Balancing The Budget–The Purpose of Governments

People hate taxes, but what really riles them is seeing their tax money wasted, misspent or used for purposes that are against their way of thinking.  As our current civil war is heating up over the budget I think we need to draw a bigger picture of why we pay taxes.  Understanding the purpose of governments should help.  I think we can see governments going through four stages:

  • Civilization – creating Law and Order
  • Human Rights – creating freedom for individuals
  • Prosperity – creating sustainable wealth for all
  • Environmentalism – the stewardship of the Earth

If you look at the history of mankind, or just to places around the world where civilization is collapsing you’ll understand the value of a stable government.  Generally civilization starts with the might of individuals, so often early governments are ruled by tyrants, kings, and men with guns.  Sometimes the powerful are enlighten leaders, but often they are just men who want to amass wealth and women.  We saw what happens to civilization when we take out the strong man as when the U.S. took over Iraq.

Most people have an innate desire for law and order and will submit to all kinds of governments, but sooner or later they want to be treated better.  Sometimes this coincides with theocracy, other times it arises out of secular ideals, such as democracy.  For most of history the right to rule was assumed as descending from God.  It’s much easier to accept government from a leader if you assume his rulings are not personal whims but the fulfillment of a divine plan.

The Old Testament is really a history of building a nation.  The spiritual leaders tried to convince the Israelites to create law and order based on God’s rules.  The trouble is people have a hard time agreeing whether the rules are right or not.  Often powerful leaders must pander to the whims of the people, so over the centuries the idea of rights for people evolved.

At first taxes were just to maintain the wealth and might of the leadership, but eventually the masses started expecting their leaders to give them something in return.  Generally this was law and order and a semblance of justice.

By the time the United States was formed people wanted to rule themselves and create a just and ordered society.  They created The Bill of Rights.  Of course, at the time women, African Americans and Native Americans weren’t considered for these rights, but it’s a step in the evolution of Human Rights for all.  Government became something run by the people for the people.  Taxes were meant to maintain civilization and provide a fair treatment of all people, given them the opportunity to prosper and seek happiness.  Taxes went to maintaining civilization and guaranteeing a legal system that protected human rights.

Population was sparse and people were expected to make their own way or die.  There were few social support systems, mostly the charity of individuals and churches.  Many conservatives want this kind of government, but there’s two major problems to this.  First is the explosion of population.  Second the explosion of wealth brought on by the industrial revolution.  For many years governments tried not to interfere with human growth or the creation of wealth, but it’s now too late for that kind of thinking.

The third stage of government is the management of over population and the regulation of wealth.  Government cannot ignore these problems without hurting human rights and even civilization.  The mismanagement of wealth can lead to economic collapse and social disorder.  Back in pioneering days wealth came from the land.  If people failed they died or moved on.  Now the population lives off the economy, which to most is an abstraction.  That’s why it’s so hard to understand why the government needs so much tax money.

If the Republicans got their way and reduced the size of the government and drastically lowered taxes America would end up looking like India or Pakistan.  Overpopulation would hinder the creation of wealth.  Sure, some wealthy people would get much richer, but most of the population would get much poorer.  The purpose of our taxes is to maximize the well being of the population to allow the maximum creation of wealth for all.  In other words, a chicken in every pot.  The trouble is some people don’t like paying for other people’s chickens.

This third stage of government is really about stimulating the economy.  The first stage was about creating social stability, law and order.  The second stage was about making everything fair for all.  Now some people think the third stage is about providing handouts for the poor, but that’s not really true.  What’s really happening is government is trying to create prosperity.  Henry Ford paid his workers a decent wage because he wanted them to be well off enough to buy the cars he made.  The modern role of government is to make sure the greatest percentage of its citizens contribute to the economic growth of the nation and all benefit fairly.

Now I didn’t say the role of the government is to get everyone a job.  Our population has grown way to large for that to be possible.  But if we ignored the people without jobs, the number of them would pull down the nation economically.  Look back at the Great Depression.  People on social security, welfare or unemployment still contribute to economic growth through the spending of government money.

Like it or not, the role of government has become the regulation of wealth and stimulus of economic growth.  Now this might not be done fairly, efficiently or wisely, but it’s the job the government has to do.  Reducing the government will only make our problems worse.  The belief in pure capitalism is a fantasy.

There is emerging a fourth role for government, environmentalism.  Our populations are now so large, and the creation of wealth so vast, that they are consuming the planet.  If governments don’t become ecology cops we’re all going to die from self destruction.

Conservatives want to roll back governments to stage 1 and 2 functions.  Actually them seem to want stage 1.5, law and order with some theocracy, something akin to Old Testament times.  Even though most conservatives call themselves Christians they don’t seem to want to pursue Christ’s job of feeding and healing the poor.  They seem to want law based on their religion, and to only pay taxes for things that benefit them directly, like roads and armies.  That kind of government would probably work if the population density was like it was 2,000 years ago.

Like it or not, government has to be big.  It has to be in the business of managing wealth and population dynamics.  If we took away all those entitlement programs the country would go down the drain.  Our economy is based on economic activity.  Even if we had a smaller population that wouldn’t help the economy, look at Japan, with it’s declining population.  And we also much face up to the problem that a heated economy is killing the planet.

If governments are going to succeed at stage three and four they will need to invent new ways to manage wealth and population, and reducing taxes or making the government smaller just isn’t a solution for solving those problems.

Also, notice the interactions between the stages.  Without stage 1, stage 2 can’t exist.  Without stage 2, stage 3 can’t exist.  You’d think stage 4 would be above stage 1 because if the ecology collapses, so will civilization.  But without civilization you can’t think of ecology.  So it becomes a circular process.

JWH – 2/27/11

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