What is unserious about that? That is how politics works in the real world.

  8. Robert Capozzi Robert Capozzi October 23, 2011

    61 tk: GDP is “salient” to almost nothing, insofar as there’s no obvious respect in which other things automagically scale to it.

    me: Hmm, well, I think we agree in the sense that I would like to see government and government debt shrink over time as a GDP%. I certainly could visualize the least-controversial aspects of government shrinking as a GDP%…defense, courts and cops, as economies of scale and technology could enable the economy to grow faster than these functions.

    If memory serves, the single biggest driver of post 1980 debt/GDP% reversal has mostly been entitlements, mostly for seniors…more benefits combined with longer lifespans and increased end-of-life medical care.

  9. Robert Capozzi Robert Capozzi October 23, 2011

    64 hf, oh, no, I didn’t. That would be poor politics, IMO. My sense is that voters want an illustrative flavor of what an L might do in office.

    As campaign positioning, yours sounds too vague and non-serious to me and probably to most voters.

  10. Humongous Fungus Humongous Fungus October 23, 2011

    I guess you missed my point.

    I said just start the ball rolling and don’t put any percent limits on it.

    Don’t say 100% or 90% or 10% or 25%,

    Just say cut it as much as we can.

    Does anyone really think there is any danger we will cut it too much any time soon?

  11. Robert Capozzi Robert Capozzi October 23, 2011

    62 hf: Advocating making government as small as we can get it to be works for a lot of people.

    me: Yes, I agree. I’d say 10-25% does. Anything more, however, I probably past the point of diminishing returns, in terms of positioning. Then we get into fringe territory.

  12. Humongous Fungus Humongous Fungus October 23, 2011

    “For Ls, our goals tend to be more modest. Our candidates don’t expect to be elected. Instead, the idea is to put ideas out there that get people thinking outside the box, maybe to say, Hey, I like what those Ls have to say. Advocating statelessness seems highly unlikely to get many unconverteds to say that. Advocating a 25% or a 10% cut might.”

    Advocating making government as small as we can get it to be works for a lot of people. They understand that even if we get elected we won’t get elected to 100% of everything and will have to compromise with other people fighting to protect and expand each and every government program.

    As far as I know the position of dictator is not up for election. Not even a term limited dictator.

    As you and others have pointed out, a government collapse does not necessarily mean a libertarian society would replace it. As others have told you it does not necessarily mean a Mad Max world either. What would happen would depend on the strength of private institutions — businesses, families, churches, fraternal societies, neighborhood watches, etc.

    So, it is perfectly safe and not all scary extremist to advocate strengthening such institutions by withdrawing government from competing with them as much as we can. To the extent we can succeed, we would also put ourselves in a better position if and when the government ever collapses.

    Theorizing over end-states is mostly a waste of time. Focus on the first few steps, don’t mentally limit yourself in how far you might get but don’t presume you’ll get very far either. Just focus on the direction.
    Once momentum is on your side rather than against you see what happens. Getting momentum to change is the real challenge.

  13. Thomas L. Knapp Thomas L. Knapp October 23, 2011

    RC@60,

    I guess “relevant” works … in which case you’re just plain wrong, as GDP is “salient” to almost nothing, insofar as there’s no obvious respect in which other things automagically scale to it.

    Borders do not automagically expand or contract, nor external threats grow or shrink, as GDP goes up or down.

    If population stays the same, growing GDP should indicate a reduced, rather than increased, need for “safety net” protections, since per capita wealth is growing. Those programs would logically have an inverse scalar relationship to GDP, if they have any relationship at all.

    “As a percentage of GDP” is the last resort of someone who has no argument and just wants to throw some numbers out there to justify the shit he made up.

  14. Robert Capozzi Robert Capozzi October 23, 2011

    tk, I use its “of notable significance ” meaning. “Relevant” might be a better word choice, though, thanks…

  15. Thomas L. Knapp Thomas L. Knapp October 23, 2011

    RC@58,

    “The salient number is as a % of GDP”

    You might want to look up the word “salient.” I do not think it means what you think it means.

  16. Robert Capozzi Robert Capozzi October 23, 2011

    56 tb, yes, nominal debt’s been going up longer. The absolute dollar amount has been going up since at least 1900 if you smooth out the few years which it ticked down. Interestingly, the 1930s were a downtrend, which kinda surprises me, but the trend picked back up in the 40s. The salient number is as a % of GDP, which turned around 1980. (It also spiked during WWII, but that was relatively short-term aberration.) In a long series, most statisticians look at trends, not perturbations, as they understand the concept of missing the forest for the trees.

    http://www.usgovernmentspending.com/spending_chart_1900_2016USp_12s1li111mcn_H0f_US_Federal_Debt_Since_1900

    tb: I’m discussing the simple fact that Wayne Root likes to make claims that have no basis in reality.

    me: Root’s plan would in my view be a “massive” cut by historical standards. Compared with RP’s PLAN, not so much. Of course, RP’s plan was just released, and he has staff to work such things up. Perhaps Root may revise his ideas now that RP’s plan is out there. A Root-a-phobe may not see this in context, as phobics often lose perspective and fixate on that which they fear and loathe.

    tb: I simply believe in advocating what one believes in as opposed to advocating what one believes is acceptable to some imaginary group of people whose thoughts can be read in advance.

    me: Good for you! To what effect? Or don’t you care? In my case, I don’t see the point in advocating something if it’s highly unlikely to happen. You recently suggested that if someone were to advocate a 95% cut in the FedGov, why not advocate a 100% cut?

    I can think of a lot of reasons not to advocate either. But, then, I draw a distinction between “theorizing” and “advocacy.” I could theorize about a Geoist L nirvana in general terms, and then advocate specific steps to move things in that direction. That, I submit, is how politics works. And, yes, I do factor in my sense of the body politic in factoring in what specific steps make the most sense, all things considered.

    tb: Unlike you, Capozzi, I don’t have the ability to know what unknown people will think of something I say before I say it.

    me: I possess no such ability. I do take my best guess about what’s sellable and what isn’t.

    tb: Now, maybe Wayne will give me some odds on that happening. I’m betting that the government will collapse before you see an actual budget cut.

    me: Let me suggest that such plans serve a purpose that doesn’t seem to be registering with you. The point of such plans is to illustrate aspirations. The subtext is: Here’s the direction I’d like to see the country go in. Here’s my opening proposal. Here’s my sense of priorities. Reading these sorts of plans as anything more than that is to miss the point of the exercise.

