The Freedom Factory

This article is dedicated to the growing segment of American society that is awakening to the ideas that we are increasingly overworked and overtaxed. My goal is to determine an effective tax burden on the average middle-class American. I will leave it to the reader to judge relative severity of the burden as measured against associated “benefits” to which he is “entitled” from the system. Continue Reading

B Y LAWRENCE W. R E E D

These are the times that try men’s souls. The summer soldier and the sunshine patriot will, in this crisis, shrink from the service of their country; but he that stands by it now, deserves the love and thanks of man and woman. Tyranny, like hell, is not easily conquered; yet we have this consolation with us, that the harder the conflict, the more glorious the triumph. What we obtain too cheap, we esteem too lightly: it is dearness only that gives everything its value. Heaven knows how to put a proper price upon its goods; and it would be strange indeed if so celestial an article as freedom should not be highly rated.”

So began the first of 16 pamphlets under the title “The American Crisis,” by patriot Thomas Paine. These very words were read aloud to General George Washington’s forlorn and
bedraggled men on Christmas 1776, the night before the Battle of Trenton.

Consider the backdrop: For the six months since the Declaration of Independence, Americans had been in almost constant retreat. To a disinterested observer, the American cause must have seemed hopelessly quixotic. To many patriots as well, it appeared all but lost. But Paine’s stirring words helped give the troops the morale boost they needed. The next day they accomplished the impossible, capturing nearly the entire force arrayed against them. Desertions plummeted and reenlistments soared.

Lovers of liberty need a little Paine today in the face of all the pain around us. It seems at times that the world has gone mad. Companies that lose billions are being bailed out by a government that loses trillions. The same federal Leviathan that outlaws competition in first-class mail delivery but still can’t deliver letters at a profit now supposedly knows how to run auto companies, banks, and insurance firms. Debt, deficits, bureaucracy, regulation, government spending—the depressing stuff already in frightful superabundance pre-financial crisis—now threaten our diminishing liberties more than ever before. The cover of the March 15 issue of Newsweek proclaimed,“We Are All Socialists Now.”

No Sunshine Soldiers

Maybe we have good reason to feel like those dispirited troops on Christmas Day in 1776, but
we should learn from what they did just a day later. We can either be summer soldiers and sunshine patriots, or we can let the very principles we profess be our rallying cry for the battles ahead.

Eternal optimist though I am, I admit that pessimism really tugs at me when I read the morning papers. At every speech I give these days, there’s a sizable portion of the crowd that seems ready to crawl under a rock and let the world go to a statist hell in a hand basket.

But then I ask myself, what good purpose could a defeatist attitude possibly promote? Will it make me work harder for the causes I know are right? Is there anything about liberty that an election or events in Congress disproves? If I exude a pessimistic demeanor, will it help attract newcomers to the ideas I believe in? Is this the first time in history that believers in liberty have lost some battles? If we simply throw in the towel, will that enhance the prospects for future victories? Is our cause so menial as to justify deserting it because of some bad news or some new challenges? Do we turn back just because the hill we have to climb got a little steeper?

Readers of this magazine [The Freeman] should know the answers to those questions.

This is not the time to abandon time-honored principles. I can’t speak for you but someday I want to go to my reward and be able to look back and say, “I never gave up. I never became part of the problem I tried to solve. I never gave the other side the luxury of winning anything without a rigorous, intellectual contest. I never missed an opportunity to do my best for what I believed in, and it never mattered what the odds or the obstacles were.”

A Tradition of Courage

Remember that we stand on the shoulders of many people who came before us and who persevered through far darker times. The American patriots who shed their blood and suffered through unspeakable hardships as they took on the world’s most powerful nation in 1776 are
certainly among them. But I am also thinking of the brave men and women behind the Iron Curtain who resisted the greatest tyranny of the modern age, and won. I think of those like Hayek and Mises who kept the flame of liberty flickering in the 1930s and ’40s. I think of the heroes like Wilberforce and Clarkson who fought to end slavery and literally changed the
conscience and character of a nation in the face of the most daunting of disadvantages. And I think of the Scots who, 456 years before the Declaration of Independence, put their lives on the line to repel English invaders with these thrilling words: “It is not for honor or glory or wealth that we fight, but for freedom alone, which no good man gives up except with his life.”

