CITIZENS   FOR  LIMITED  TAXATION
and the
Citizens Economic Research Foundation

Barbara's Column
February #1

Experts, bureaucrats are unlikely guides
on path to economic recovery
by Barbara Anderson


The Salem News
Thursday, February 7, 2008

-- Second of two parts --

After assaulting the proposed "economic stimulus plan" last week in this column, I went looking for an economic stimulus plan of my own.

Of course, one can criticize a plan without having an alternative plan to present.

There are so many more plans, on so many subjects, than there is time to acquire enough expertise to address all of them. Critics play a valuable role just by opposing bad ideas, encouraging those who present them to return to the drawing board. In a democracy, citizens have an obligation to at least know what they don't want, and hope they will recognize the better idea when they finally see it.

All taxpayers have a right to support tax limitation, knowing what they can afford and should reasonably be expected to pay for the services they consider essential. Before opposing a tax increase, they don't have to tell government where it should cut; that's the job of the managers we elect or appoint.

It does behoove us not to be unreasonable when making demands for better government. We should get what we pay for, yet not be making our own list of additional, unaffordable entitlements. And it is our job to pay attention during elections and vote as wisely as we can.

Citizens shouldn't be too humble, either. Though we aren't required to have our own plans, many of us are really as smart as some of the "experts," with perhaps a tad more common sense. Economics is one area where we should remember this because the most famous economists disagree on both the basic theories and the details for action. You can take the time to study them, then choose, or you can trust your own instincts.

I learned the basics from my father when he put my first-year college money in a checkbook and told me when it was gone, there wouldn't be any more until the next year. Fortunately, I dated a lot, so guys fed me when I was hungry that spring after I bought a new bathing suit for the school picnic.

A history teacher tried to explain the gold standard, but I had a mental block at the time. I do, however, "get" that a government can't just print unlimited dollar bills as a solution to not having enough money to spend and am not surprised that gold is now heading toward $1,000 an ounce.

When I was working on Proposition 2, I was assisted by one very sensible economist friend. Heinz Muehlmann is, literally, an Austrian economist, from what is called the Austrian school of economics, which generally recommends small government, protection of private property and support for individualism in general. This fit both my own Aquarian tendencies and what I learned from my dad.

During the '80s, my live-in friend John shared books by Austrian economists Friedrich Hayek and Ludwig von Mises, and the American, Murray Rothbard; I also discovered Milton Friedman, Thomas Sowell and Arthur Laffer. For balance, I read some Karl Marx and Keynesian stuff, enough to know that communism and too much deficit spending didn't make economic sense to me.

I have to admit, though, that the point made by Keynesian John Kenneth Galbraith that the free market is distorted by big business, big labor and an activist government is making more sense by the minute. I still have a clear idea of what a real free market should look like, though, and suspect that eventually its reality kicks those who interfere with it in the behind.

So one way or another, I got an informal education in economics, enough to know when I'm being sold a bill of unaffordable goods by politicians who are trying to buy votes with taxes and debt.

But here is the point of this column: You don't have to read any of those economists, and you shouldn't be overly impressed either with those who have or the experts themselves. Humility is not a traditional American virtue. Our founding fathers were counting on the common sense of "the ordinary man" like my father.

In our personal lives, regardless of how we act, we know that a high level of credit-card debt is not advisable, and that we shouldn't spend more than we have or borrow more than we can repay. We know that taking from Peter to pay Paul, without Peter's consent, isn't right. We know that bailing our kids out of their mistakes ensures that they won't grow up to become responsible adults. And by the time we are my age, we have figured out that the government doesn't know enough to run a national economy it can barely run itself.

So here is my own economic stimulus plan: Forget about it. By the time the government combines its lack of common sense with the political motives of politicians and the greed of the special interest groups they serve, it will only get in the way of real economic recovery if such a thing, after years of economic foolishness, is still possible. I hope, however, for my grandchildren's sake, that it is.


Barbara Anderson is executive director of Citizens for Limited Taxation. Her column appears weekly in the Salem News and Eagle Tribune, and often in the Newburyport Times, Gloucester Times, and Lowell Sun; bi-weekly in the Tinytown Gazette; and occasionally in the Providence (RI) Journal and other newspapers.