    These plans are designed to get buy-in from prospective voters. If a lot of voters say, Yes, I’d like to see the country go in that direction. Yes, I think something like that could happen. Yes, I’d like to see Candidate or Advocate X’s ideas begin to be implemented.

    It’s advertising! Buy these clothes, this car, whatever, and be way cool like this model.

    For Ls, our goals tend to be more modest. Our candidates don’t expect to be elected. Instead, the idea is to put ideas out there that get people thinking outside the box, maybe to say, Hey, I like what those Ls have to say. Advocating statelessness seems highly unlikely to get many unconverteds to say that. Advocating a 25% or a 10% cut might.

    Now, you may well wish to carry on the cadre-building that MNR laid out in his (in)famous strategy memo, and carp when you see someone CLAIMING to be L but being off the stateless reservation. Those who don’t buy that approach are onto it, if you’ve not noticed.

    tb: Offhand, I’d guess the odds are about the same as Michelle Bachmann, Sarah Palin and me having a three-way tonight (ha, like I would even let those bitches in my home).

    me: Charming.

  17. Michael H. Wilson Michael H. Wilson October 22, 2011

    The function of government is to ensure justice and provide adequate liability laws. All goods and service we now receive can and should be provided through a free and open market. How we get there is the issue.

  18. Tom Blanton Tom Blanton October 22, 2011

    Neither RP’s 25% nor WR’s 10% cut will be enacted.

    I never said it would be enacted or even that the cuts should be enacted. I never expressed which one I thought was better or more likely to happen. You’re the one with the crystal balls, Capozzi.

    I was merely showing once again that Wayne Root is full of shit. Not by the policies he advocates, but rather by his own statement about himself:

    Let me ask you both a question…do you like Ron Paul? Do you like Gary Johnson? Do you think they support spending cuts? If so, you can’t possibly criticize me. I stand for the same kind of massive spending cuts as they do.

    I never said I liked Ron Paul or Gary Johnson, or whether I agree with their positions or anything else. My whole damn point is that Wayne Root does not “stand for the same kind of massive spending cuts” as Ron Paul.

    I did use the word “massive” except to quote Mr. Root. I took quotes directly from Root’s own economic plan to refute his own assertion. It’s all plain and simple.

    So, what’s your point, Capozzi?

    I’m not discussing policy or rhetoric – you are. I’m discussing the simple fact that Wayne Root likes to make claims that have no basis in reality.

    By the way, you are the one who used the word “shocking” and if you had a clue, you would know that I was lying when I said you were right about me trying to be “shocking”. But then again, it seems you have a lot of trouble figuring out when people are lying to you.

    I simply believe in advocating what one believes in as opposed to advocating what one believes is acceptable to some imaginary group of people whose thoughts can be read in advance.

    Unlike you, Capozzi, I don’t have the ability to know what unknown people will think of something I say before I say it.

    In fact, in a forum such as this, I don’t know what reaction some unknown person has AFTER hearing my opinion unless they express it.

    In this thread, I do believe that I have shown that Wayne Root is less than honest about wanting the same “massive” spending cuts that Ron Paul wants.

    Everyone knows I want a 100% spending cut and everyone knows I ain’t gonna get it. You may also be shocked to learn that I am fully aware that it ain’t gonna happen and yet I will continue to call for a 100% spending cut. However, I’d be glad to see Wayne Root’s 10% cut, or Ron Paul’s 25% cut.

    Now, maybe Wayne will give me some odds on that happening. I’m betting that the government will collapse before you see an actual budget cut.

    Offhand, I’d guess the odds are about the same as Michelle Bachmann, Sarah Palin and me having a three-way tonight (ha, like I would even let those bitches in my home).

  19. Jill Pyeatt Jill Pyeatt October 22, 2011

    Steven @ 46: LOL-I was going to google the same thing! 23,200,000 hits re: Root and Obama doesn’t surprise me a bit.

  20. Robert Capozzi Robert Capozzi October 22, 2011

    more to tb…

    Neither RP’s 25% nor WR’s 10% cut will be enacted. Both would be significant improvement to the state of the nation, IMO. Your end the state tomorrow may or may not improve the state of the nation, however, At some point, the risks of a precipitous rolling back of the state could backfire and lead to a worsening of individual liberty.

    What I think you and I are discussing is less policy and more rhetoric. You seem to think that taking the most extreme position is productive; I don’t, since advancing ideas requires adoption of those ideas by large numbers of people, and I don’t see large numbers adopting statelessness as desireable any time soon. I would hope we agree that calibrating rhetoric is art, not science.

  21. Robert Capozzi Robert Capozzi October 22, 2011

    50 tb: It’s a real stretch for Root to claim a mere 10% cut is a “massive spending cut” considering the current level of spending.

    me: It’s “massive” compared with most other proposals, but I agree that RP’s plan is more aggressive. He’s pushed the envelope; my sense is that BECA– USE RP has established credibility, his plan is just plausible enough that he’s not discounted as “too kooky.” Many certainly think he’s too extreme, but I’d say his ideas are edgy.

    tb: Capozzi is absolutely right. I use the “shocking”, but accurate, statement that the federal government spends about $10,000 for every man, woman and child. He’s absolutely right that there are probably people who believe that $10,000 isn’t enough.

    me: Thanks, but it appears you’re missing my point. $10,000 isn’t shocking. I think it’s a rhetorically weak point. Better to use aggregate numbers or spending as a % of GDP numbers.

    tb: The national debt has increased every year for about 50 years. Supposing that most people see this as out of control, why do they continue to vote for people who only increase spending?

    me: It’s more like 30 years, according to the source I just checked. When the economy is growing, people are less concerned with debt, and that’s not entirely unreasonable, since growth dampens the GDP% of national debt. However, in very recent years, it has spiked to over 100%, which is far too much leverage for most. Regardless, people don’t have a credible alternative to vote for, so they vote for the lesser evil or they stay home. I again suggest that most people are just not paying THAT close attention to these sorts of stats.

