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Elizabeth Warren Shouldn't Be So Proud that Her Big Plans Are Already "Paid For"

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12/21/2019

When Elizabeth Warren performs verbal, accounting, and economic distortions to claim that her cornucopia of government expansion plans will be paid for almost without any cost to anyone not tagged with the scarlet letter R (for Rich), she is following in President Obama’s footsteps. During his campaign, he derided John McCain’s tax and spending proposals for not adding up and claimed ethical superiority because his own plans were “fully paid for.” Of course, he then ramrodded through the largest unfunded government expansion in history.

Unfortunately, pushing allegedly “paid for” programs does not justify ethical preening. Even when the assertion is true, which is not even remotely possible in Warren’s case, since her plans' central feature is taking large amounts from some to give to others, it violates universally accepted moral norms (e.g., “you shall not steal”), even if it identifies who will be victimized and the planned extent of the victimization.

It is true that in one sense, spending expansions that lay out how they would be financed are more honest than ones that don’t. Rather than leaving the question of who will bear the harm ambiguous (as with deficit spending), they reveal who will be forced to pay and how much. However, that does not make the imposition of financial harm — called robbery if done privately — ethical.

“Paid for” plans can be politically courageous, because they risk disadvantages that are avoidable with undefined funding. Notifying “mandated donors” can create more opposition than leaving the bearer of the burden vague. But Warren’s plans double down on Obama’s approach of minimizing that risk by going after those who can be demonized — corporations — or exploited through others’ envy — “the rich.”

“Paid for” plans, even if that description is accurate, to dispense benefits to political constituencies out of others’ pockets are only ethically superior to the extent that announcing the intended victims in advance makes theft less unethical. But slightly more forthcoming thieves are still thieves. Naming who will be plundered does not justify plunder. The ethical emphasis on “paid for” plans, which turn out not to be, merely contrasts the ethical high ground claimed with the ethical low ground actually pursued.

Warren’s plans, like Obama’s plans before her, are only “paid for” by way of heroically exaggerated assumptions. She cannot actually know what will happen under the yet-to-be-implemented plans, because she cannot anticipate all the responses to the many incentives that will change. Her hoped-for administration’s under-analyzed premises are frequently preposterous. And hyping plans as solutions, when one cannot actually know their effects, is also ethically questionable. That infirmity is amplified by the fact that by the time her proposals would be fully implemented, it might be all but impossible to undo the damage from misguided centralization.

Political posturing aside, whether a proposed expansion of government benefits for some is “paid for” is not the primary question. That question, made clear by the Preamble to the Constitution, is, will it advance Americans’ general welfare? When income redistribution is the primary result, that test cannot be met. Some citizens are intended to benefit by the imposition of harm on others, effectively buying their votes.

If Elizabeth Warren really believed that being “paid for” was the touchstone of successful policy, she would not be proposing to unprecedentedly balloon the scope of the federal government almost everywhere she turns. Further, she would not propose running roughshod over so many voluntary market arrangements for the simple reason that in the marketplace, absent fraud (whose prevention is a legitimate job that government routinely fails at, as recent experience amply demonstrates), benefits are actually “paid for.” No one can force harm on others when exchanges must be voluntary. All parties gain, which cannot be said of plans that intentionally take from their “targets” to give to those politically favored. And ethically, paid-for-without-theft beats paid-for-by-political-predation. Over and over, Warren's proposals reveal not superior ethics, but larger scale ethical violations. Such “paid for” predations remind me of Will Rogers’s quip, “I can remember way back when a liberal was generous with his own money.”

Author:

Gary Galles

Gary M. Galles is a professor of economics at Pepperdine University. He is the author of The Apostle of Peace: The Radical Mind of Leonard Read.

 

Note: The views expressed on Mises.org are not necessarily those of the Mises Institute.
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