Narrow Your Gun Debates

This is an update from my post two years ago, since gun debates are in the news again and have yet to be narrowed.

My position on most issues leans towards the ability of individuals to operate without restrictions and thus on firearms, I’m open to robust gun ownership, but I wrote this post to explore the issue more thoroughly. I’m by no means a gun purist, to the dismay of many more intense libertarians I know. If there were more stringent regulations on firearms purchases, changing those laws would not be among my policy priorities.

Nonetheless, many people do feel strongly about gun ownership in the United States, and I wonder if this is a position where efficient advocacy could help us understand whether those feelings are warranted. Unfortunately, gun ownership and gun control are complex issues with many different parts. Continue reading Narrow Your Gun Debates

Free Market Arguments from National Security

Libertarians are not fans of wars or government spending, often for overlapping reasons. Consequently, libertarians often remain uninterested in foreign policy, writing off the entire area of study as something not worth engaging in. Given the current administration has found a way to be both not interested in global affairs (“America First“), while also highly anti-market and pro-government spending (especially defense spending), I believe there might be an alternative that both retains a small government approach to the economy, as well as an important role for American leadership in the world.

The overarching theme here is that China is a rising power, whose outlook is distinct from that of the U.S. and the liberal world order generally. We might have expected China to continue its trajectory towards a freer economy and perhaps even a freer political ideology even 10 years ago, but no longer. Economic reforms touted by Xi Jinping have not materialized, and in fact the Chinese Communist Party and the state have strengthened their hold on the economy and the role of state owned enterprises within it. The Chinese state has maintained a highly nationalistic ideology; American foreign policy has created plenty of messes, but has also done some good in promoting free trade and at least stated goals democracy and respect for human rights. China is looking to offer an alternative to the current American-dominated world, and it is likely one that is worse for the world. American policymakers need to do better. Here are ways they could do so.

Institute Fiscal Discipline

The first point is that any potential policy that looks to achieve American goals vs Chinese goals will cost money. The U.S. government had a deficit of $665 billion last year. This year it will probably exceed $1 trillion. Entitlement spending will cost money, military R&D will cost money, cybersecurity will cost money, projecting power near China will cost money. Yet, we have passed a massive tax cut with no way to pay for it. From a libertarian perspective, unfunded tax cuts could be argued either way; they reduce the tax burden on citizens, but they crowd out investment, don’t actually change the amount of government interference in the economy, and they could lead to higher taxes later on. But from a national security perspective, this fiscal policy is terrifyingly irresponsible.

I find it uninteresting who owns the national debt. Much has been made of the fact that the Chinese government owns large portions of our debt. So what? They will receive future interest payments, but the federal government received cash from outside the U.S. economy it could spend immediately.  That kept interest rates low in the U.S. while Chinese savings and taxes were taken by the U.S. government and used to pay for Medicare, Social Security, and the War in Iraq. This is just a trade and doesn’t even seem like a great investment from China’s perspective. China could dump its American debt holdings onto the market, pushing up interest rates in the U.S., but by flooding the market, they’d also be selling the debt at a discount, writing off the losses. Moreover, China only owns a bit over a trillion dollars of debt, compared to the national debt’s total size of almost $21 trillion.

China could have put that capital directly into infrastructure investment or education or buying off communist party officials to implement more complete market reforms or even malaria nets in sub-Saharan Africa! But instead they bought low yield American government bonds. Seems like a waste of capital in my opinion. Had China not purchased that debt, the federal government still would have issued it, but interest rates would have been higher. On the other hand, the fact that the treasury owes some of this debt to other entities in the government isn’t super comforting. Those government agencies need the cash too; if they aren’t paid, they won’t be functioning, and their employees won’t be working.

No matter who owns our debt, increases in interest payments, whether through interest rate rises or increases in the underlying total debt will make accomplishing any policy goals, including foreign policy, that much more difficult.

Stop Military Counter-Terrorist Interventions

Predictable point of any libertarian foreign policy critique? Yes, but it’s unfortunately unavoidable. The cost of the Iraq and Afghanistan Wars are hard to calculate exactly. Direct appropriations costs were over $1 trillion, but the Afghanistan War remains ongoing (are you sick of winning?). Long term costs including veterans benefits will probably be more than double the direct costs.

The U.S. has a long history of Middle East interventions, and they just don’t have much to show. There are still almost no democracies, Libya, Syria, and Yemen are still divided states living under various governments, Iraq has been suffering under a war with the Islamic State which has cost a hundred thousand lives and displaced millions. The Iranian nuclear deal prevented a theocratic autocracy from obtaining a nuclear weapon, which was said to be only a couple years away.  This would be one of the only bright spots in U.S. policy in the Middle East, yet the President has threatened to tear up the deal.

If China is to be the focus of an American foreign policy, we can no longer afford to sink resources into fighting small terrorist groups that kill 10 times fewer Americans per year than police officers. And despite Trump’s so-called “America First” approach, we are most certainly still wasting resources in the Middle East. The President has carried out operations in Syria, Iraq, Yemen, Afghanistan, Pakistan, Somalia, and Libya. There are also U.S. forces apparently in Niger, Chad, and Cameroon. Perhaps it’s too late, and China’s expanding influence means the U.S. has to maintain a military presence in developing countries around the world to offer an alternative, but it would have been nice to save those expenditures in the intervening 30 years between the end of the Soviet Cold War and the ratcheting up of whatever this new one is. As it is now, these interventions have left American foreign policy broke.