    51 tb: Idiots are entitled to their own opinions. However, their delusions do not entitle them to appoint proxies to go out and destroy the lives of others.

    me: Hmm, well, they may well not be “entitled,” but they do it anyway. I don’t happen to think that insulting people is a good way to persuade them to stop doing what they’re doing. If someone insults you for doing X, do you appreciate the insult and stop doing X? Or do you decide to steer clear of the insulter and not pay them any mind?

  22. Tom Blanton Tom Blanton October 22, 2011

    In recent years, the intra-asylum argument is about how to undo the debt.

    What it be “shocking” if I were to say that the only ones arguing about this are idiots?

    The answer is simple: cut spending.

    Instead, politicians argue about how much to cut proposed spending increases. They aren’t idiots, they know $10,000 won’t even pay for a membership in a decent country club in the DC area and they know that if they turn off the money tap, their bribes are at risk along with their imperial lifestyle.

    The idiots are the ones who keep voting for these charlatans.

    Some may prefer to characterize these idiots as well-meaning people with an opinion different than mine. But, I’m not basing my characterization of them as idiots because of their opinions, I’m basing it on their repeated actions: voting for liars, crooks, murderers, and sociopaths over and over and over again.

    Idiots are entitled to their own opinions. However, their delusions do not entitle them to appoint proxies to go out and destroy the lives of others.

  23. Tom Blanton Tom Blanton October 22, 2011

    OK, so you disagree with Root on how, and how much, to cut spending. Is that supposed to be some kind of surprise? It remains a fact that he has written frequently, at length, and in detail on cutting spending, not just taxes.

    That’s not the point. Root claims he stands for the same “massive spending cuts” as Ron Paul. Well, that is simply not true. Using Capozzi’s figure of a 25% cut for the first year of Paul’s proposal compared with Root’s cut of 10% shows that.

    I’m not so sure that Paul’s plan really involves “massive spending cuts” as it basically just rolls back spending levels to 2005 or 2006 levels. It’s a real stretch for Root to claim a mere 10% cut is a “massive spending cut” considering the current level of spending.

    I can’t disprove that Root spends as much time talking about spending cuts and debt as he does talking about taxes, but my impression is that he doesn’t. As Mr. Linnabary suggests, Root probably spends most of his time talking about Obama. I’m sure the GOP is grateful for this.

    Capozzi is absolutely right. I use the “shocking”, but accurate, statement that the federal government spends about $10,000 for every man, woman and child. He’s absolutely right that there are probably people who believe that $10,000 isn’t enough.

    There are also people who think America should nuke Iran immediately. There are people who think someone selling a $20 bag of weed should be executed. There is probably someone out there that thinks Wayne Root is the Messiah.

    So what?

    The national debt has increased every year for about 50 years. Supposing that most people see this as out of control, why do they continue to vote for people who only increase spending?

    Stupid? Crazy? At this point, what’s the difference?

    When will there be a tipping point when people say enough is enough? Perhaps never. It seems to me there is a choice between a somewhat orderly unwinding of a failing state or risking an ugly collapse.

    I don’t buy the notion that it is best to tell people who think Elvis is alive whatever they want to hear as opposed to telling them what they really should know.

    So, Capozzi, if you think what I’m saying is shocking, what would you say about hungry thugs are dragging NOVA suburbanites out of their lovely homes? Or perhaps you would prefer being gunned down by cops in the street?

    But, hey, who gives a shit? We’ll probably be dead before it gets that bad. Then it will just be our dumb ass kids that will have to deal with it. Screw the little bastards, let’s live it up now!

    That seems to be the creed in your teat-sucking NOVA neighborhood, Capozzi, and it seems that some of that attitude has rubbed off on you if you are more worried about alienating idiots and lunatics than the “shocking” truth.

  24. Robert Capozzi Robert Capozzi October 22, 2011

    43 tb, my calc says that the RP plan cuts about 25% in year one off the CBO or Obama budgets, less off the FY2012 budget.

  25. Robert Capozzi Robert Capozzi October 22, 2011

    39 tb: I’ll tell you what is nuttier than squirrel turds – a nation of imbeciles that worship clowns like Obama and Romney who think it is acceptable for the federal government to spend $10,000 for each man, woman and child in America. Not only that, but the average American thinks it is acceptable to borrow the money and hand the bill to their own children.

    me: Yes, we live in a vast insane asylum, and few seem to recognize it as such. So when I speak of doing “politics” vs. “theory,” the context is intra-asylum. In the asylum, I see almost no one who is “worshipping” Romney. Obama, there is some “worshipping” I s’pose; ditto, Ron Paul, actually.

    As for “imbeciles,” it’s my practice to judge others not. I have noticed that some Ls seem to want to assess the intellect of those they disagree with politically as “stupid.” I recall having a conversation with a very bright, learned L about Larry Summers, with the L insisting that Summers was “dumb.” Not misguided? Not operating based on flawed premises and a confused thought system? I asked. No, Summers is dumb, he said. It seems obvious to me that Summers, Krugman, Obama and Romney are all very bright people. Near as I can tell, however, they are also very confused and probably at sea in terms of their ethical and moral thinking, too much in the game to see that the game is set-up as a lose/lose/lose situation.

    Consider the possibility, Brother B, that the nation is made up of a wide range of people with a wide range of views and levels of intellect and wisdom. Most are not paying attention as closely as you are to politics and philosophy. Your $10,000 figure might sound, if anything, not high enough to many, and I can see why they do! With so many suffering financially in recent years, maybe that number should be HIGHER, they might conclude…$10,000 just isn’t that much money!

    You seem to want to shock them out of the assumption that redistributing money makes things worse for all, even the least well off. But, really, do you think that approach is likely to work? Or do you just get pleasure out of saying shocking things?

    BTW, I see a lot of reason to believe that most DON’T think it’s acceptable to borrow and bill future generations. Many may think it’s acceptable in the short term, but it appears that most in the asylum see that the debt is out of control. In recent years, the intra-asylum argument is about how to undo the debt.

  26. Thomas L. Knapp Thomas L. Knapp October 22, 2011

    TB @43,

    OK, so you disagree with Root on how, and how much, to cut spending. Is that supposed to be some kind of surprise? It remains a fact that he has written frequently, at length, and in detail on cutting spending, not just taxes.

