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Government Based on Coercion Cannot Be
Tamed

by Michael S. Rozeff
by Michael S.
Rozeff

The U.S.
federal government is on a course of self-destruction. People of
many political persuasions know this. People who are against
coercive government know this. People who favor coercive government
know this. People who do not mind if the federal government
self-destructs know this, and people who want to save the federal
government know this.

From a
scientific viewpoint, one of the interesting aspects of a government
that is self-destructing is that the process cannot be stopped, even
when people who want to stop it, try. Government based on coercion
cannot be tamed. It keeps on running until the clock stops ticking
and the bomb goes off.

The Committee for a Responsible Budget,
which is part of the New America Foundation, consists of Washington
insiders. It chairman is William Frenzel. Leon Panetta was a
co-chair up until joining the CIA. The Board of
Directors is strictly Establishment. So are the Directors. Among
them are Vic Fazio, Alice Rivlin, Robert Reischauer, Lawrence
Summers, David Stockman, Paul Volcker, and David M. Walker. These
people support the State, the federal government, the republic,
democracy, and the Constitution. They would vigorously deny that
they don't.

These people do
not want the federal government to destroy itself, but they tell us
in no uncertain terms that the federal government is on precisely
that course. It is precisely because this committee is made up of
numerous Washington establishment figures that their statements are
useful in complementing and confirming the observations of LRC
writers, who might otherwise be viewed as unduly radical, alarmist,
or biased. Here is a sample of statements coming out of this
committee. See here,
here,
here,
here, here,
and here.

"The economy is
in crisis, the deficit is out of control, all of the Bush tax cuts
are about to expire, and the tax code is in many ways broken — this
is no time to think small," remarked Maya MacGuineas, President of
the Committee for a Responsible Federal Budget.

"Borrowing has
ballooned to unimaginable levels. A $1 trillion deficit — more than
twice the previous record — now appears to be a conservative
estimate for fiscal year 2009. The debt is already over $10
trillion. And to paraphrase President-elect Obama, economic
conditions will probably get worse before they get better. Yet as
bad as things seem today, the future looks bleaker. The projected
rapid growth in spending — driven primarily by the aging of the
population and health care cost growth — will put this country's
fiscal and economic health in permanent jeopardy. If not brought
under control or paid for with new revenue, this growth will turn
trillion dollar deficits from an exception to the norm.

"In its recent
Budget Outline, the Administration claims to reduce the deficit by
paying for its new initiatives, winding down the war in Iraq, and
raising taxes on higher earners. In their budget, the Administration
displays policy changes relative to a current policy baseline... The
budget relative to the standard current-law baseline, however,
reduces taxes, increases mandatory spending, and increases the
deficit."

"Including the
costs of his health care plan, spending would grow considerably
under President Obama's budget. Under the current law baseline,
outlays would return to a fairly average level of GDP after the
costs of the current economic and financial crisis have passed.
Under the President's budget, however, outlays as a share of the
economy would reach a permanently higher level, and would only grow
from there as population aging and rising health care costs take
their toll on the budget.

"Mandatory
payments — the combination of mandatory programs and net interest
spending — increase from 62 percent of total government spending in
2008 to 72 percent of total spending in 2019 under the President's
budget.

"While it makes
sense that the President would advocate for the policies on which he
campaigned, we worry about the introduction of too much new
permanent spending before addressing the unsustainable growth of
existing programs.

"The Committee
for a Responsible Federal Budget has warned that the President's
budget is not aggressive enough in reducing the medium or long-term
deficit, and CBO's [Congressional Budget Office] analysis projects a
significantly worse situation than the Administration does, with the
President's Budget plan resulting in larger and continuously rising
budget deficits.

"The budget
proposal would increase the debt held by the public from $5.8
trillion, or 40.8 percent of GDP, in 2008 to $17.3 trillion, or 82.4
percent of GDP, by 2019.

"CBO's recent
analysis of the President's budget paints a dismal fiscal picture,
with deficits not only continuing, but increasing, as far as the eye
can see, and debt growing to levels not seen since World War II.
Although large short-term deficits may be necessary to put the
economy on a path to recovery, debt cannot sustainably continue to
grow as a percent of GDP over the long-term. If deficits are not
eventually reduced to manageable levels, they will threaten
long-term economic growth and impair the normal functions and
flexibility of government."

Being
supporters of the State, this Committee recommends the only remedy
available to the government to prevent fiscal disaster: higher
taxes.

