With fiscal austerity in vogue and social liberalism spreading, is this the libertarians’ time? Excerpt from Inforum’s “WWLD: What Would Libertarians Do?,” July 25, 2011.
NICK GILLESPIE, Co-editor, Reason magazine and Reason.tv; Co-author, The Declaration of Independents
MATT WELCH, Co-editor, Reason magazine and Reason.tv; Co-author, The Declaration of Independents
In conversation with JOE GAROFOLI, Reporter, San Francisco Chronicle; Author, Politics Blog, SFgate.com
GAROFOLI: Why don’t you define for us, in your words, what libertarianism is?
GILLESPIE: A libertarian is somebody who is fiscally conservative and socially liberal. That’s one way to think about it. Reason magazine for years has talked about being in favor of free minds and free markets, the idea that the individual matters most and that economic and civil liberties are conjoined; you really can’t have one without the other. Another way, just to throw it out there, is that Matt and I like to define libertarian as an adjective rather than a noun. Being a libertarian is not necessarily checking off your 10 policies that you agree with so you’re a libertarian. It’s an impulse, a pre-political impulse that informs the choices that you’re interested in making as your default setting. Should the individual have more or less opportunity to control their own destiny, to have choices that are meaningful to them? That may not always be the final answer that you give in a situation, but if that’s what you keep coming back to, you just might be a libertarian.
GAROFOLI: Why is this a libertarian moment?
WELCH: A couple of different factors. One is that independents have never really been as large of a political bloc as they are now. According to the Pew Research Center in their most recent look at this, independents are 37 percent, Democrats are 31 or something like that, and Republicans are 29. Gallup poll, same thing.
We’re doing now in politics what we’ve done everywhere else in our lives, which is reject every brand with the possible exception of Apple Computer. We don’t live in Chevy families or GM families like we did when I was growing up. These things don’t make sense to us anymore; we tailor it to our own individual needs. Politics, more and more, is like the local newspaper: we want to unbundle it. We want to have that experience and it doesn’t make sense to us anymore like it used to. Why should we tether fiscal conservatism [and] the idea that we shouldn’t be growing government and over-regulating things with the notion that we’ve got to make sure that gay people can’t get married?
That’s a great precondition for it all and especially people who are younger than Nick; they’ve been born and raised on the Internet on some level, where there isn’t a lot of people who tell you what to do, despite the fears of many people that AOL-Time Warner was going to crush us like a bug; that didn’t really turn out that way. These are important preconditions.
As important right now, the two major parties – it’s not like they’re the same party, but once they’re in power they tend to perpetuate the same policies, whether it’s intervention war, drug war, education policy, these types of things. It’s kind of indistinguishable at the practical level there.
GAROFOLI: The talk in Washington is all over the debt ceiling. In your book, you rip on all kinds of government bailouts – the TARP program, car company bailouts –
GILLESPIE: The only bailout [we support is] for small magazines of a libertarian persuasion.
GAROFOLI: You ripped on newspaper bailouts too, incidentally.
GILLESPIE: Yeah. You would, too, right?
GAROFOLI: I don’t want the conflict of interest. As you put it, the U.S. can’t afford these programs, because we are “so out of money.” So if people on both sides of the duopoly aisle are saying they fear that the U.S. will go into default, what would you do? Do your raise the ceiling?
WELCH: Cut spending and raise the ceiling. Basically.
GILLESPIE: The fact is that the debt limit is important and you’ve got to deal with that, but to just raise it – as President Obama was talking about doing, and John Boehner had signaled early on that he was OK with that – without any conditions is a problem, because the issue isn’t the debt ceiling per se. It’s that we have been on an unbelievable bender of spending in the 21st century that shows no signs of stopping. Standard & Poor’s – God forbid you use their ratings when you’re buying any kind of bond that’s a mortgage-backed security – but they said, It’s great if you take care of the debt ceiling, but in three months, if you don’t have a plan in place to trim $4 trillion in future deficit spending, we’re going to downgrade you. What are we doing about the fact that we are persistently spending a lot more money than we’re bringing in? That’s what we should be talking about.
GAROFOLI: Do you have a proportion or numbers? Like, 25 percent cuts?
GILLESPIE: An understanding is that since 1950 we have averages, in terms of revenue as a percentage of gross domestic product or economic activity; it’s been around 18 percent despite every attempt to raise it or lower it. It keeps coming pretty tightly clustered around there. We’ve been spending 20 percent. Of course now, because of the recession, receipts are at about 15 percent of GDP and we’re spending about 25 percent, so the gap grows, which is one of the reasons why you want to have a rainy day fund or some flexibility. We don’t have that.
In 10 years we can expect to have a tax revenue of about 19 percent of GDP. How do we get there from here? It’s easy. You compound small cuts of about 3.5, 3.6 percent a year of each budget over time. We’re spending about $3.88 trillion dollars now; we’d be spending about the same in 10 years as opposed to $4.7 trillion under Paul Ryan or $5.7 trillion under Barack Obama. If we were spending $3.7 trillion in 2021, that would be about 18 percent of GDP, which is exactly the same percentage that we spent the last two years of Clinton’s presidency.
GAROFOLI: Where would the cuts come from?
GILLESPIE: The big money is in military, Medicare and Social Security. It’s not hard to find fat. We have doubled military spending, basically, since 2001. We have nothing to show for it other than a lot of spent money.
WELCH: And we have a number of departments in Washington, D.C.; we have to make a decision: Do you want even a shadow of the current welfare state/safety net entitlement programs, or do you really want a Department of Agriculture? We’re out of money. You’re going to have to make decisions. That’s why you had a pension reform that almost passed in San Francisco, because you’re out of money. You’ve got to do something. The word unsustainable is being used by people like Barack Hussein Obama and Ben Bernanke, talking about our current trajectory just on what we’re going to have to pay for 10 years from now. So if you’re not talking about making a hard decision right now, you’re a problem.