Reform the Military Budget

As (grudgingly) stated earlier, we will need to fund the Department of Defense if our goal is to geopolitically confront China. Nonetheless, the DoD budget needs serious reform, and perhaps should be torn down and rebuilt from the ground up. The Government Accountability Office (the best government office) has never been able to audit the DoD in over 20 years (see page 3). In 2010, Congress told the DoD it had seven years to get its act together and finances in order. It missed the deadline. This year, the Department will allegedly finally undergo an audit, the report to be released November 15. This is, of course, a step in the right direction, but we need so much more.

The procurement system in the DoD is a complete mess.  The F-35 fighter is way behind schedule and already $400 billion in. Last year, Lockheed Martin produced 66 planes. This exposé from 2014 is deeply disturbing. When the military isn’t pouring money into contractors who are making out like bandits, or paying for tanks it no longer wants nor needs, or blowing up perfectly usable munitions because it can’t keep track of what is needed and where it should go, it dumps its extra assets, including leaving thousands of humvees in Iraq that were eventually captured by the Islamic State.

This military budget needs a reckoning and I’m unsure Trump is up to the task.

Promote Free Trade

China is jumping off the free market ride, and the U.S. needs to pick up the slack. The best way to expand the benefits of markets is to expand markets themselves through trade. More to the point of this post, countries that have a stake in global trade and free movement of goods are much more likely to have economic goals and values that align with the U.S. and its allies. During the Cold War, there was a strong alternative to capitalism and trade, and while most countries didn’t have a “choice”, many countries did exist outside of the free trade liberal market order pushed by the West. After the fall of the Soviet Union, that alternative largely dried up. Today, if you want to have a successful, rich country, freer trade and openness to foreign investment are vital steps to take.

China is much more open to trade and markets than the Soviet Union ever was. Nevertheless, any policies or goals where their motivations are less market oriented and more nationalistic would be exactly where they would differ with that of western values/free trade/liberal markets. This is evident in their extensive protection of Chinese industries and even in non-tariff barriers such as the Great Firewall. To the extent that China seeks to offer an alternative to the United States’ world order, they support protectionism and oppose free trade.

This means increasing trade and integration into the global economy of an allied (or possibly allied) country is the national security interest of the United States. A hypothetical Cuba that was highly integrated into the U.S. economy would be much less likely to be flirting (metaphorically I think) with Chinese dignitaries. The Trans-Pacific Partnership played exactly this geopolitical role, integrating Pacific countries’ economies with the U.S. and its allies, while leaving China on the outside. Yet Trump declared that we should leave the TPP as soon as he entered office, effectively siding against American national security and promoting China’s geopolitical goals.

Tying U.S. policy to free trade and global markets is powerful. It’s very difficult for a country to become rich and successful without at least selling their products on the global market. Access to the global market is thus in every country’s national interest. If U.S. policy is to have open trade, then the American economy will be highly integrated into the global market, meaning it is in the national interest of other countries to gain access to the American market. U.S. trade policy has been to offer access to the American market as part of bilateral and multi-lateral free trade agreements, thus offering foreign countries’ national interest goals if they conform with American goals of free trade and free markets. Integration with the U.S. economically necessitates geopolitical alignment with the U.S. That’s why it’s not just obviously economically stupid to oppose free trade (like crazy stupid), it’s against American national interests.

Allow More Immigration

All of these points have been critiques of the current administration. Some of these might also be critiques of conservative positions generally, but that will depend on to what extent current Republican positions are defined by historical conservative positions or by Donald Trump. This final point may still be the most difficult for conservatives to hear.

As a matter of national security, the U.S. needs more immigrants.

Immigrants are more entrepreneurial. Immigrants are less likely to commit crimes. Economists widely agree that high skilled immigration would benefit the average American, and tend to believe that even low skilled immigration would benefit the average American (although they are more split on the second). If we are concerned about the political effect of immigrants, we should take Rush Limbaugh’s (fairly progressive) approach and allow immigrants to work and live in the U.S., but not vote for a long period of time. Perhaps that’s more politically difficult than I imagine, but it seems like a good compromise from a national security perspective (and voting is sort of worthless anyway). That’s also not the only solution; if today’s political climate means only highly skilled labor can be let in, then at least that should be done. This administration has instead made the H-1B visa process more arduous. Trump’s immigration allies in the Senate have also introduced a bill to reduce legal immigration, including high skilled immigrants.

Immigration is an important engine for economic growth, an engine that nationalistic Chinese policies will have a hard time replicating. America is better able to absorb and benefit from immigration than any nation on Earth; it should apply this strength.

The final point relates back to deficits; entitlement spending is projected to continue to grow and consume the federal budget. The ratio of workers to retirees is dropping. Immigration can help change that tide, keeping our working age population growing, when fewer Americans are entering the workforce, often because families are just having fewer children. It won’t be enough, entitlement reform is important as well, but immigration is tool that must be utilized.