    MHW@45,

    You’re correct that someone coming across this particular op-ed, never having heard of Root before, will not be aware that he talks elsewhere about cutting spending, not just taxes.

    But, once again:

    1) A good op-ed has a news hook and sticks fairly close to that news hook. The news hook for this Root op-ed was Herman Cain’s tax plan.

    2) An op-ed has limited space / word length in which to make its point. Taxes and spending are both complex topics (especially when the news hook is analyzing a specific proposal relating to one or the other). Trying to address both in a single op-ed would weaken the impact one could have on either.

    3) Venue is an important consideration. The Washington Times is a conservative Republican paper. The news hook Root used reflects that; the point was to make conservative Republicans take a critical look at a conservative Republican’s proposal while getting Root’s name (as presumably a Libertarian) in front of them. I suspect it accomplished that.

    Come on, guys — no one with a brain will mistake me for a Root fanboy, but I’m just not seeing these particular criticisms of this particular op-ed as very justified.

  27. Steven R Linnabary Steven R Linnabary October 22, 2011

    Just for fun:

    Google “Wayne Root” taxes
    and get 35,700 results

    Google “Wayne Root” spending
    and get 16,200 results

    Google “Wayne Root” debt
    and get 12,900 results

    Just for fun, Google “Wayne Root” Obama
    and get 23,200,000 results

    PEACE

  28. Michael H. Wilson Michael H. Wilson October 22, 2011

    Wayne any person reading your article and who never heard of you before would not know squat about anything you have ever said about cutting spending and come away with a different opinion as to what the Libertarian Party is advocating. That is why it is always necessary to mention spending cuts right up front and because spending cuts are one of the best ways to reduce government, but not the only way.

  29. Tom Blanton Tom Blanton October 22, 2011

    I talk about spending and debt as often as I talk about tax cuts.

    Just for fun:

    Google “Wayne Root” taxes
    and get 35,700 results

    Google “Wayne Root” spending
    and get 16,200 results

    Google “Wayne Root” debt
    and get 12,900 results

  30. Tom Blanton Tom Blanton October 22, 2011

    From Root’s “20-point Reagan Libertarian Contract with America”:

    #7) Social Security, Medicare and Medicaid are eating up the entire U.S. budget. They will single-handedly destroy the U.S. economy within twenty years. Social Security can be secured and the debt reigned in with an immediate rise in the age of retirement to age 68 for anyone younger than 55…and within five years raise the age of retirement again to age 70. This phase-in secures Social Security without raising taxes.

    Ahh, a plan to save Socialist Security.

    #7a) Combine this age raise with a Partial Privatization of Social Security for younger workers. This gives younger Americans ownership of their own retirement accounts. Upon death, it belongs to their family.

    Hmm, the Bush plan of forced savings for the young. I believe Ron Paul advocates letting young people opt out of the system altogether. I guess that may be too much freedom for Wayne Root.

    #7b) Convert Medicare & Medicaid into block grants and hand the entire budgets to the states.

    Oh boy! This way the tea party folks can keep their socialized healthcare, er uh, Medicare!

    #12) To achieve a balanced budget, institute dramatic cuts in government spending — 30% across the board cuts for all departments, no exceptions (including military and defense) phased in over 3 years (10% per year).

    First, 30% ain’t the same as 33%. Ron Paul is talking about cutting $1 Trillion in ONE year. That’s about 30% in ONE year, not 3 years.

    It would seem that simple math indicates that the Root plan is not the “same kind of massive spending cuts” Ron Paul is talking about.

    #14b) Phase out ALL foreign aid by cutting out 10% per year for 10 years — thereby giving all our allies time to prepare.

    The Root economic plan talks a lot about cutting unconstitutional spending and programs domestically, so why give foreigners a 10-year time frame to get used to the cuts when the domestic cuts don’t have a 10-year waiting period. Now, are the domestic cuts phased in over 10 years for Israelis living in America? I believe Ron Paul wants to end all foreign aid in one year.

    #14c) Dramatically cut the number of military bases across the globe — specifically Japan, Germany and South Korea.

    What about all the other nations where we have bases? Kuwait, Bahrain, and about 75 more? Ron Paul talks about bringing all the troops home.

    It seems to me that Republican Ron Paul is doing pretty well advocating a more libertarian economic agenda than Libertarian, excuse me, Reagan-Libertarian Wayne Root.

    Doing some more math, cutting 10% per year for 3 years may not even balance the budget. More than likely it would cut the deficit by 2/3, but not eliminate it.

    I’d think a smart guy would be able to do simple math and know the difference between a 10% spending cut in one year and a 30% spending cut in one year. Hell, I’d bet the average Occupy Wall Street protester could figure this out.

  31. Wayne Root Wayne Root October 21, 2011

    @38 and 41

    Guys,

    What the heck are the two of you talking about? You both just happened to forget the dozens of articles & commentaries written by me, and published here at IPR…and all over the Internet…where I’ve lambasted government spending, crucified both Bush and Obama for their reckless spending…

    and identified the spending cuts I want, the massive cuts for government employees, the many govt. agencies and departments I’d cut, the 33% cuts across the board of all govt spending- including the defense budget. No politician in the country talks more about reckless govt spending than me. Smart guys like you managed to forget all that?

    Sorry boys…the one thing you can never nail me on is not being pro-active enough in attacking spending. I talk about spending and debt as often as I talk about tax cuts. Which is pretty much 24/7/365.

    Let me ask you both a question…do you like Ron Paul? Do you like Gary Johnson? Do you think they support spending cuts? If so, you can’t possibly criticize me. I stand for the same kind of massive spending cuts as they do. And I’ve written about it repeatedly.

    As a matter of fact I believe it was Brian Holtz who just recently here at IPR linked to the long list of govt agencies and programs I’d dramatically cut or terminate.

    Best,

    Wayne

  32. Tom Blanton Tom Blanton October 21, 2011

    All this talk about a flat tax and a few deductions and no spending cuts make me think someone got their train on the wrong track…

    I think that might be the Wayne Train. It doesn’t go anywhere near peace, prosperity and freedom – it only stops at Tax Cut City.

  33. Tom Blanton Tom Blanton October 21, 2011

    Here’s another take on the idea that people who don’t pay taxes are more likely not to vote.

