Fritz Efaw wrote:
> Another example of a mis-application of the free market fairy tale:

Uh, not all of us, nor all economists, are buying Fritz's oft-repeated assertion
that the benefits of free markets are a fairy tale.  (Maybe it's just the
Marxist economists :)  I suspect that Dr. Walter Williams (the syndicated
columnist and distinguished professor of economics at George Mason, not the
retired city judge) and Dr. Vernon Smith (Nobel Prize winner in economics), both
of whom have spoken on our campus, might disagree.  And those guys are virtually
as well qualified as Fritz :)

> Since education is in some sense a durable good, whose benefits extend
> into the future, an efficient market should enable buyers to borrow
> today and repay the loan tomorrow when the benefits accrue.

It does.  You can borrow money for education now, and it doesn't even have to be
guaranteed by a federal agency.

> In the case of education,
> there is nothing to secure the loan, so it doesn't take place.

Sure it does.  All the time.  There are such things as signature loans, and if
the bank won't give you one of those, there are other sorts of collateral one
could put up against a loan.  And of course there is always the now-discredited
practice of delaying gratification by working on the "front end" to save money
for education to be obtained later.  But we are a culture of borrowers, so that
doesn't go over so well.

> Slavery or indentured servitude would overcome this barrier, and that
> may be the paradigm shift Prof Dumas has in mind.  After all,  if one
> doubts the wisdom of the 16th amendment, similar doubts about the wisdom
> of the 13th amendment on grounds of states' rights can't be far behind.

Wow, collegiality has really taken a beating lately.  First Mike Russell wants
me to quit, and now Fritz is insinuating that I support slavery.  Well that's a
hit below the belt any way you want to look at it.  It's hard to have
intelligent discourse if all the other side wants to do is sling mud.

Not only is Fritz's comment a low blow, it is truly ridiculous.  Those of us who
doubt the wisdom of the 16th amendment -- and there are many more of us than
Fritz would probably like to know about -- feel that way in part *because* we
view an income tax as a form of slavery.  And I, for one, am thoroughly against
that, despite Fritz's insinuations to the contrary.

Put in an economic sense, if you are truly free you control 100% of the fruit of
your labors.  If you are a slave, someone else controls 100% of what you
produce.  If you or I have 30% of the fruit of our labors taken away before we
even get to see it, then we are only 70% free.  In that case, 30% of our effort
is forced labor on the behalf of someone else ... what do you call that but
part-time slavery?  I think if Fritz is really on the side of the working people
(proletariat?) then he ought to be firmly against an income tax.

> Most advanced
> industrial nations have a similar view of health care; the US does not.

Most "advanced nations" are even more socialist than the US; their economies are
correspondingly weaker and their citizens less productive.  The US economy could
be much stronger if the level of government spending (and thus taxation) as well
as regulation (an indirect form of taxation) were lower.  Free, decentralized
markets beget prosperity; centralized planning and control do not (see former
Soviet Union).

> The paradigm shift I would prefer is for
> work to become a moral virtue and community obligation,

How about an individual obligation (assuming one doesn't wish to starve or
depend on voluntarily given charity).  If you want stuff, be it food or health
care or a new car or whatever, you work for it and it's yours.  If you truly
can't do that for reasons outside your control (not just from laziness) then I
feel very confident your neighbors will help you out long enough for you to get
back on your feet.

How about a paradigm shift to more individual freedom, more individual
responsibility (the flip side of the same coin), and government limited to its
constitutionally authorized functions.  Now there's a novel concept, fresh from
the 1770's - 1780's :)

> and for an end
> to labor as a commodity.  Unfortunately, that battle was lost some five
> centuries ago, and it seem likely it will take at least that long to
> reverse this particular setback to civilization.

I feel pretty good then.  I only need to turn the clock back about 200 years, to
the Jefferson presidency or thereabouts, to get my paradigm shift.  Here's hoping.

Chris Stuart wrote:
> He's pointing out the apparent inconsistency in being avowedly Libertarian while picking up a state check at the end of every month. Frankly, I think it's occurred to most of your readers before that all your Libertarian arguments would be a tad more convincing if they didn't come from a guy who currently makes a living off of the state.

