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by Neville Kennard, practising and preaching capitalist

It is not surprising that in a democracy a populist government (and aren’t they all?) will opt for some short-term palliative, a superficial fix that will see it continue to be popular for the rest of its election cycle.

And it’s not surprising that a government will take advice from taxpayer-funded bureaucrats or consultants. And it is equally not surprising that these taxpayer-funded “experts” will give advice that will lean towards their own well-being.

Thus we have destructive “stimulus spending”, morally-reprehensible “tax handouts to all” (even non-taxpayers) with advice to spend it, rather than save it.

Any citizen with an ounce of common-sense can see that it was exuberant spending, reckless borrowing, a sense of endless prosperity that got people and companies into the over-borrowed mess they are in. And the way out is not more spending, but saving. More spending will give a short-term boost, but what then? Another boost? Another stimulus and hand-out? It is quite likely that this is what the government will do.

They probably do know that the piper will have to be paid one day, but perhaps this day will be on someone else’s watch and the incumbents won’t have to be the ones paying, the ones prescribing and taking the strong medicine.

Prosperity comes from saving and investment, not from spending; spending, when it as a result of saving and investment, is affordable and sensible; spending is what we have saved (and invested) for.

So what should they be doing? This is very simple. But it is not politically easy.

  1. Cut taxes, and while you’re about it, reform and simplify the tax system; help people and companies to save, pay off debt, accumulate capital. Eliminate the most destructive taxes, like payroll taxes, capital gains taxes, and the dozens of nuisance taxes.
  2. Cut spending, government spending that is. Razor-gangs, slash and burn, anything that will reduce the non-productive costs, the waste, the destructive burden of government. Eliminate or reduce substantially minimum-wage laws and employment restrictive laws so employers can hire (and fire) easily. Eliminate, not just reduce, some government departments.
  3. Deregulate: lighten the regulatory burden; more slash and burn. Make Canberra a ghost town. Watch an emigration out of the tax-consumption capital of Australia. These people can get real jobs and find out what it’s like to be tax-producers rather than tax-consumers.
  4. Privatise: sell government assets, get them into private hands where they can make profits, innovate, pay taxes, compete. The money can go to pay off debt, pay off redundant bureaucrats, and further reduce taxes.
  5. Get rid of thousands of tax-consuming bureaucrats and let them find work, real productive work, in the private sector. Many of them have never had a proper job in their lives so it will be a shock. But they will learn.

It’s so simple! And it ain’t politically easy, so it probably won’t happen; too hard for populist politicians.

Australia is currently enjoying good prosperity thanks to abundant resources, a productive educated workforce and a culture that is mostly honest and fair. It is no thanks to silly politicians whose only goal is to get elected. But these prosperous areas will some time slow down — they always do — and then we will need the above policies. If we had them now the slow-down may be indefinitely postponed; but that would be too much to expect.

(in order of appearance on Economics.org.au)
  1. Welcome from Neville Kennard
  2. Think Tanks Don't Work
  3. "Market Failure": Just what the government ordered!
  4. The Tragedy of the Tax Pool Commons
  5. Corporate Welfare
  6. Citizenship for Sale?
  7. I Don't Vote
  8. Voting: Right or Privilege?
  9. Stockholm Syndrome and our Love-Hate Relationship with Government
  10. Civil Disobedience: The Rules of Engagement
  11. Should Respect for Law Extend to Bad Laws?
  12. Jaywalking as a Demonstration of Individuality
  13. Government Likes War
  14. Collusion is Our Right
  15. Why Not the Drug Olympics?
  16. Unconventional Wisdom
  17. Tiger Farming: An Alternative to Extinction
  18. Looking Backwards: Mont Pelerin Society Conference, Sydney, 2010
  19. Tax Avoidance is a Patriotic Duty
  20. Kennard Writes to IPA Review Editor
  21. Genocide by Welfare: A Tragedy from the Aboriginal Welfare Industry
  22. Separating Sport and State
  23. Your Home is Not an Investment
  24. Dick Smith, Celebrity Philanthropist
  25. A Libertarian's New Year's Resolution
  26. Extend Politicians' Holidays to Create Prosperity
  27. Entrepreneurs are Disruptive, and Bureaucrats Hate It
  28. What is a good Australian?
  29. Governments Like Employment But Hate Employers
  30. The Market Failure Industry
  31. Neville Kennard: The Tax Avoidance Imperative
  32. Wot if ...?
  33. The Tribal Chief and the Witch Doctor
  34. The Tannehills
  35. Democracy versus Property Rights and Prosperity
  36. Government Doesn't Work, and That's the Way They Like It
  37. Minarchy vs Anarchy
  38. Euthanasia and Self-Ownership
  39. The Right Policies to Fix a Depression
  40. Is Howard Our Best PM?
  41. Tax Producers vs Tax Consumers
  42. Where There's a Queue, There's a Business Opportunity
  43. Authoritarian Freedom
  44. Why Classical Liberals Should Debate Anarchocapitalists
  45. The Tyranny of the Majority
  46. If you could choose to whom you paid your tax
  47. Business Should Exploit Boat People
  48. The Immorality of Trade Unions
  49. "America" vs "The United States"
  50. Sweet Anarchy
  51. The Illusion of "Job Creation"
  52. Gold Is Money
  53. Guilty Capitalists
  54. Bureauphobia
  55. Prosperity vs Growth
  56. Capitalism vs Democracy
  57. More people = More fun
  58. Self-Ownership - the very idea!
  59. Government will murder Neville Kennard if he doesn't back away
  60. The Australian Dollar Has Been Cowardly and Criminally Devalued, Harming the Poor Particularly
  61. Is Taxation Theft and Government a Tax Cheat?
  62. My Journey to Anarchy:
    From political and economic agnostic to anarchocapitalist
  63. Government Needs Bad Guys –
    that's why they like wars
  64. What Is Obscene?
  65. Traffic Economics
  66. Wayne Swan stands on the shoulders of other intellectual pygmies
  67. Neville Kennard Obituary
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