    People who refuse to pay taxes don’t really give a shit about which asshole Republicrat gets elected, so they don’t even bother to vote. I can’t think of any reliable way to count these people because they also don’t care to be polled – especially about tax evasion.

  34. Tom Blanton Tom Blanton October 21, 2011

    Hey Capozzi, I’ll tell you what is nuttier than squirrel turds – a nation of imbeciles that worship clowns like Obama and Romney who think it is acceptable for the federal government to spend $10,000 for each man, woman and child in America.

    Not only that, but the average American thinks it is acceptable to borrow the money and hand the bill to their own children.

    That the American voter continues to vote for Republicrats over and over proves they love government more than their own children.

    So, not only are the voters nuttier than squirrel turds, they are bat shit crazy.

  35. Michael H. Wilson Michael H. Wilson October 21, 2011

    I think I’ll have to give up on the Libertarian Party.

    All this talk about a flat tax and a few deductions and no spending cuts make me think someone got their train on the wrong track and I’m about to get run over. Well time to get off the track.

    Someone needs to rethink their Libertarian values. That is if they have any.

    Peace, prosperity and freedom? Nope! We aren’t that party anymore.

  36. Humongous Fungus Humongous Fungus October 21, 2011

    I know, I know!

    99% tax cut for the 1% to be offset by a 99% tax increase on the 99%

    I know, genius, eh?

  37. Moderate Pragmatic Libertaryan Moderate Pragmatic Libertaryan October 21, 2011

    How about a 1% tax cut for the 1%?

    That would be a bold plan that would really differentiate us and get us tons of big checks from disgruntled millionaire Republicans.

  38. Robert Capozzi Robert Capozzi October 21, 2011

    34 yo, nice idea, but I’d put that one in the “nutty” bucket, too…

  39. Yo Ming Yo Ming October 21, 2011

    How about a 99% cut in taxes for the 99%?

  40. Robert Capozzi Robert Capozzi October 21, 2011

    tk, while my guess is that a 100% cut would be viewed as nutty by 99.99%, a 95% cut might only viewed as nutty by 98%. Whether the either outcome is significantly different isn’t up to me, if my swag is close.

    RP’s budget plan to cut roughly 25% is considered nutty by maybe 33%. For me, anything nuttier than that is counterproductive in the political realm.

    I’m good with theoreticians theorizing whatever floats their boat. I would suggest being clear on what role one intends to play.

    TK, you may be right that collapse is more likely than reform. Collapse, however, generally gives way to a replacement regime. That seems especially likely in a territory that has abundant assets.

  41. Hugh Mann Hugh Mann October 21, 2011

    TK, mostly agreed (and yes, I did understand Blanton’s point re: Wagner).

    However, revolutions most frequently occur when there is already reform happening in the same direction as the revolutionists want, and the pace of change is too slow for the revolutionists.

    And, while reform in a smaller government direction is less common than the other way around, there are some historical examples.

    Our best chance for an anarchist revolution is to get minarchist reform first.

    As for what happens during the power vacuum, that will depend on what the culture expects. In a minarchist system, parallel/voluntary institutions are relatively more robust and thus better able to step into the gap. In a more controlled system, they are less able to compete against violent street gangs for control of the power vacuum.

    So, I still think that getting the ball rolling in our direction is more likely to pick up steam and succeed beyond the reformers’ intent than waiting for the system to get too big and fail.

  42. Thomas L. Knapp Thomas L. Knapp October 21, 2011

    @29, @30,

    While Mr. Blanton advocates a 100% reduction in government spending, and I agree with him, I think you’re missing the narrower point he was making, which is this:

    Wes Wagner threw out the idea of a head tax, and set the number at ~$500.

    Blanton pointed out that to balance the budget at that rate would require a 95% cut in spending, and if you’re going 95%, why not just go ahead and take it all the way?

    As for my own proposal, yes, it’s incrementalist and depends on the notion of a reform continuum, a notion which I consider historically unlikely.

    The tax rate is a lot more likely to go form X% to 0% than to go from X% to X%*.8 to X%*.6, etc. down to zero or near zero, for the simple reason that regimes are generally more likely to fail and their leaders get tracked down to hiding spots in drain pipes and assassinated, than to continuously reform in a “smaller government” direction.

    Of course, after that historically more likely outcome happens, the usual (not universal — see e.g. Somalia — just usual) follow-up is for a new regime to seize power and quickly crank the tax rate back up from 0% to something that looks a lot like the old X% or even worse.

    My own view is that rather than horsing around with historically unlikely reform scenarios, it’s better to concentrate on throwing a wrench in the works at the point of the historically more frequent “power vacuum” between regimes.

  43. Hugh Mann Hugh Mann October 21, 2011

    @29 Is that what you really suspect..99.999%?

    Try picking up the phone and conducting a random survey. I would be willing to bet every penny I have (unfortunately not much) — and more if you’ll take my word that I’m good for it — that a lot more people than that agree with Mr. Blanton.

    Not anywhere near a majority, unfortunately, so I’d stick with Knapp’s incrementalist plan – although I believe he agrees with Blanton as well.

  44. Robert Capozzi Robert Capozzi October 21, 2011

    23 tb: Actually, we should be calling for a 100% reduction in federal spending. Let those rent-seeking statists start waving the magic wands while I wave my middle finger back at them.

    me: Thanks for your suggestion, but I think I’ll pass. I suspect 99.99% would find that view nutty, and the middle-finger wave validation of their suspicion. It may play in Blantonia, but then the audience (of one) is the choir singing with an electronic echo chamber! 😉

  45. Robert Capozzi Robert Capozzi October 21, 2011

    tk and cm, the US Census and various other studies find:

    “We find that citizens with more education and income, employed individuals, those who own their homes, those who have a longer length of time at current residence, professionals, women, older individuals, married individuals, and Blacks are more likely to register and vote. We find that naturalized citizens are less likely to register and to vote than native-born citizens, net of other effects. Citizens born abroad in Europe, Latin America, and Asia are less likely to register and those born abroad in Europe and Asia are less likely to vote than those born in the U.S. Among naturalized citizens, those who have a longer length of time at current residence and in the U.S., are older, with more education and higher income are more likely to register and vote. Region of origin was not significantly related to voting and registration among naturalized citizens, once duration in the U.S. was included in the model.”