As I think about what some of those great men and women faced, the obstacles before us today seem rather puny. We just need to gird our loins. We have to get a lot smarter and better at reaching more fellow citizens with a compelling alternative to the dead hand of the corrupt and incompetent State. We need to put confident smiles on our faces and sally forth.

Time to Rally

We should not squander a second feeling bad for ourselves. This is a moment when our true character, the stuff we’re really made of, will show itself. If we retreat, that would tell me we were never really worthy of the battle in the first place. But if we resolve to let these tough times build character and rally our dispirited friends to new levels of dedication, we will look back on this occasion someday with pride at how we handled it. Have you called a friend yet today to explain to him or her why liberty should be a top priority?

Nobody ever promised that liberty would be easy to attain or easy to keep. The world has always been full of greedy thieves and thugs, narcissistic power seekers, snake-oil charlatans,
unprincipled ne’er-do-wells, and arrogant busybodies. Sometimes they’re nattily dressed in custom-tailored, pin-stripe suits and give good speeches; sometimes they’re bedecked in jewel-studded robes and give lousy speeches; on yet other occasions they wear well-worn street clothes and don’t bother with a speech at all as they hold you up. It doesn’t matter how they’re dressed or what they say. No true friend of liberty should just roll over and play dead for any of them.

Wipe that frown off your face and get to work. Liberty’s future depends on you.

Lawrence W.Reed is the president of the Foundation for Economic Education

New Zealand Prime Minister John Key speaks a strange language. It’s English, all right, even with an accent, but he is one of the only world leaders who is speaking of relaxing regulations, cutting taxes, spending within budget, and focusing on making his country more productive.

Rather than jumping on the tax, borrow, spend, print, populist bandwagon with nearly every other world leader, John Key’s solution to the tough times is to “use this time to transform the economy to make us stronger so that when the world starts growing again we can be running faster than other countries we compete with.”

Key’s idea is to grow the country out of recession by improving productivity, not simply catering to populist calls for wealth redistribution, stifling regulation, and growth-inhibiting class warfare taxes. He calls attempts to use debt and money printing to “prop up growth” risky, saying that saddling future generations with debt could be counterproductive. He is one of the only politicians who states “There is actually a limit to what governments can do.”

At a time when governments are growing by leaps and bounds, and everyone seems convinced that Big Brother holds the keys to economic prosperity, it is refreshing to see a world leader (actually an ex-currency trader) embrace sound economic principals.

Key admits that New Zealand will not pull the world out of recession; it’s too bad other leaders lack such humility!

Here’s a link to the Wall Street Journal interview with Key.

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Like you, I am upset at the egregious pace of government spending without restraint.  I am upset more and more people are using the force of government to take from the responsible, productive, and tax paying American people in order to re-distribute wealth.  Wealth, gained through honest, industrial, and capitalistic work.  Wealth gained by free market exchange of materials, services, and ideas.  Wealth, the reward for sacrifice, hard work, planning, and thrifty living.

We learned at young age thriftiness means: working to pay one’s way and to help others, saving for unforeseen needs, and protecting and conserving natural resources.  Thriftiness is a virtue absolutely lost on large populations today.  The loss of virtue is evident in the reward for people who extended beyond their own means.  People who knowingly agreed to contract to repay for a dwelling they had no means to pay for are without virtue.  Virtue is gone as a growing populace continuously uses government to forcefully take from those of responsible means and give to those who have not earned it. Virtue is found in the entrepreneurs, the inventors, and the industrialists inside the very fabric that made America great.  The same virtue is found in every hard working American who puts in extra time, strives for extra hours or works multiple jobs in order to provide a better quality of life.  Abraham Lincoln:

Property is the fruit of labor…property is desirable…is a positive good in the world. That some should be rich shows that others may become rich, and hence is just encouragement to industry and enterprise. Let not him who is houseless pull down the house of another; but let him labor diligently and build one for himself, thus by example assuring that his own shall be safe from violence when built.

