no third solution

Blogging about liberty, anarchy, economics and politics

Quick Hits

February 7th, 2008

Some people find my blog looking for “arguments against the flat tax.” My argument against the flat tax starts with the same basic premise that I use to argue against all taxes. Taxation is simply theft in disguise.

The extortion embodied in the nature of taxation is not lessened if the burden is shifted entirely to consumption goods, like a flat tax would have. If anything, the flat tax exposes taxation as a “permission to live” payment, since you literally can’t buy anything without paying an additional sum to the State.

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At Democracy Sucks, Stephan tells us why governments can’t be accepted as lawmakers.

It looks as though some people argue for the existence of a government to adjudicate between the people in their disputes. In reality, this is only part of what the government actually does. Not only does the government become the arbitrator and ultimate judge in matters between private individuals, it becomes the ultimate judge in disputes between itself and private individuals.

That’s one of the things I mentioned yesterday. Ayn Rand wrote an allegory to a famous Chess player many years ago, where she compared socialism to a Chess match, where your opponent’s pawns could become Queens or something like that. A more low-brow comparison would be in the Adam Sandler movie, Big Daddy, where his adopted son plays a game of cards called “I win.” No matter what he’s dealt, he wins, because that’s the name of the game. I don’t think this applies only to socialism, but to all forms of government: no matter how well-intentioned, an impartial arbitration is impossible if your opponent is the one who makes and interprets the rules.

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Just like the proverbial broken clock, every once in a while those clowns in the legislature get one right, but that shouldn’t be taken as an indication of benevolence, intelligence, or anything for that matter. For posterity’s sake, they have to at least present a semblance of justice. I think it is your duty to obey laws which are just, not because they decreed by government, but because they are just. One is likewise obligated to permit the disobedience of unjust laws, not merely because they are the product of illegitimate government, but because they are unjust.

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If it weren’t for inflationary policy, the long-term interest rates would be much lower than they are. Based on certain assumptions about the natural rate of interest, and the long-run annualized growth trends, we might see long-term debt obligations like mortgages at something like 3.5% or probably even lower. This is because we could expect money held in storage to appreciate an average of about 2% annually in the long-run due to mild deflationary pressures and a legitimate currency. So you can gain 2% purchasing power simply by not spending your money today, and waiting for the future. That’s the opportunity cost below which nobody would lend. Of course in addition to the pure rate, there would be premiums for risk and default, but arbitrage in a free market would keep them modest.

If you have a 30-year mortgage for $200k, you could be saving something like $500/month, or you could get a 15-year note for roughly the same monthly payment, saving yourself oodles of interest payments.

I’m going to write more on this particular topic in the future.

no third solution

Blogging about liberty, anarchy, economics and politics