    I hear CM’s concern about “free stuff,” but the Geoist argument is that it is NOT “free,” it’s a “dividend.” I believe a case can be made that IF we recognize that property rights are imperfectly protected by the seriously and inherently flawed jurisprudence system, then a dividend amounts to consideration for serial (if not proven in court) property rights violations that we all endure throughout our lives. The corporate form alone has economic benefits, but it also has jurisprudential preferences, i.e., corporations can amass capital that most individuals cannot, and therefore “buy” justice.

    So, if the less well-off don’t vote as much, the idea that they would increase the “dividend” through the ballot box seems unsupported. The welfare state has grown, I’d suggest, through middle-class-voter guilt and skillful manipulation by statists and the political class.

    The exception might be seniors, who can be counted on to vote for more booty at non-seniors’ expense.

    Assuaging middle class guilt, and addressing the inherent injustice of uncompensated ground and natural resource rents and the legal system’s limitations, allows me to favor a grand trade-off: cut most of the State in exchange for a citizen’s dividend.

  46. Michael H. Wilson Michael H. Wilson October 21, 2011

    Wow! Someone agrees with me.

    RiaI wrote: A tax vacation of a year is also a non-starter politically, because government would not shut down, and the debt and inflation would skyrocket, eliminating any taxpayer savings.

    The only way spending will be reduced is if there is a constant call for doing so. Repeat and repeat to the point of becoming annoying. Cut that spending!

  47. Root is an Idiot (but we knew that) Root is an Idiot (but we knew that) October 21, 2011

    A 15% income tax is a tax increase on the lower and middle-income taxpayers, plain and simple.

    That makes it a non-starter, especially in a recession.

    A tax vacation of a year is also a non-starter politically, because government would not shut down, and the debt and inflation would skyrocket, eliminating any taxpayer savings.

    A one-year consumer debt vacation with no accrual of interest, and no allowance of further debt accumulation could be useful if it protected jobs and allowed consumers to catch up on debt and payments without penalties, but it would be nasty to the economy.

    What we really have here is Wayne-o doing his usual schlock of taking someone else’s idea, tweaking it, calling it his own, and claiming credit for it like it’s the best thing since his last “great” idea.

    That by itself is telling as to his character, or lack thereof.

    Besides, doesn’t he have a state party to co-operate?

  48. Chuck Moulton Chuck Moulton October 21, 2011

    Tom Knapp wrote (@22):

    I don’t have the means to thoroughly research it, but I suspect that one would find a strong correlation not between not paying taxes and voting for goodies, but between not paying taxes and not voting.

    Yes, but correlation doesn’t necessarily imply causation. If there is causation, what is it?

    You seem to suspect the causation runs that people who don’t pay taxes are less likely to vote. I think it’s far more likely that a third factor causes both those two; namely, that people with low income both are less likely to pay taxes and less likely to vote.

    The former assumption means cranking the personal exemption up would cause less people to vote. The latter assumption means cranking the personal exemption up would not cause less people to vote.

    If the same people vote after changes in the tax structure, then your observation about who generally votes would be irrelevant and my point would stand that the less skin in the game people have, the more they vote to hike taxes and spending at the expense of job creators.

  49. Tom Blanton Tom Blanton October 21, 2011

    Of course if one could wave a magic wand I would support a head tax. Every person of voting age pays a flat amount, say $550 or some other random amount.

    At current levels of spending, the head tax would have to be around $10,000 for every man, woman and child in America. So, a head tax of $500 would require a 95% reduction in spending. Since not every man, woman and child in America works or pays taxes, spending would actually have to be reduced by around 98%.

    Hell, as long as we are waving magic wands, why not call for a 100% spending cut?

    Actually, we should be calling for a 100% reduction in federal spending. Let those rent-seeking statists start waving the magic wands while I wave my middle finger back at them.

  50. Thomas L. Knapp Thomas L. Knapp October 21, 2011

    Chuck,

    I don’t have the means to thoroughly research it, but I suspect that one would find a strong correlation not between not paying taxes and voting for goodies, but between not paying taxes and not voting.

  51. Chuck Moulton Chuck Moulton October 21, 2011

    Tom Knapp (@20):

    Are you saying that because it sounds like it makes sense, or because you actually have some evidence that it’s true?

    Mostly anecdotal evidence from my many friends who don’t like paying taxes, but like free stuff and like giving others free stuff.

    But also I’ve seen many economists make this point, who I’m sure have more robust evidence than I do.

  52. Thomas L. Knapp Thomas L. Knapp October 21, 2011

    CM@16,

    You write:

    “The problem with that is the less skin in the game people have, the more they vote to hike taxes and spending at the expense of job creators.”

    Are you saying that because it sounds like it makes sense, or because you actually have some evidence that it’s true?

  53. Aaron Starr Aaron Starr October 21, 2011

    “Oh,by the way, news that capital gains taxes are zero in 2013 will cause the biggest stock market crash in all history, as the slower folks wait to 2013 and sell everything to collect their profits without having to pay capital gains before the tax rates are changed again, and the smarter people sell as soon as humanly possible to be in cash when the slower people finish crashing the market.”

    Actually, at the margin, people who might normally sell an asset with a built-in gain would be more inclined to wait until 2013 to sell. The effect of having fewer people willing to sell would cause upward pressure on the prices of such assets. Upon the arrival of 2013, many of those people would sell the asset and immediately repurchase it — which would enable them to lock in a higher cost basis for their investment for future capital gains tax measurement purposes.

    Long-term capital gains rates are currently 15% (scheduled to rise to 20% in 2013).

    At the margin, higher tax rates do reduce the appetite of people to risk their money. Conversely, lower tax rates make it more likely that people will want to risk their money in investments.

    And, obviously, to the extent that taxes take money from the private sector to the government sector, it reduces the amount of capital available to risk.

    It’s hard to predict how dramatic of an impact a change in rates would have. While taxes certainly have an impact at the margin, the overwhelming factor driving an investment decision is the prospective investment’s prospects for returns (i.e. the underlying economics).

  54. Wes Wagner Wes Wagner October 20, 2011

    CM @16

    Precisely, and then of course the two santa clause factor comes into full swing.

