In 2019, labeling Congress as “broken” is not a particularly controversial statement. The deadlock that many regret is only becoming more common, leaving the ordinary citizenry little hope in any productive changes. I, like most Americans, had a very critical and cynical view of the legislative body, but upon seeing the problems firsthand, I can tell you that they are far worse than most imagine.
By Jack Parkos | United States
The libertarian ideology is made up of various factions and ideologies, a major one being Minarchy. Minarchists advocate for a small state whose sole purpose is to protect natural rights, including our right to life, liberty, and property. This state would only provide basic functions of government: courts, police, military to protect from crimes such as theft, breach of contract, or aggression.
A common issue brought up with a Minarchist state is of how it should be funded. As libertarians, we are opposed to income tax, capital gains tax, property tax etc. But we also believe in a small state to protect rights. So there appears to be a conflict in funding the state and keeping our principles. However, there are many solutions.
In the early days of the United States, the government was funded through lottery revenue. The first of these lotteries was held during the Colonial area in Boston Massachusetts in 1745. The revenue from the lotteries was used to build bridges, fix roads, and fund other projects. This would be an efficient way to fund a Night-Watchman state.
Just like in Colonial America, a government lottery would be completely voluntary to participate in. People would purchase lottery tickets from the government and put money into a pool. Then, the winner would be drawn and would keep a certain amount of the prize money, and the rest would go towards funding the state. The amount going to the state may vary, but this would be an efficient way to fund. The lotteries would run similarly to raffles at fundraisers. Skeptics of a lottery system may counter that the government would not be able to function with these means of funding. But it must be remembered that this is a nightwatchman state with a small budget, requiring less revenue.
Fundraising, in general, could be a good way to fund the state. Many parents participate in fundraisers for things like kid’s sports teams, and it would make sense they would do these to fund police or courts. If a service is good enough, people will be willing to pay for it. Perhaps the people or the government could do silent auctions on items and raise money like they do now. These could be run by the people and have the government funded via a donation or the government itself could run an auction.
Another way the government could function is fining people who commit crimes. Of course, a minarchist would never advocate a fine for a victimless crime, but rather for actual crimes; theft, breach of contract, assault etc. Let’s say, for example, someone damages another man’s property and is found guilty in court. In addition to paying for the damages, he may also pay a small fee to cover court costs. Some may scoff at this idea thinking of it as enforced taxation. But it must be remembered that this is the guilty party paying. This person chose to commit a crime that harmed another party knowing the consequences, this being one of them.
This is a system already used. Instead of abolishing fines, we have them only be put in place for actual offenses. So a person would not be fined or even punished for using drugs, but if they broke a contract or harmed someone and is found guilty by a jury, the guilty party would have to cover court costs. This system would be a great way of keeping courts running, ensuring justice, and protecting rights.
The minimal state will require funding, but this funding does not have to be taken from your income. There are plenty of ways to fund a basic government that do not require such a system. In the past civilizations have had systems similar to these. It worked well to fund a small, more localized government in early America. If we can shrink the government and reduce budgets, there is no reason it would not work today.
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Last year, CareerBuilder.com released a study with shocking results. Of the several thousand American workers polled, an alarming 78% of them live paycheck to paycheck. In the same study, more than half of workers believed they would always be in debt. More than a quarter (26%) did not save a penny every month, and another 31% saved an average of $100 or less.
In a Bankrate.com study, though, Americans stated that the ideal age of retirement is a mere 61. Yet, by their own financial practices, life in retirement at this age would be a near impossibility. Why is it that Americans are broke, and unable to meet their own guidelines of success?
Worse than Broke
In many cases, this is simply due to the fact that Americans are worse than broke. In fact, 71% of them carry some form of debt. This largely plays into the fact that so many are unable to begin saving their money. But what are some of the causes of the country’s largely-unknown financial disaster?
How much Down, How much per Month?
Through the 1920s, companies in the U.S. began to offer systems of credit to use for their individual products. By 1950, Diner’s Club issued the very first universal credit card. Not long after, use of the card became widespread, and thus begun the country’s downward financial spiral.
While it is true that income levels are up dramatically from those time periods, credit has considerably dampened the gains America has made. A prime example of this is the car buying industry. Allstate.com has a program that can calculate the difference in paying with cash compared to financing. Using average values for the price of a new car, length and rate of financing, and down payment, paying cash saves $5,830.
In other words, a $36,000 new car, when financed at the average rate, really costs $41,830, an addition of one-tenth of the average American income. That’s more than a full month’s salary for the average American worker. And, when paying with cash, there is always a chance to bring the price down. Some dealers may offer a choice between zero percent APR for a time, or a rebate. In this case, paying cash for the rebate allows for a deeper discount off of an already lower price.
A Credit Card Catastrophe
As of 2018, the average American household is broke. In fact, they are actually far below it, owing a whopping $16,883 in credit card debt. Though most homes take in far more than this, the debt is perpetual. Why? Because with each passing year, that debt only continues to accumulate, with those same American households paying an additional thousand dollars in interest alone.
Ultimately, credit purchases are ways for people to buy what they otherwise could not afford. By putting off payments, these same people end up paying a lot more in interest payments, and a lot more up front, too. This is because cash is psychologically much harder to hand over. Several studies, including this 2008 paper, explain that the average person is willing to spend considerably more money on a given item when swiping plastic. After all, they can just write it off and actually pay for it later. Thus, the debt cycle continues.
