Category Archives: Fiscal Policy

Greece, Destroyer of Worlds.

Eurozone map in 2009 Category:Maps of the Eurozone

Since the end of the Cold War, the nations of the world have become increasingly interdependent. Interdependency is the idea that relations among states within the international system are mutually dependent and inextricably tied together. In theory, interdependency will lead to peace as war among the dependent nations is no longer feasible. A perfect example is the European Union and its pacifying impact on Europe. The history of Europe is as long as it is violent. Nevertheless, the region has been relatively peaceful ever since the nations of Europe became economically interdependent.

However, interdependency has a dark side. In this new era of globalization, sovereign nations can find themselves held hostage by the economic policies of other states. Imagine the impact on the world economy if Saudi Arabia decided to cease all oil production or if the United States instituted a trade embargo on all foreign products. The current Greece debt crisis is a real-world example of how the economic policies of one nation can severely hamper the economies of the entire Euro-zone, the United States, and the world.

With the aftermath of the recent economic recession and the impact of international trade agreements on domestic economies, should not the United States, as well as the nations of the world, strive to be self-sufficient?



Weekly Quiz: Test Yourself on this Week’s Events

The weekly quiz is now live in Mypoliscilab. Good luck!

The Tool of Taxation

Old hammer during reconstruction of the buildi...

Old hammer during reconstruction of the building in Pleszew. (Photo credit: Wikipedia)

In graduate school a professor of mine often referred to the “toolbox of government.”  The characterization must have resonated with me because I still use it in my own classes almost fifteen years later.  Of course he was referring to the variety of actions that governments at all levels have at their disposal to implement and otherwise enforce public policy.  For our purposes we can narrow the contents of the “toolbox” down to the bare minimum:

  • The power of government to deprive a person of liberty (think incarceration and in the most extreme form, the death penalty)—the hammer.
  • The power of government to deprive a person of property (think real property and money)—the hammer.

Confused?  Don’t be.  Chief Justice John Marshall (1801-1835) is credited with expressing the position that the power to tax is the power to destroy.  In this regard the power to tax is the power to punish those who violate the law, ignore regulations, or otherwise challenge the general welfare—the hammer.  The power to tax citizens and residents, businesses, corporations, is generally available to most governments—from Congress to your local water district.  Check your text books, one of the first concurrent or shared powers listed is the power to tax.  Moreover, taxes are ubiquitous—fees: taxes; assessments: taxes; dues: taxes; levies: taxes; taxes: taxes.  The power to tax is the power of government to deprive.

In the months following the Supreme Court’s decision on the Affordable Care Act (Obama-care) , much will be made of the taxation aspect of the now upheld health care reform package—especially the individual mandate, which requires people capable of paying for health insurance to do so or risk a penalty (tax).  What do you think, is it the most intrusive tax ever devised by government (in this case by democrats)?  Is it a new tax?  Is it a tax increase (even though it only applies to people who don’t buy their own health insurance—and wouldn’t we otherwise call these people free-riders or equate them to people who don’t buy car insurance and drive up all of our rates)?  With all the hammers we get hit with every day, is this the one we’re really going to object to?  Ouch!  I know how to fix it; where’s my hammer?!


Weekly Quiz: Test Yourself on this Week’s Events

The weekly quiz is now live in Mypoliscilab. Good luck!

Weekly Poll: Your Opinion on Payroll Tax Cut

Congress recently extended payroll tax cut for millions of working Americans; some are concerned about the effect on Social Security benefits in the future. What do you think?

National Debt and Paying for Public Goods

I just recently checked to see how much each person currently living in the United States owes toward the national debt.  As of today (mid-October 2011) the figure is:


In other words, even after the taxes I paid last year and the year before (etc.) I still owe the above amount in future taxes just to help pay off the current outstanding debt.  And,

  • This is if we stopped increasing the debt as of NOW
  • This may not include interest (which we now know can take a hit based on what Congress and the President do or don’t do)
  • I don’t know how this figure treats corporations and businesses (which we now know that a majority of the members of the Supreme Court believe to have many of the same rights as individual people)

But back to what I owe.  I am fifty-two years old and hope to be a tax-paying American for at least another thirteen years.  That comes out to about $3668 a year over and above what I will be paying in taxes that pay for government programs and services that do not add to the debt.  And if I live to be eighty the figure drops to $1703 a year over and above what I will be paying in taxes that pay for government programs and services that do not add to the debt.

Taxation of citizens and residents by government may be necessary to pay for public goods that are deemed necessary and important by a society.  Maybe the most important part of that concept is to “pay for public goods.”  In other words, we should be taxed to actually pay for what government does.  Robert Smith puts a different spin on the national debt by looking at the last time it was completely paid off.  I don’t know about you, but there has to be a difference between massive cross-generational debt and responsible use of debt to finance some parts of our public load.  What do you think?


Barack Obama Unveils the “Buffett Rule”

It doesn’t take a rocket scientist to understand that the U.S. needs money, but conservatives think Barack Obama is waging class warfare by taxing the rich.

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