Government Meddling in the Economy is Wrong For America, Mrs. Clinton
This debate cycle is truly frustrating for any conservative hoping to pull the lever for the lesser of the two evils available to them. Throughout these last months the Democratic nominee, stained by corruption, contradiction and seemingly endless scandals, was made to look like the more "presidential" candidate relative to Mr. Trump. What is frustrating is the lingering feeling that if conservatives had a more refined candidate who understood the issues better, Clinton wouldn't stand a chance.
Her debacles would be exposed the way they were by the moderator Chris Wallace in the last debate. After denying her support for open borders, Wallace quoted her past speech given to a Brazilian bank and recently exposed by WikiLeaks where she said: “My dream is a hemispheric common market with open trade and open borders”. He then asked her to explain the disparity, and she said that during the speech, she was referring to energy trade being open, not our American borders. Her response is misleading and factually inaccurate given the context of the speech where a reference to energy trade wouldn’t make sense. Trump should have pressed the issue and then spoken on the various gaffes brought to attention by WikiLeaks. Instead, due to his lack of discipline or knowledge, he allowed her to pivot to the topic of Russia and then, for no reason whatsoever, continued to defend Vladimir Putin, giving Clinton the luxury of escaping with another egregious lie only recognized by those Americans who follow the issues closely. It is rare that a Republican gets a platform of more than 65 million people at once to make the case for conservative ideas and this is just a glimpse into the broader campaigns. It would have been nice to have a candidate capable of making that case.
Conservatives, at the end of the day, strive for the best possible future for the American people. We want strong economic growth, quality education, secure borders, reliable allies, healthy families, and a general well-being for all Americans. And the truth is, there are time-tested principles and positions that have historically been successful in achieving those goals and, likewise, positions that fail to bring about success. Democrats and Republicans differ greatly on the role of government in an economy, one of the biggest concerns for the American people in this election, and this is prominently displayed in both candidates’ policies. In a society, the economy flourishes best when the government is limited only to fostering the best possible platform for voluntary exchange. It is imperative for the American people to elect a candidate who understands this, and unfortunately, Mrs. Clinton does not.
It is important to remember that voluntary exchange in a free market is the system most capable of producing economic growth. The idea rests on the principle that free market competition forces competing individuals to produce a superior product at a lower cost which maximizes efficiency. Voluntary exchanges generally leave both parties better off. Essentially forced altruism, companies compete to produce a better product for our society. There is no alternative system even close to providing that type of liberty, freedom, and economic mobility for all people like that of a free market, where people can become well off perusing their passions and interests while benefitting those around them.
Government economic intervention therefore must be limited to those actions which best encourage individuals to trade their skills and goods. Examples of appropriate government involvement include laws that protect individual rights, property rights, contracts, and which regulate for defaults in the market. Given this framework, the general population (including the poorest individuals) enjoy an abundance of opportunity for worthwhile employment and the ability to easily contribute to others.
Yet it has become increasingly popular to make the mistake that government can also offer what the free market does offer and that the government should be a player and not a referee. There is a belief that the wealthy are somehow undeserving of their gains and must be forced to subsidize government redistribution. However, the wealthy are the engine of a booming economy because they create jobs and invest their earnings that, when successful, produce gains across all spectrums of society. The government is notoriously bad at smart investing, taking money from investors and throwing it at bad investments thereby choking any hope of economic growth. For example, part of the Obama stimulus package or (ARRA) included a $1,831,768,487 package to Baltimore which funded programs in education, housing, job training, transportation and more. The entire program was utterly wasteful and did nothing to break the steady decline of Baltimore’s economy. In short, we have a system which taxes work and subsidizes failure and thus will only lead to more failure.
It is no coincidence that the Obama administration's progressive, redistributive policies have been coupled with the slowest rate of growth since 1949. During the two years of the Obama-Pelosi era, before republicans took control of the house and senate, America was saddled with Obama’s stimulus, Obamacare, and Dodd Frank. In other words, we received a stimulus plan that wasted nearly one trillion dollars, a healthcare system now collapsing under its own weight, and a law which, according to the Wall Street Journal, has “crushed small banks, restricted access to credit, and planted the seeds of financial instability.” Obama is an idealist and a thought leader for principled government involvement that simply does not work.
Hillary Clinton understands that there is unrest in America but her plan is to double down on these types of policies. During her campaign, she’s used buzz-words and taglines, such as, “the rich must pay their fair share,” and insists that her plan is a “bottom up” plan and not a “top down” plan. This sounds good in speeches to her supporters (unlike those released by WikiLeaks to banks) and is received with cheers. However, her plan to double down on these redistributive principles offers a similar path toward stagnant growth, wasteful and unproductive government involvement and harsh business regulations.
Her economic plan is to implement a 4% tax increase on individuals earning upwards of $5 million a year, increase the top bracket to 45%, increase the estate tax, and decrease the charitable deduction rate to 28%, as well as enforce an alternative tax of 30% for those earning over $1 million per year. These are all ways of taking money away from people who make successful investments and funneling it into those programs which her self-appointed government officials deem to be worthy (such as Baltimore). This is the antithesis of a policy for economic growth and opportunity. Hillary Clinton promises to close tax loopholes, however her complicated tax plan is exactly the policy favoring special interest groups who have the power to lobby for loopholes, leaving less powerful corporations in a difficult position and corrupting the markets efficiency by creating pits and valleys in the tax code. We also must ask if she would oppose the type of cronyism that made her and her husband $125 million and indeed why her Foundation gave certain foreign countries access to her as Secretary of State. Any tax plan which doesn’t directly promote voluntary trading within a free market must be looked at with suspicion. In general, the more involved the government in an economy, the more corrupt the government will become.
And then there is Donald Trump. The outspoken businessman has a plan to reduce taxes by a high margin, putting the top bracket at 25% for ordinary income, reducing the capital gains tax significantly at all bracket, substantially lowering the corporate tax, and other modifications along those lines. One of Trump’s stated and most positive reforms is on corporate taxes. This sneaky tax largely translates into either higher prices or lower wages. This is basically a hidden tax on middle-income wage earners and consumers, passed along by the company receiving the tax. Dropping the corporate tax would effectively create wealth for those Americans who need it most. Importantly, the government’s loss of income would not be as significant as its loss in taking on trillions of dollars of additional debt like the current administration. Furthermore, high corporate taxes are basically an invitation for corporations to lobby for loopholes which skew the market and lead to inefficiency. It is taught in economics 101 that tax and regulatory policies which don’t contribute to the chief purposes of government should be eliminated whenever possible because they can only lead to inefficiency, a burden ultimately unloaded on the American people. Money is significantly more productive when invested in the market by people directly accountable for gains or losses as opposed to our government which has others’ money on the line.
In exploring one issue of the 2016 Election, mainly taxes and economic regulation, a Clinton administration bears significant risks to the American people. With the type crony capitalism and “calling on favors” routine that she continues to demonstrate, the inefficiencies of big government as a tool for unfair regulations and taxes will harm those worst off in society. The Nobel laureate Milton Friedman, the greatest proponent of the free market of this century said that “a society that puts equality before freedom will get neither. A society that puts freedom before equality will get a high degree of both.” The American government needs reform and refinement. The American people deserve better.