Budgets: Broken Leads to Broke
As mentioned before, a majority of Americans either save nothing at all, or save very little. In many cases, this is because it is simply not a written priority. In fact, only 32% of Americans have a budget at all. Of those, a portion do not factor savings into their budgets.
A lack of a budget breeds a ‘saving last’ mentality. But when doing this, there is no guarantee that there will be any money to save at the end of the month. Instead, adopting a ‘saving first’ mentality allows people to guarantee a portion of their income will go towards savings. With this new state of mind and a properly funded budget, families can ensure that every dollar that flows in, has a clear path to flow out, whether they spend or save it.
Will the Next Generation Improve?
This lack of financial knowledge, in varying forms, is not surprising, considering most high school students do not have a personal finance requirement at all. Throughout the country, only 16.4% of students are required to take a personal finance class to graduate. And outside of the five states where it is a statewide requirement? The portion drops to a pitiful 8.6%. America’s most states, Texas, California, and Florida all have rates of an abysmal 0%.
Meanwhile, student loans are forever increasing. Since 2010, they have risen 79%. The credit industry is tightening its hold, and financial literacy is only decreasing. But this is not an unsolvable problem. America must embrace its roots and recognize that, as the saying goes, cash is king. Incomes are increasing, and it is time that the people get to see the benefits of this, rather than paying them off, month by month by month.
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Indri Schaelicke | United States
At the time of writing this, the US debt sits at $21.15 Trillion, and recent trends would suggest that our elected representatives do not care to step back, consider the potential disastrous effects, and reverse our course. How does such a large debt even come about? Let’s examine a few fundamental reasons.
Politicians give people what they want in order to win votes, but have no regard for what the budget can handle.
Over the course of the past year, many people have realized that nearly every facet of our lives is becoming increasingly politicized. The same is true of our budget creating process. Both parties make a show of what they wish to focus their spending on. Since the beginnings of the earliest political systems, the savviest politicians recognized that while campaigning for office one will be most successful if they tell their constituents what they want to hear. They can then promise a whole host of “free” programs, portraying government as the superhero that will save you from whatever affliction you face. Once in office, the politician will move to fulfill these promises, thereby expanding the scope of government and widening their base of supporters.
The public would be in uproar if the government taxed at the rate required to cover all spending.
In order to cover the cost of the programs that they wish to create, politicians would need to charge taxes at an incredibly high rate. There’s just one problem- no one wants to pay high taxes in order to get some “free” hand out from the government. They simply want their free healthcare. People want to have the cake, and eat it too. Politicians cater to this desire in order to secure votes, and the debt continues to grow.
As a libertarian, I support a dramatic reduction in government spending and seek to end our federal government debt. There are a few reasons I support this:
The more the state spends, the more control over our lives they have.
Government spending increases the size of the bureaucracy, creating more and more agencies that have a say in the way I live my life. Don’t you think I can manage my life better than an unelected official sitting at a desk in Washington DC, who knows nothing about me?
I don’t believe in coercion and wealth redistribution policies.
No one should have to pay for someone else’s birth control, for example. I say we lower tax rates for everyone, and minimize government influence in our daily life (cut spending), allowing people to make decisions for themselves. No one knows how you should live your life better than you, so why pretend a government agent does?
However, knowing the tendency of both parties to oppose any spending cuts, a solution will have to be much more pragmatic. Fiscal conservatives must push for cuts to spending whenever they present themselves, such as when a bill comes up in committee, is being debated on the floor of their chamber or discussed in the public eye.
Ideally, fiscal conservatives who seek to end several agencies will be elected, as well as leaders in both houses of Congress who are committed to entitlement spending reform. Doing these two things will help us eliminate our debt.
I was driven to become a libertarian by being made aware of the government’s waste. I’m sure that a coherent message preaching the inefficiencies of the state would attract many more to the liberty movement.
By Nick Hamilton | United States
New York could become the tenth state to legalize marijuana, according to a local CBS affiliate in New York.
Andrew Cuomo, New York’s governor, has historically opposed legalization. However, with Massachusetts legalizing marijuana and New Jersey considering legalization, he’s reconsidering. State government is already investigating possible consequences of legalization in a study Cuomo proposed. The study is likely to conclude this fall.
Cuomo is reconsidering the notion because New York is losing tax revenue to neighboring states. As seen in Colorado, marijuana brings in revenue for both government and the private sector. Therefore, it would make sense for the third most populated state to consider legalization. This comes at a time when the state faces a massive budget gap. Legalization may help to close this gap via an increase in tax revenue.
Despite Cuomo’s newfound approval, legalization of marijuana does still face backlash in the state. Most notably, New York City Mayor Bill de Blasio opposes the measure. However, his wife disagrees. In a statement on Friday, Chirlane McRay stated that she indeed supports legalization, saying that people shouldn’t be punished for using the controlled substance. NYPD Chief of Detectives Bob Boyce acknowledged that many people in New York hold that same position.
As many people know, there are many benefits to the legalization of marijuana. (which are listed here) If New York legalizes marijuana, this will be a huge victory for legalization advocates not only in New York, but across the country as well.