Conclusion

I don’t know how much of a danger China really poses to the U.S. Xi Jinping’s recent power grab is a bad omen though, and a large highly nationalistic protectionist country led by a dictator is certainly worth keeping an eye on. But if Sino-American relations get worse in the next decade, U.S. policy is in a poor position to adapt. Trump has claimed to want to confront China, yet his policies are actively harming our national security.

 


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Against Hillary: Fiscal Policy and Taxation

This is the fourth post in my series opposing Hillary Clinton’s candidacy. See the introduction in Part 1 here. Read my opposition to Trump here. Read why you should mathematically vote for a third party here.

Taxation

I won’t spend a huge amount of time on this section because there’s another fundamental ideological argument here, but I want to emphasize a few key points. One is that government taxation and spending is inherently distortionary in an economic sense. Therefore, we should be biased against government policies that transfer money unless we can definitively show the benefits are significantly larger than the costs. Relatedly, the tax code should be as simple and as non-distortionary as possible. Gary Johnson has a pretty good idea here on replacing the income tax with a similarly progressive consumption tax. Similar tax holes would likely be carved out over time, but throwing out the current system in favor of one that does not discourage income earning, but only spending, would have some clear benefits. This idea is popular among libertarians, progressives, and even Bill Gates. It is not a perfect plan, especially when taking into account transition costs, but the current tax code does not have much going for it: it’s complex and creates bad incentives everywhere. Needless to say, Donald Trump’s fiscal policy may not raise taxes, but excessive government borrowing can have big costs as well, and at some point in the future distortionary taxes will need to pay for all of Trump’s out of control spending ideas.

Spending

The second point is that if we assume luck is an inherent part of wealth, then using government as a form of social insurance is pretty reasonable, even from a libertarian standpoint. But most government spending is not focused on giving money to the poor. A huge chunk is spent on the elderly in the form of social security and medicare, even though many are solidly middle class. Taxes for the programs are also fairly regressive. Other major spending categories are overseas military operations, defense spending generally, veterans spending (which we will see more of if Hillary is elected), and interest on the national debt. Together these make up a lot more than 60% of the federal budget. And that’s not even going into the costs of the war on drugs, corporate subsidies, and so on, which are a bit harder to calculate, but are nonetheless real costs which are not remotely focused on helping the poor. The problem is that Hillary isn’t really talking about reforming these areas. If anything, she’s talked about expanding them and introducing new spending areas. Again, this isn’t even mentioning the unknown costs of her future foreign policy blunders.

Free college tuition is really the most egregious. We already live in a world where college graduates are forced to take jobs that they are overqualified for. The reason is partially because government already offers huge subsidies for college tuition; as a result, colleges have little price competition. They just increase the prices, and the state just keeps paying it. Increasing the amount of subsidies in order to fix a high price doesn’t work for tulips (seriously, read it), and it doesn’t work for college. Spending lots of money to educate someone on a subject that is not in demand, whether it’s a B.A. in psychology or skills in coding fortran, is very expensive to society. That cost should be born out by the person learning the skill with no market, not by society. Incentives would then push people to either learn skills that are in demand (so they can pay back the cost of education), or to forego college and begin earning immediately without huge upfront costs. Both of these would be better for society at large. Yes, we should help those with little wealth with government support, but those receiving help should ultimately decide what to do with additional funds that will best help them. The government should not interfere with the relative opportunity cost faced by prospective applicants to college. Reducing, not increasing college subsidies is the only way to control the rising cost of college and fix the overqualification and saturation of college degrees in the job marketplace.

Finally, paying for this with higher taxes on the wealthy is a bit wishful. Firstly, the arithmetic doesn’t quite add up; the New York Times estimates higher taxes would raise only $100 billion to $200 billion depending on how broad and steep the tax increases are. This isn’t enough to cover current annual payments on the national debt. It would likely cover public college tuition today, before additional cost growth and the large influx of students that free tuition would bring. There wouldn’t be much room for a new war in Syria or an expansion of social security. Secondly, federal tax revenues have basically never exceeded 20% of GDP. It’s not that higher taxes wouldn’t raise revenue; they just wouldn’t beyond a certain level. A Clinton presidency would not be as fiscally irresponsible as a Trump presidency, but it is a bit worrisome considering the returns of this spending seem to be to get middle class votes more than to help the poor.


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Picture Credit: Gage Skidmore, licensed under CC BY-SA-2.0

Narrow Your Gun Debates

On firearms, I’m open to robust gun ownership, but I’m not sold on anything. Like most of my positions, my default is to favor the ability of individuals to operate without restrictions, but I’m by no means a gun purist, to the dismay of many more intense libertarians I know. If there were more stringent regulations on firearms purchases, it wouldn’t be something I cared strongly about.

Nonetheless, many people do feel strongly about gun ownership in the United States, and I wonder if this is a position where efficient advocacy could help us understand whether those feelings are warranted. Unfortunately, gun ownership and gun control are complex issues with many different parts. Continue reading Narrow Your Gun Debates