Fiscal Policy Nudging Freedom
By Senator Pamela Gorman, Arizona State Senate
It is commonly said that tax policy is a form of social engineering. I don’t disagree. But, I believe that statement needs to be expanded to say that all fiscal policy is social engineering. The ways we spend the money we take away from Americans matter, but are often overlooked when considering how the populace will behave.
It all comes down to motivations. What motivates a man to work, to handle his finances responsibly, and yes, to give generously of his time and treasure? It is my long-held belief that the left has a different core belief on this, and while we may all want the same things for the country in general terms (i.e. happy, fed, safe people), we disagree on the path to get there.
As an example, consider a smart man who is working fewer hours than he could. Does he work an extra shift each week so that he can pay more taxes by being bumped into a higher tax bracket? Or, consider an entrepreneur. Does he open a new business in a state that skims off his profits through high taxation? Probably not, as that would be the opposite of smart. Rather, the tax policies guide a thinking man’s behavior and create the government-engineered circumstances that have a negative ripple effect in the economy.
As for spending as a way to engineer society, we need only look as far as recent actions by our federal government for a great example. Congress took our money and spent it on subsidies to new car buyers. So, people bought new cars. Normally, in an economic crisis, people don’t put buying a new car at the top of their “needs” list. But, the behavior was changed by the nudge of the opportunity to get a new car at least partially paid for by other Americans.
In the same way, does a smart man buy health insurance from a private company to offset his healthcare cost risk if he can get better benefits for less through a government subsidized plan? No. That would be the opposite of smart. So the behavior is steered, not by tax policy but by spending policy. The decision to spend money to subsidize healthcare plans has a very direct and destructive effect on the industry. In Arizona, this is already going on with our own state-subsidized Healthcare Group plan and the full blown state-paid healthcare system of AHCCCS. If Obama has his way, we will see this all across the United States.
As the policies of the Obama administration and our current Congress reach further into the realm of possibilities for social engineering through the combined “power tools” of taxation and spending policies, our choices for how we will live our own lives are being limited a little more with each passing day. The reason is that as behaviors are changed to accommodate the path of least resistance to the most basic needs of man, the market for previously desired products, activities, and services shrinks. Eventually, they will just go away entirely.
Indeed, the danger of the social engineering being engaged by our current Democrat-controlled Congress and President Obama may appear at first blush to be mostly about growing national debt and over-bearing government intrusions into our daily lives. But, the sleeper issue that keeps me up at night is the loss of our freedom to choose once infrastructures and industries have re-tooled to adapt to the rush of behavioral changes that evolve from the left’s current and proposed policies. When we lose our choices, our freedom isn’t far behind.
