The Bell Muffles Ring of Liberty
by Ari Armstrong, April 28, 2004
In order to promote higher taxation and to increase government interference, the political left created The Bell Policy Center to counter the effectiveness of the Independence Institute.
On April 21st of this year the center released a study titled, "Opportunity Lost: When Hard Work Isn't Enough for Colorado's Families." The missing ingredient, according to this study, is more political force to redistribute wealth.
The study reports that "over 121,000 working families, or 21.8%, earn less than 200% of poverty ($29,648 for a family of three in 2003)," and over 32,000 of those "live below the federal poverty line." The study characterizes this as a "relatively small number of poor and low-income working families living here."
Therefore, reasons the study, Colorado politicians should force tax payers to pay more to educate adults in basic knowledge, language, and "workplace literacy;" more on college subsidies and more on "the basics such as housing, food, utilities, health care, child care, and transportation" for "low-income families." (The study did not explicitly mention subsidies for the kitchen sink, but presumably that would be included under "housing.") Not surprisingly, the "number one recommendation" is to "reform" the Taxpayers Bill of Rights.
Of course, the study's conclusion follows logically when and if government force is the only way to address social problems. However, the expansion of the political sphere requires the contraction of the sphere of voluntary choice. The authors of the study don't make the case that their political solution is the best one or even a good one. They just assume that more government is the only solution.
If the writers were more realistic about "removing barriers" to opportunity, they would describe the way building restrictions artificially increase the costs of housing. They would discuss the failure of government-run schools to educate many of Colorado's poorest students. They would address the high tax and regulatory burdens that hurt families trying to start a small business. They would examine the ways in which partial socialization of medicine has driven up costs, destroyed the competitive insurance industry, and reduced the supply of competent doctors. They would contemplate the ways political interference in the labor market increases the difficulty of finding a first job. In addition, the authors would recognize America's robustly charitable spirit is necessarily dampened by high tax burdens.
But this study doesn't offer suggestions for removing the political barriers that keep people poor. Instead, the authors of the study see more political force as the only solution, and never as the problem.
What is the magnitude of the problem of poverty? Authors of the study overlook two important trends. First, it's obvious that most people experience periods of relative prosperity and of belt-cinching. A family that falls into poverty for a couple of years because of a lost job or illness, yet owns a home and savings and has strong family support, is hardly comparable to a family living in the streets. The study's statistical aggregates tell us little about reality. A large part of the poverty problem described in the study involves hard-working families who have suffered a temporary setback and who are striving to improve their situations.
Second, some "low-income" families, even those officially impoverished, are not necessarily destitute. According to the Census Bureau, 46% of poor households own their own homes. Large majorities of the poor have air conditioning, cars, cable TV, good nutrition, and so on. Thanks to America's relatively free economy, many poor people in America enjoy living standards higher than the middle class in many other countries.
This study suffers from another methodological problem: it ignores incentives. People with the incentive to economize generally do so, while people with subsidies to burn generally set their budgets accordingly. One way in which people stay off welfare is through their choice to delay having children until they can afford them. A second way is that they can choose to live without an automobile (my family has done both). One advantage voluntary charities have over bureaucratic welfare programs is that charities are better at helping people without destroying those same people's incentives to also help themselves.
The Bell paper unrealistically ignores the political impediments to prosperity, the problems with the expansion of political force to redistribute wealth, and the virtues of voluntary alternatives. The study is, unfortunately, an opportunity lost.
INDEPENDENCE INSTITUTE is a non-profit, non-partisan Colorado think tank. It is governed by a statewide board of trustees and holds a 501(c)(3) tax exemption from the IRS. Its public policy research focuses on economic growth, education reform, local government effectiveness, and Constitutional rights.
JON CALDARA is the President of the Independence Institute.
ARI ARMONSTRONG is the publisher of FreeColorado.Com.
NOTHING WRITTEN here is to be construed as necessarily representing the views of the Independence Institute or as an attempt to influence any election or legislative action.
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