As we work harder, more and more people feel entitled to the fruits of our hard work.  These people have organized and elected a federal government that sees fit to transfer 100% of the tax burden to the upper 49% of wage earners in this country.  If successful, please tell me how 51% of the population who is receiving some form of entitlement from the 49% of tax-paying Americans ever give that power up. Thomas Jefferson said it better:

A democracy is nothing more than mob rule, where fifty-one percent of the people may take away the rights of the other forty-nine.

or maybe even more telling, Thomas Jefferson:

The democracy will cease to exist when you take away from those who are willing to work and give to those who would not.

When you only tax a certain portion of the populace, you have already set up class warfare because the people not paying taxes have everything to gain and nothing to lose.

And I have to include my favorite quote from Alexander Fraser Tytler:

A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship. The average age of the world’s greatest civilizations has been about 200 years. These nations have progressed through this sequence: ‘>From bondage to spiritual faith; From spiritual faith to great courage; From courage to liberty; From liberty to abundance; From abundance to selfishness; From selfishness to apathy; From apathy to dependence; From dependence back into bondage.

What we are presented with today is not just doom and gloom for free-market capitalists because the government is applying more regulations and taxes for the “common good” to promote the “general welfare.”  But rather, we are experiencing the largest transfer of power from the American people to the government in the history of this great nation. We, the worried liberty loving, free market capitalists who generate jobs and fortunes never before seen on this earth will soon be silenced.  Soon, we won’t have a vote because we will be in the eternal minority of achievers who make this country run.  We,  are the motive power behind economic superiority.  The take-over of our liberty and property is being cheered as popular change.  Change that promotes giving people an equivalent fish to eat today, while relying on hard working individuals to fish harder tomorrow in order to provide more fish to the same undeserving people.  You have the right to pursue happiness, i.e. go fishing, you do not have the right to be given a fish at the expense of someone else.

The system works because we’re too busy working harder in order to be taxed more in order to maintain a quality life we have earned.  They rely on us and our ingenuity to invent new wealth such that they can tax it and redistribute it.

Ludwig von Mises:

It is important to remember that government interference always means either violent action or the threat of such action. The funds that a government spends for whatever purposes are levied by taxation. And taxes are paid because the taxpayers are afraid of offering resistance to the tax gatherers. They know that any disobedience or resistance is hopeless. As long as this is the state of affairs, the government is able to collect the money that it wants to spend. Government is in the last resort the employment of armed men… Those who are asking for more government interference are asking ultimately for more compulsion and less freedom.

I understand if you are frustrated. I am frustrated too.  It seems as if we don’t have a voice to be taken seriously because we are called selfish for wanting to keep the property we have earned in our lives.  Never forget, we earned our property such that we have the personal choice to do with it as we please. That choice is called liberty.  When you exercise your choice, you have experienced freedom.    It’s not selfish, it’s your constitutional protected right to have the choice on how your property is distributed.

William Boetcker:

You cannot bring about prosperity by discouraging thrift. You cannot help small men by tearing down big men. You cannot strengthen the weak by weakening the strong. You cannot lift the wage-earner by pulling down the wage-payer. You cannot help the poor man by destroying the rich. You cannot keep out of trouble by spending more than your income. You cannot further the brotherhood of man by inciting class hatred. You cannot establish security on borrowed money. You cannot build character and courage by taking away men’s initiative and independence. You cannot help men permanently by doing for them what they could and should do for themselves.

Death and taxes a given?  We can’t die without at first living.  We can’t pay taxes without at first prospering.  I ask the government to get out of the way of the industrialists, the capitalists, and the hard workers such that we can prosper.  A government that strives to guarantee equality of outcomes is in direct violation with a constitution that guarantees equality in opportunity.

The government relies on our taxes every pay period, every month in order to provide entitlements to those who have not earned them.  They won’t pay attention until they know we are serious about fighting back.  If we want them to pay attention, we need to withhold, even for just a little while, the very thing they rely on us to provide.  Without the legalized looting of their plunder, our property, the government won’t be able to fund the programs that enable and promote the very anti-thriftiness ideals that are so popular today.

Raise your federal and state tax withholding to the maximum for 2009. When April 15, 2010 comes along, file the maximum extension.  Delay paying into a system that only wants to drain you as long as legally possible. Let this be the wake up call to all liberty loving Americans. Let this be our generation’s tea party.