Monday, October 2, 2017

A rare contribution to National Review suggests that the Congress is an idea whose time has passed

From the story by Jay Cost here:

To put it bluntly, Congress is not well suited for national economic planning, which is basically what pro-growth tax policies boil down to. As a matter of fact, Congress outsources a lot of economic planning — like environmental regulation — to the bureaucracy, because it knows it is not capable of handling such matters for itself. It keeps tax policy within the legislature primarily because that doubles as a way to distribute political benefits to key constituencies.

The problem is an institutional one. It is really not accurate to say that Congress is a “national legislature,” for there is no member in either chamber who is elected by the nation at large. Instead, it is the meeting place of representatives of discrete geographical constituencies. This inclines the legislature to parochial concerns rather than national ones — a tendency that is exacerbated by the fact that senators are apportioned equally among the states, regardless of population. Moreover, our campaign-finance system, whereby those who contribute most to political campaigns are those with pressing business before the Congress, gives each member of Congress yet another incentive to view policy problems from the perspective of a very small slice of the nation. ...

In the Report on Manufactures, submitted in 1791, Alexander Hamilton argued that Congress’s power to “lay and collect taxes . . . to provide for the common defense and general Welfare of the United States” validated his ambitious plan of national development. However, his political opponents thought he was grossly misreading what was originally intended to be an anodyne statement.

But the statement quoted from the Constitution is not anodyne.

It simply points out that the founders thought the national government's main job was to provide for the common defense. The founders never imagined the managerial and welfare state, which represents today over 80% of the budget. Direct taxes were sufficient to fund the small state they did imagine, along with tariffs and excises. The contemporary megastate is only imaginable with direct access to the citizens' pocketbooks, which the income tax has provided only since 1913.

The way forward is the way back. Ideally we should aim to abolish all the federal departments except for the original five (State, Treasury, Attorney General, Defense, Post Office Communications), and tax accordingly (imagine a tax cut of 80%), along with the income tax.

And perhaps we should think about abolishing the Congress too, since we now have well developed state governments which can be tasked with the things the US House and the US Senate cannot seem to cope with effectively any longer.

The greatest fear of the founders was a tyranny of the legislative, but what we've got is more akin to a farce of the legislative. We should think about ending it and let free-market capitalism do its work.