I've certainly heard that argument before.  Just curious, would you agree with
me if I *didn't* work for UTC?  If so, I'll get one of my private-sector
libertarian friends to send you an email covering the same points, and then
you'll be won over :)

It may not have occurred to you if you don't have a lot of libertarian friends,
but there are degrees of "libertarian" in the same sense that some people are
more "liberal" or more "conservative" than others.  I am actually a pretty
moderate libertarian in the sense that I accept that government is necessary for
some purposes, and that because of that it may be necessary to have some level
of taxation.  (Although I would prefer to rely on user fees or voluntary
support, for example a lottery, as much as possible.)  There are some
"anarcho-libertarians" who believe in no government at all, but I'm not one of
them.  I am a minarchist rather than an anarchist; I want government to be as
small and efficient as possible while carrying out its necessary and authorized
functions.  You could call me a "constitutionalist libertarian" and pretty much
hit the nail on the head.

With that said, I don't have a problem with working for the state of TN, nor do
I think it pokes a hole in my arguments.  The state constitution explicitly
authorizes (in Article XI, Section 12) spending for education.  As such, it is a
legitimate government function at the state level (but not the federal level).
Now, some hard-core libertarians would argue for amending the state constitution
to privatize education ... and maybe that is worth considering (after all, just
about everyone who has been around here a long time seems to think the days of
the private University of Chattanooga were the good old days) ... but for now,
it's duly authorized and that is that.  Many of the other functions (for example
health care) that have been taken over by the government in recent years have no
such sanction.  My position is that these functions should either be
specifically authorized by constitutional amendments, or discontinued.  And at
least I think my friend Dr. Hiestand agrees with me on that.

> Two of your statements are particularly revealing. The first is that you say that you are more sympathetic towards the taxpayers than the poor who need healthcare.

I am sympathetic to everyone who needs health care.  Years of constant
intervention and regulation by government have driven the cost of it way beyond
the ability of the average person to pay.  The FDA regulations alone, that delay
the introduction of new drugs for years, sometimes decades, not only drive up
the cost of medications but cost thousands of lives that might have been saved
by having those medicines available sooner.  Statistically speaking, for every
Thalidomide tragedy we prevent, we delay dozens of other drugs while people who
need them die.

Government provision of health care drives up the cost because everyone consumes
more when it is "free".  Or why else is the average number of prescriptions
everywhere else in the country about 10, and on TennCare it is 30?  I don't have
to go back to Jeffersonian times for a better example ... when I was a child in
the 1960s, my parents paid cash for my health care and they were lower middle
class at best (my dad was a fireman, and if you think UTC faculty and staff are
poorly paid, you should try living on what they make).  There were charity
hospitals for those who couldn't afford the relatively moderate cost of paid
care.  Then along came Johnson's "Great Society" programs (truly one of the most
egregious misnomers of modern times) and before you knew it, no one could afford
health care anymore.  Government involvement is not only not the solution, it is
the biggest part of the health care problem.

BTW, if you are really interested and not just arguing for the sake of pulling
my chain :) you might read the book _Healing Our World_ by Dr. Mary Ruwart.  Any
notion that libertarians (and she's a pretty hard-core one) are stingy,
heartless b****rds who hate poor people will be quickly dispelled.  It's because
we care about *all* people (poor, middle class and rich) that we want to
decrease the size of government and give all of them more freedom.

But, yes, I am *more* sympathetic toward those who pay higher taxes to support
unauthorized government programs, and because of that have less money to spend
on health care and other necessities for themselves and their own families.
Working hard, whether it is here on campus educating students, or digging
ditches, or writing software, or selling insurance, or whatever ... and then
seeing the fruits of your labor skimmed off before you even touch them ... is
not a good feeling.  And thus I will oppose to the last breath that most
oppressive and insidious of all taxes, an income tax.

> The other enormously revealing statement is your description of a Utopian American past

No, sorry, libertarians don't believe in Utopia.  Seriously, Cliff Parten in
Engineering (a far more "north-wing" (we don't go left and right :) libertarian
than I am, if less prolific on Raven) had that saying posted on his door for
years.  "Utopia is not an option."  There always have been, and always will be,
problems in a society made up of fallible human beings.  While these problems
cannot be cured, they can best be ameliorated by more freedom rather than more
government.  Society wasn't perfect 200 years ago, but in some ways it was much
better than it is now.  Couple modern advances in science and technology with
our hard-won appreciation that women and minorities have an equal right to share
in freedom, but downsize and decentralize government to the point where it was
then, and you might not have Utopia, but my guess is that we would be a lot
closer to it than we are.