That goes for citizens as well as politicians at this point. If you want your big, fast bullet train to nowhere in the middle of the Central Valley for some reason, OK, great. But you’re going to have to give up a pension system; you’re going to have to do something.
Get rid of all agricultural subsidies right now. Let poor farmers sell us stuff, and start making these kinds of hard decisions.
GAROFOLI: Continuing on that, in the book you say, in virtually all ways in the United States, things have been getting better and better over the past 30, 40 and 50 years. But that’s not true for everybody. There is very little said in your book about the poorest Americans. What do you do about the folks that live in the depths of poverty – the permanent underclass?
GILLESPIE: One of the things – and this shows you where libertarians have their issues and whatnot – we believe in a governmentally provided social welfare safety net. One of the things is that –
WELCH: Not every libertarian does, in case that’s not clear.
GILLESPIE: Private organizations have been doing it and generally can do it better, because they’re more responsive to the needs – both of the people they’re giving money to as well as the donors who want results – as opposed to the bureaucracies. For the poor, here are the things: One is that you want a vibrant economy because it is true, it’s never good to be poor, but it’s better to be poor now than it was in 1970 by any material measure. But you get rid of things like a public school monopoly that is designed, even if we spend more money on inner-city schools than in many places we do on better schools, those schools are designed to keep people poor. They’re not there for the kids; they’re there for the people who run them. Introduce radical school choice and let people get out of that. Get rid of the drug war, which doesn’t do anything but focus dysfunction and police brutality and weirdness, or lack of police attention, in certain areas and punishes people.
WELCH: Those are a couple of immediate ways to help restructure American society so it’s not rigged against the poor.
GAROFOLI: But you would keep a social safety net. You would keep some sort of entitlement system.
GILLESPIE: It’s not an entitlement. If we got rid of Medicare or Social Security, or instead said: “We are going to help people who are indigent, who can’t care for themselves because of some impairment, or are kids whose parents can’t take care of them, old people who need help.” That is one thing. We don’t have that. Medicare and Social Security and most entitlement programs go to serve the middle class and the wealthy. They’re bad at that. Think about it: If you’re young and you could have been taking 12.4 percent of your wages and investing that for your retirement, you would retire in a pretty good situation as opposed to what you get with Social Security. There is no reason that with Medicare, just because you turn 65 you should get free or reduced medical care. That’s wrong. If we got rid of these programs or changed them drastically, we’d be able to reduce the overall tax burden, which would help things flourish. And we’d have more money and time to focus on helping people who actually need help.
GAROFOLI: So means testing by income.
GILLESPIE: Yeah, and getting rid of these entitlements. Social Security and Medicare are creations of the New Deal and a Depression-era mentality. Medicare was like the last great act of the New Deal. You know what? We live in a different America. We live in a different world. We don’t need that the way that we did. Seniors are not more likely to be below poverty than above it, as they were even into the ’60s.
GAROFOLI: What about abortion?
GILLESPIE: What do you need – cash or a check? [laughter]
GAROFOLI: About 30 percent of libertarians oppose abortion rights. You say this isn’t a litmus test for being a libertarian.
GILLESPIE: I’m not a big fan of litmus tests. I don’t even like them for the presence of alkali. I find litmus tests are rigid.
WELCH: I am the opposite of a social conservative in every way, shape and form. I’m easily irritated by people who try to inflict their social conservatism onto public policy. Of all the issues that I have at least an intellectual respect for, even if I disagree with it, it’s anti-abortion from the libertarian perspective. Libertarians are obsessed with individual rights vis-à-vis the government. If someone in their brain sees that individual right adhering to a one-hour-old fertilized egg, I think it’s kind of weird, I don’t agree with it, but I understand where they’re coming from in a way that I absolutely do not for one second understand opposition to gay marriage, for example.
AUDIENCE MEMBER: Considering your definition of libertarianism as fiscally conservative, do you believe that without the Recovery Act and TARP the recession would have been able to pull itself out and would not have fallen into a depression?
WELCH: It’s the great unknowable or unfalsifiable. It gets bumped up. It wouldn’t have just been the depression, but it would have been the depression to end all depressions, I believe, but it’s only a belief because we can’t know if you would have allowed people who made bad bets and bad decisions to go bankrupt, that if you would have rejected the notion of too big to fail as scaremongering by Goldman Sachs – which it was on some level, and maybe some of it was honestly felt by a variety of people – and you would have said, for example, “How can we get the government out of the business of guaranteeing 99 percent of new mortgages written in this country and allowed the real estate market to actually clean its toxic assets out and find a bottom?” I think we’d be a lot better off than we are now.
Where we are now is consistently exceeding all worst-case scenarios that were offered at the time for what would happen if we didn’t pass their panic new legislation, whether it was TARP or the stimulus or the Omnibus, which we’ve already forgotten, or George W. Bush’s stimulus, which we’ve also already forgotten. Every one of these things was like, “If we don’t pass the stimulus, unemployment might get as high as 8.8 percent.” We have shot through that.
We don’t believe that this spending program is going to work. We’re going to put our names on the record that that is actually a bad idea, that Keynesian stimulus is not a winner. There’s only one example from history where you can say it might have worked, but it’s kind of disputed, whereas there are many examples of cutting the size of government in tough times, like after World War II in America and New Zealand in the ’80s or Canada in the ’90s, where you cut the size of government in the teeth of a potential recession and, lo and behold, it worked out. You have to let capitalism work, which involves and requires failure and bankruptcy, which is different from liquidation entirely.