    Of course if one could wave a magic wand I would support a head tax. Every person of voting age pays a flat amount, say $550 or some other random amount. If the poorest of us can afford it, than apparently we have a government that we can all afford 😉

  55. Jay Wendt Jay Wendt October 20, 2011

    Vote Carl Person!!! He has a plan and it makes more sense the Root’s.

  56. Chuck Moulton Chuck Moulton October 20, 2011

    Tom Knapp wrote (@15):

    I still say that absent outright repeal of the income tax, the best “reform” would be to just start cranking the personal exemption up on a regular, annual basis.

    The problem with that is the less skin in the game people have, the more they vote to hike taxes and spending at the expense of job creators.

  57. Thomas L. Knapp Thomas L. Knapp October 20, 2011

    Darryl,

    It’s an interesting question.

    I’ve always assumed that the “personal exemption” represented some bureaucrat’s calculation of how much it costs for the absolute bare minimum of food, shelter and clothing to keep you alive, above and beyond which everything (electric lights, running water, TV, whatever) is “luxury;” and that the standard deduction (or, if you wish, itemized deductions) represent “business expenses,” above and beyond which everything is “profit.”

    But who knows — it could just as easily be that they told computers to generate random numbers and then plugged those numbers in as “personal exemption” and “standard deduction” just to make things more complicated, and therefore less likely to be questioned. After all, if it’s complicated, the people who designed it must be smart, right?

    I still say that absent outright repeal of the income tax, the best “reform” would be to just start cranking the personal exemption up on a regular, annual basis.

    That way everyone who pays income tax gets a tax cut, some people fall off the tax rolls entirely (reducing processing/enforcement overhead), and nothing else has to be tinkered with, since tinkering is at least as likely to be decided by special interest fuckery as by any rational considerations.

    But that’s just me.

  58. Darryl W. Perry Darryl W. Perry October 20, 2011

    @13 – that’s why I also reworded the question a different way.
    Another way to word that question: Why are people not allowed to deduct ALL living expenses before being taxed on earnings?
    All business expenses are deducted before determining profit.

  59. Thomas L. Knapp Thomas L. Knapp October 20, 2011

    @12,

    “Why are businesses only taxed on [every dime, minus certain deductions], yet every dime made by an individual (minus certain deductions) is taxed?”

    See what I did there?

    Right now, at least the first $9,500 of an individual’s income ($3,700 personal exemption, $5,800 standard deduction) is exempt from the federal income tax.

    That’s essentially a “one size fits all” version of the deduction of expenses from revenues to get taxable profit that’s applied to businesses.

  60. Darryl W. Perry Darryl W. Perry October 20, 2011

    Personal income should NOT be taxed! Can anyone answer the following question:
    Why are businesses only taxed on PROFITS, yet every dime made by an individual (minus certain deductions) is taxed?
    Another way to word that question: Why are people not allowed to deduct ALL living expenses before being taxed on earnings?

  61. Robert Capozzi Robert Capozzi October 20, 2011

    10 atbaft, yes, a moratorium would but some downward pressure vs. abolition. But it’d be a moratorium for a calendar year. Downward pressure is not a crash.

    If, say, there IS a huge crash in 2012, for ex., then existing capital gains would be wiped away. Capital gains taxes can affect the timing of sales, no doubt, but to assume a crash seems to miss the many other factors why people sell and when they sell.

  62. ATBAFT ATBAFT October 20, 2011

    #9, I’d tend to agree with you, but #1 is closer to the mark. Why? Because it is a one year moratorium, so there would be a rush to sell.
    If it was permanent, then buyers who aren’t in the market because eventual cap gain taxes are factored in the risk equation will rush in.
    [Yeah, I know, buyers and sellers are always in equilibrium, but prices aren’t.]

  63. Robert Capozzi Robert Capozzi October 20, 2011

    1 gp, care to share a theory about WHY a capital gains rate of zero a year off crashes the market? I would think “smart” investors would take a wait-and-see attitude. I’d think that those who were inclined to sell in a year would only do so IF they had very large returns that they want to monetize penalty-free. But they’d have a full year to do so. Would they sell their all positions on Jan. 2, 2013, or just selective ones where their gains were extraordinary? Is the CURRENT cap gains rate so high that a 0 rate is ALL that compelling.

    Generally, the big institutions move the markets. Individuals don’t. So, if say 25 year veteran from Microsoft decides to sell her stake in MSFT in 2013, that’s a lot of return for her, but a tiny position.

    The institutional investors generally rebalance their portfolios at least quarterly (some do it daily!). Huge returns don’t build up on their books generally.

    So, if the 25-year MSFTer sold, say, 200K shares, it MIGHT cause a TICK down, but institutions might view that as a buying opportunity.

    The Bush capital gains rate reductions didn’t crash the market when they were put in place. I don’t track with your theory, which I can’t think of a close analogy.

    ____

    No quibbles with Root on this one, although I would have taken it in a different direction.

  64. Michael H. Wilson Michael H. Wilson October 20, 2011

    From my perspective someone reading it for the first time might wonder how we get around all that spending. I don’t think it is impossible to point out the need for spending cuts to accompany the tax vacation.

  65. Thomas L. Knapp Thomas L. Knapp October 20, 2011

    Michael @ 2,

    Just because Wayne says nothing about spending here, that doesn’t mean he says nothing about spending.

    You get a certain amount of space for a newspaper op-ed, and it pays to focus. Wayne focused.

    A newspaper op-ed should riff on something currently in the public mind. Cain’s “9-9-9 plan” is currently in the public mind, so Wayne riffed on it. It’s a tax plan, not a spending plan, so his response was about taxes, not spending.

    While I don’t agree with every jot and tittle of it (if I were offering something of this type, it would eliminate ALL social engineering deductions but grandfather existing mortgages), it’s a pretty damn good piece.

  66. Brian Holtz Brian Holtz October 20, 2011

    Re: Root on cutting spending, recall that in his 2008 campaign he proposed eliminating a massive list of government agencies. I later massaged his list into this.

  67. Jill Pyeatt Jill Pyeatt October 20, 2011

    I’d like to say that my comments @ 3 are regarding the general tone and message of the article. I’m not an economist so I’ll let others discuss the actual content of Wayne’s economic plan. The idea of a year-long tax vacation seems like a a good one, though.