> Joe, I have no faith in the generosity of the individual American citizen to take care of society's ills

Gosh, it must be horrible living like that.  Seriously.  If you have that
negative a view of the average American, now I understand why you embrace
socialism.  (Though why not go whole hog and just endorse communism?)  You seem
to be saying that we humans are selfish and weak, and we need the government to
protect us from ourselves.  The problem with that is, the government is run by
humans, too.  So if we truly are such heartless and miserable creatures, the
government is not going to save us from our fate.  Fortunately I'm an optimist
and I think that there is more good than bad in human nature.  I say give
freedom a chance and see what happens.  The increasingly socialist system we
have now is not working all that well....

> adopt some new principles that allow for a little mercy, a little human weakness, the imbalances of a free market economy, realities like economically instituted racism

Libertarianism *does* embrace those principles, to a far greater extent than
socialism.  The best medicine for society's ills is freedom.  Read _Healing Our
World_ with an open mind.  It'll give you a new perspective on a philosophy that
you obviously (given your stereotype of libertarian beliefs) don't yet fully
understand.

Jim Hiestand wrote:
> Joe is right that there is nothing in our national Constitution to
> allow that government to support a general health care plan.

At last, someone in agreement on at least some points :)

> But the
> Tennessee Constitution does not seem to have an enumerated list of powers as
> in Art. 1 Sect 8 of the U. S. Constitution and health care is not
> prohibited.  Therefore I conclude that TennCare or the equivalent is
> constitutional in Tennessee.

Well, you are right that the TN Constitution is much less specific and, frankly,
less well organized than the U.S. Constitution.  (With that document for a
model, you'd think we would have done better ... but we have what we have.)
There is, unfortunately, no "Tenth Amendment equivalent" that blatantly states
that all powers not delegated are reserved.  However, I contend that this is
strongly implied by the nature of republican, constitutional government (since
all power comes from We the People, any power not expressly delegated to the
state is by definition reserved to individuals) and also by the fact that other
functions, such as education, *are* specifically authorized.  If it weren't
necessary to authorize government functions explicitly, why are some, in fact,
explicitly authorized?  The fact that certain powers are mentioned in the
constitution, logically, implies to me that those powers that aren't mentioned
are not authorized.

Even if you disagree with my interpretation of the TN constitution and continue
to maintain that state-funded health care is ok, you have to admit that TennCare
is 2/3 financed by clearly unconstitutional federal dollars.  So if you want a
state health care program, you should advocate the state of TN paying for all of
it, not just 1/3.  Of course, that really would bankrupt the state.  It's only
the fact that it is 66% subsidized by "free money" (of course, paid out of those
federal income taxes that we never see because they leave our paycheck before we
get it) that has kept TennCare afloat for 10 years.  But now something is going
to have to give -- even our Democratic governor can see that.  It's amazing to
me that many of my faculty colleagues can't.

> I frankly do not know how to deal with the problems we have
> for ever-increasing health-care costs aside from encouraging preventative
> care.

Try drastically *reducing* government involvement in all aspects of health care.
  Trust me, it can't do anything but help.

> Taxes generally may be applied for two purposes: to raise money to
> pay for government expenses and to encourage certain behaviors.  There is
> less justification for the latter in my opinion

None, in my opinion.  The only legitimate reason for taxation is to fund
constitutionally authorized government functions.  Behavior modification is for
parents, not the legislature.

> but taxing cigarettes to
> discourage smoking and gasoline to encourage economic fuel use are two
> examples

I actually don't mind gasoline taxes ... I look at them as a user fee ... just
more convenient to collect at the pump than by having toll booths everywhere (as
some more radical libertarians would propose).  Those who drive more and/or
drive heavier vehicles that put more wear and tear on the roads pay more.  As
long as the money goes to maintain the roads, that is fair.  If the money is
siphoned off for other purposes then it is no longer a user fee.  And again, I
don't agree with using taxes for behavior modification.

> Tax policy should be based on three considerations: it should raise
> sufficient revenue to cover costs, it should be efficient, and it should be
> equitable.

Agreed.  I think we only disagree on what is "equitable."

BTW regardless of equity, income taxes lose on the efficiency criterion.  No
other tax requires so many people (everyone who works!) to deal with paperwork.
  The federal tax code alone wastes billions of man-hours in compliance ...
hours that could otherwise be spent productively.

> Joe has a point that paying sales tax does give everyone a stake
> in government, even if small.

Right.  Thanks for acknowledging that :)

> But such taxes are not equitable.

