May 15, 2009

A Novel Experiment in Smith versus Keynes

Here's the situation - the liberals just don't get it, and conservatives have never had the true conservative leadership that both embraced all conservative principles AND was able to carry them out without compromise. Ronald Reagan came closest, but even he had to compromise with liberal Democrats.

No idea about the leanings of the source of the graphic (linked) but I liked the picture and wanted to properly credit them for it.

The struggle between ideas will never end - even with proof of Keynesian failures liberals will deny reality. So why not avoid the problem altogether? There's a way to do it that has some clear benefits.

Now here's my idea. Why not, without the agony of a civil war, divide the country up into two camps. Not geographically, not by draft picks of "I want this state. Now it's your turn." Simply by having everyone declare which system they believe in - free market capitalism with liberty and justice for all, or whatever it is that the Democrats are peddling (socialism, liberalism, progressivism).

Next everyone would register for system A or system B. Businesses would be required to do the same. Everyone would be required to have photo ID for proof of registration. Now no one would have to move or change anything about their behavior except voluntarily.

Here's the beautiful part - everyone would be taxed and receive benefits under the system they signed on for. If you were conservative - you'd pay lower taxes, likely have a balanced budget but not get subsidized rides on your city's subway system or get 'free' health care. In fact when you paid to ride that subway, you would in fact be importing a service from country B.
The two governments would co-exist and need to work out common items like road maintenance and national defense costs. That would take some work.

People would be allowed to migrate, however the transfer of obligations etc. would need to be established so people couldn't hop back and forth, abusing the two systems. There would also need to be a limit to the frequency - perhaps each sub-country establishing it's own set of immigration laws would suffice.

Solving criminal and civil litigation issues, with two similar but distinct issues would also require some work to figure out.

Clearly running two governments would create additional expense. Some of that could be mitigated by sharing departments where no fundamental policy disagreements exist.
Further, one of the two governments, I'm not saying which one, would run much leaner and more efficiently and would still come out ahead in terms of both revenue and expense. It would be in their best interest to go with the idea and reap the benefits. The other side, let's call it side B, or the liberal side, I'm not saying which one mind you, would only think they would have more revenue and would only believe it was in their best interest to agree to this idea.

An additional layer of difficulty would be in trying to align state taxes with federal taxes - could states opt into a single form of government or would they need to be subject to both.

But why do this? well, with a failing American economy and two diametrically opposed views on how to solve the issue, the experiment would help in a couple of ways.

1) Discord between opposing views would be eased as everyone would get the form of government, the benefits and the taxation of the system they preferred.
2) The experiment would reveal which set of ideas excel over the other - not in a year or two, but over a couple of decades.
3) The ability to deal with issues like massive government debt and unfunded liabilities would have two possible solutions (one of which I'm sure would be obfuscation and avoidance).
4) If one of the two ideas out-performed the other significantly, it would allow for a continued robust America (in this case America A) both domestically and internationally.

I'm sure it would never happen. But it would be an interesting experiment nonetheless. It's an experiment that everyone would go into believe they knew what the outcome would be before it even started. The reality is one side would not only be surprised, but shocked.

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