  68. Michael H. Wilson Michael H. Wilson October 19, 2011

    Let me try getting the word across another way. here is one of the better Economists in the U.S. on housing issues.

    http://economix.blogs.nytimes.com/2009/02/24/killing-or-maiming-a-sacred-cow-home-mortgage-deductions/?em

    February 24, 2009, 7:40 am
    Killing (or Maiming) a Sacred Cow: Home Mortgage Deductions

    Edward L. Glaeser is an economics professor at Harvard.

    The Great Depression provided an opportunity to rethink old policies in a major way. In the current morass, everything should, once again, be open for debate. One sacred cow that has long been in need of a good stockyard is the home mortgage interest deduction.

    So, in the spirit of libertarian progressivism, I suggest gradually reducing the upper limit on the deduction to loans of up to $300,000, and then refunding the tax revenues in a more productive manner.

    The tax code allows homeowners to deduct the interest on loans used to buy, build or improve a home, for mortgage principals up to $1,000,000. (For mortgages used for other things – say, to finance the purchase of a car, or pay for college tuition – homeowners can deduct the interest they pay on loans of up to $100,000.)

    A wide range of economists have long found fault with the deduction. Here are a few of the reasons:

    Problem #1: Subsidizing interest payments encourages people to leverage themselves to the hilt to bet on housing markets. The size of the tax benefit is proportional to your debt. The deduction essentially encourages us to make leveraged bets on the swings of the housing market. That leverage means that housing price swings can easily wipe people out. We are currently experiencing the consequences of subsidizing gambles on housing.

    Problem #2: The deduction pushes up prices in places where the supply of new homes is constrained, as it is in many coastal markets. Economics 101 teaches us that if we subsidize demand where supply is inelastic then the only effect is to make prices go up. Housing supply is pretty constrained in places like New York City because of land-use restrictions and lack of land. In these places, the deduction doesn’t make housing more affordable. It just transfers money from buyers to sellers, and that makes little sense.

    Problem #3: The deduction is wildly regressive. The tax savings for households earning more than $250,000 is 10 times the tax savings for households earning between $40,000 and $75,000 a year, according to recent research by James Poterba and Todd Sinai.

    If there ever was a case for small-government egalitarianism, then this is it. Eliminating the home mortgage deduction and replacing it with an across-the-board tax cut would equalize after-tax incomes without a single new government program.

    Problem #4: The deduction encourages people to buy larger, single-family detached homes, and that increases carbon emissions and pushes people out of cities. The deduction encourages people to buy more expensive homes, which are generally bigger homes.
    Bigger homes use more energy. The deduction is therefore implicitly urging Americans to run higher electricity bills and spend more on home heating. If global warming is a serious problem, then the government should be encouraging us to live in smaller, not bigger, dwellings.

    Problem #5: The home mortgage interest deduction is poorly designed to encourage homeownership, which is, after all, the alleged desideratum. Much of the interest deduction’s benefits go to richer Americans who are likely to own homes in any case.
    Poorer people who are on the margin of buying and renting often don’t even itemize. My own research in this area found that when the value of the interest deduction rose, during periods of high inflation, there was no observable increase in the homeownership rate.

    If the goal of the deduction is just to increase homeownership, then it would make far more sense just to give a flat tax credit to people who buy homes. If the credit was independent of home value, then this would eliminate the incentive to buy bigger homes. If the credit was independent of borrowing, then this would decrease the incentive to over-borrow.

    Now, I do understand that drastically reducing the cap on the mortgage interest rate now, in the midst of a housing crash, would be kicking the markets when they are down. Yet this crisis provides us with an opportunity to act that will be lost if we wait until housing prices rise again.

    So here is my utterly quixotic proposal. Enact legislation now that will gradually decrease the cap on the mortgage principal for which homeowners can deduct interest payments by $100,000 a year over the next seven years until it hits $300,000.
    The effect during the next two years should be sufficiently small that it will be unnoticeable in the current environment. Ending the madness of encouraging Americans to bet everything on housing, we can hopefully reduce the odds of a tragic repeat of the current boom-bust cycle.

  69. Jill Pyeatt Jill Pyeatt October 19, 2011

    Well, I’d actually like to praise Wayne for this article. It’s very positive, and shows some genuine creativity. It’s refreshing to have an article with no mention of Obama. A suggestion might have been to mention the LP, perhaps with a phrase like “the Libertarian party has many suggestions of where to cut spending” with a link to some articles that talk about that. I also appreciate that there was no mention of the Tea Party.

  70. Michael H. Wilson Michael H. Wilson October 19, 2011

    I must be totally Fu#*in’ Crazy. Wayne wants to cut taxes but says nothing about cutting spending. The bill for the spending will eventually have to be paid and that means money. In the mean time some how the money will have to be raised and that probably means issuing more bonds which will compete with private businesses for what credit is available.

    Then there is Wayne’s own personal favorite socialistic program, the mortgage interest deduction, which is a favor to a certain class of people (if the rich don’t get their hand out the poor ain’t gonna get no damn jobs. By the way boy you lucky if I don’t run your ass outa town before sunset).

    BTW the MID drives up the cost of housing and that creates pressure for more government handouts. We might call if the government revolving door. On government program creates a problem that can only be solved by another government program.

    Wayne needs an Econ 101 book. Anyone got a spare?

  71. George Phillies George Phillies October 19, 2011

    Funding the plutocrats — no tax on capital gains — while others carry the burden.

    The notion that dropping the tax on capital gains from 15% to 0 doubles the money you have after taxes, when you retire, seems to involve some new math.

    It was unclear whether social security taxes are included in this tax holiday, so we should let Wayne explain this little detail.

    Social Security is the major tax on the income of more than half of all Americans, so it matters what this plan does to it.

    Oh,by the way, news that capital gains taxes are zero in 2013 will cause the biggest stock market crash in all history, as the slower folks wait to 2013 and sell everything to collect their profits without having to pay capital gains before the tax rates are changed again, and the smarter people sell as soon as humanly possible to be in cash when the slower people finish crashing the market.

    On the other hand, imagine headlines like “Google and Microsoft team up; they buy the entire Dow Jones average, every share in it.”

    George
    who is not entirely ignorant of investing, in that he averaged 10% a year return for the past five years.

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