It depends on what you consider equitable.  I think the *most* equitable system
would be one in which everyone pays the same amount.  After all, it doesn't cost
any more to educate a rich person's child, or patrol his neighborhood, or pave
his roads than it does for a poor person.  (In fact, one could argue that rich
people make less use of state services since they aren't on TennCare, often send
their kids to private schools, etc. but, to keep it simple, we could assume that
everyone uses the same services.)  So, take what it costs to run the state,
subtract user fees (which ideally would cover the bulk of costs), divide by the
population, and give everyone a bill for that amount.  Now *that* would keep the
size of government to constitutional limits!  Everyone's tax burden would be low
because the bill would have to be kept small enough so that even poor people
could pay it.

Admittedly that idea has little chance of being implemented because we are too
used to "soaking the rich" to give up on it easily.  The next best thing is what
we have in TN:  a sales tax whereby those who spend more pay more, but at least
the rate is constant so that everyone pays the same percentage.  And, a sales
tax (as opposed to an income tax) encourages saving rather than spending.  So,
those of you who *do* believe in behavior modification through tax policy should
love it. :)

> People
> with incomes higher than average like Joe and me should not pay a smaller
> portion of our incomes than someone making considerably less.

Actually it should be about the same proportion, discounting the savings factor.
  If you make twice as much money as I do and we both spend it all in a year,
you will pay twice as much in taxes because we are both taxed at the same rate.
  But even considering "real-world" effects that skew that somewhat, I don't see
a problem with those who make less paying a higher percentage.  (Paying a higher
percentage of less money is still paying less, after all.)  The unfortunate but
true fact of life is that people who make less money pay a higher percentage of
their income for *everything*.  Bread, milk, clothes, shelter, transportation,
you name it, lower income people pay a higher percentage of their income for
*all* of it.  Why should government services be any different?

> I think anything but a strict constructionist or related reading such as
> original intent is intellectually dishonest.  It also breaks faith with
> those who ratified the original or its amendments.  As an historian of
> American history you know better than I how the Thirteen Colonies feared
> the concentrated power of a national government following their independence
> and sought to limit its power by a written constitution that was vigorously
> debated before being ratified.  Legislators and Supreme Court justices have
> no right to ignore or authority to amend the Constitution than a
> parliamentarian has to amend Robert's Rules.

Amen, amen, amen.  Thank you, Jim!  I'll make a libertarian of you yet :)

> Special to Joe: you have several times pointed out that the
> Tennessee constitution limits the growth of appropriations to the rate of
> growth of the economy.  But the next sentence in Art II, Section 24 says the
> General Assembly may exceed this amount if they so state in a law.  This
> makes the limitation on appropriations toothless, it seems to me.

Yes, another example of how our TN constitution (like the U.S. Constitution) is
good but imperfect, and justification for the process of amendment.  That is a
loophole that is clearly in need of fixing.  Ready to circulate some petitions?  :)

> Radical idea:  let's do away with corporate taxes entirely
> and shift it all directly to individuals.  Corporations don't really pay
> taxes anyway; they just pass them on.  But they employ a lot of tax lawyers
> and accountants to fool the tax man (e.g. Enron.)  Let them merely try to
> fool their shareholders and let the free market decide.  This will cause
> some unemployment among tax lawyers and accountants.

Equally radical, counter-idea:  Let's do away with individual taxes entirely and
shift it all to corporations.  After all, the state is a creation of individuals
and thus supposedly subservient to them, while corporations are creations of the
state.  Thus, they can be seen in a sense to owe tribute to it, while
individuals should be above having to forcibly part with their money to an
organization that is supposed to be their servant, not their master.  So, let
the corporations pay all the taxes and they can pass them along to their
shareholders and the buyers of their products and services.  And, as you say,
the free market will decide.  Those corporations that do this most efficiently
will flourish, those that don't will perish, and none of us individuals will
ever have to fill out a Form 1040 again!  (And this will cause even more
unemployment among tax lawyers and accountants, since there are a lot fewer
corporations than citizens.)

Whew.  That's all for me.  I'm glad to have provoked so much spirited
discussion, but there are too many people writing and I'm responding (almost)
alone (thanks Jim and Ron Goulet, as well as those who have written me
privately).  I have two stacks of papers sitting on my desk awaiting my
attention, not to mention loads of other work.  So, I am signing off RAVEN for a
while.  Talk amongst yourselves ;) or get back to work, too, as you choose.

"Liberty Joe"