"The Task Force
would be wise to focus on base broadening by making recommendations
to reform tax expenditures, and it should explore alternative means
of raising revenue. Additionally, the Committee recommends that the
Administration remove the restriction that prohibits the
consideration of tax increases for families making under $250,000 a
year."

No doubt, the
projections of the alarmed Establishment are conservative! If any
serious budget analyst were to go through the budget carefully and
pinpoint all of its rosy assumptions that are unlikely ever to
occur, the deficit projections would be even greater. Based on these
optimistic deficit projections, the Obama budget shows debt doubling
between 2008 and 2013. The rise is likely to be even greater. It
then shows debt rising by less than 50 percent between 2013 and
2019, as in the best years of the nineties. Given the sour economy,
falling tax revenues, and higher government spending, this is a pipe
dream.

And so, in the
good old American way, the Washington insiders attempt to alter the
course of the government while preserving it. Their goal is to tame
the government. It's not going to happen. It can't be
done.

Why not? Why
can government not be reformed? The government we have is coercive
by construction. The law of the land is coercive by construction.
They involve majority rule in which one group is able legally to
impose its wishes on other groups by force.

A non-coercive
government can be reformed. People only need to stop using its
services. It then either shapes up and responds to people's needs or
it loses out to alternative means of governance.

A coercive
government invariably imposes losses on some while providing gains
to others. (The same person may gain from one vote and lose from
another.) To survive, the state has to juggle these losses and gains
so as to not to alienate too many people. Power has to ensconce
itself. It cannot rely solely on the use and threat of force. That
is too costly a means to maintain power. Instead, it seeks to make
itself indispensable. It seeks to weave itself into the basic fabric
of daily life. It inserts itself into basic needs that involve food,
health, money, financing, education, and so on. Thus, the survival
of the State goes hand-in-hand with growth in government because the
growth allows the State to entangle many more people in many more
ways so that undoing the resulting society becomes too costly and
scary a possibility to the people caught in the web.

Furthermore,
the growth of government is assured by a second circumstance, which
is that the use of power attracts people who want to use that power
and who compete to use that power.

Any attempt to
cut back this growth or tame it poses a threat to the State's
survival and to the power-using inclinations of those in power. Such
attempts at reform open up politics to new negotiations, new votes,
new priorities, and new coalitions. They threaten to reduce the
scope of power exercised by rulers. They alert the citizenry to
entirely new possibilities. They unhinge old and established
alliances and interests. In all reform movements lie great risks to
the established system, interests, and people in power. If they
cannot control these reforms, they will want to squelch them. If
they control them, you can be sure that no real reforms will be
forthcoming.

The governing
establishment, left and right, is highly conservative in one major
respect, which is the maintenance and extension of the existing
power structure and hold of coercive government over the private
lives and liberties of Americans. Not wanting to take the risks of
reforming government and having much to gain by extending
government, the government grows.

The interesting phenomenon emerges, which is
that the government grows too much and risks its own destruction,
even while those who are close to government, in and out, see that
the government's very survival is threatened. This is because
growing government is advantageous to the rulers, both personally
and in terms of managing to hold power over society, and because
cutting government back opens up many political risks. It is far
easier for those out of power, like many on the Committee for a
Responsible Federal Budget, to identify the survival threat and warn
against it, than it is for those in power to do anything about it.
Those in power want to retain power and get re-elected. Their time
horizons are rather short. It hardly pays them to do something for
the long-term good, even of the government, especially when that
something involves large political risks. To upset one or two
constituencies by cutting back their benefits may mean losing
office.

There is no
question but that the unmitigated profligacy of Bush II and now
Obama is hastening the day when the federal government implodes and
takes the country on a far from merry ride downhill. Labeling them
(fascist and socialist) hardly even matters. Obama is now fully
responsible for the slide. His across-the-board spending increases
in all departments of government are not stimulus. The intent is to
exercise power, especially by Democrats. The intent is to give us
bigger government, as his anti-Reagan rhetoric makes clear. (Reagan
gave us bigger government too.) Bush gave us Iraq and Afghanistan.
Obama gives us Afghanistan and Iraq. Obama accuses Bush of
irresponsibility. He then turns around and gives us a
new era of irresponsibility.

The conclusion,
which I pose as a theorem of political dynamics, is that government
based on coercion cannot be tamed. Coercive governments can and do
commit suicide.

April 7, 2009

Michael S. Rozeff [send him mail] is a retired
Professor of Finance living in East Amherst, New
York.

Copyright © 2009 by
LewRockwell.com. Permission to reprint in whole or in part is gladly
granted, provided full credit is given.

Michael S.
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