Wednesday, February 18, 2009

New Deal and Stimulus: Impractical and Unconstitutional

In perusing for the argument intended to demonstrate that Roosevelt’s New Deal was ineffective and in fact had the opposite effects of what is historically claimed by its proponents, the best and most cogent case was probably put forth by Jim Powell of the Cato Institute, a conservative think tank.
There are just as many arguments supporting Roosevelt and the current Obama stimulus plan of massive government spending which purports to mirror the New Deal.
Powell’s arguments, in summary, essentially amount to a few key points:

1. The New Deal actually imposed mostly on the very people it was designed to help. “The most important source of New Deal revenue were excise taxes levied on alcoholic beverages, cigarettes, matches, candy, chewing gum, margarine, fruit juice, soft drinks, cars, tires (including tires on wheelchairs), telephone calls, movie tickets, playing cards, electricity, radios -- these and many other everyday things were subject to New Deal excise taxes, which meant that the New Deal was substantially financed by the middle class and poor people.”

2. Higher taxes actually destroyed jobs. “New Deal taxes were major job destroyers during the 1930s, prolonging unemployment that averaged 17%. Higher business taxes meant that employers had less money for growth and jobs. Social Security excise taxes on payrolls made it more expensive for employers to hire people, which discouraged hiring.”

3. New Deal programs didn’t increase the number of jobs. “These didn't increase the number of jobs in the economy, because the money spent on New Deal projects came from taxpayers who consequently had less money to spend on food, coats, cars, books and other things that would have stimulated the economy. This is a classic case of the seen versus the unseen -- we can see the jobs created by New Deal spending, but we cannot see jobs destroyed by New Deal taxing.”
Since my own politics are libertarian and I’m horrified by anything resembling the New Deal, my sympathies obviously reside with the case Powell makes. But rather than debate the practical economic consequences of the Roosevelt and Obama philosophies, it is actually more instructive to examine the constitutionality of these plans.

Plainly, thanks to Democrats AND Republicans, the Constitution is a dead letter. To say that the Congress violates the Constitution (and the oath they take to uphold it) every day of their lives is a gross understatement. Even worse, members are so ignorant of the Constitution that they don’t even know they’re violating it. Liberals have ignored the Constitution for decades and now there is complete and absolute Republican complicity.
Liberals have always been result-oriented, meaning that first they know the result they want, and then they read into the Constitution whatever they need to read into to attain that result.
The perfect example is the death penalty. Liberal justices Thurgood Marshall and William Brennan always voted to strike down capital punishment simply because they were personally opposed to it – and despite that the Constitution clearly permits it. That’s not the way judges are supposed to behave. Again, result-oriented.
Regarding the New Deal and the Obama plan, an honest reading of the Constitution simply cannot permit any of these programs. The Constitution expressly gives the federal government very few things it can do. Those powers which are not expressly granted to the federal government (see Tenth Amendment) are reserved to the states. It couldn’t be more plain and simple – unless you didn’t care about violating the Constitution.The Tenth Amendment – which even conservative judge Robert Bork states is “unenforceable” – is easy enough to read for anyone who cares about the document. The downfall of conservatism was when power became more important than principle and they sold out to the basic assumptions of big-government liberalism, more commonly known by its true name – Democratic and Republican socialism.

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