Saturday, January 25, 2014

No country has ever Rush-Limbaugh-quoted its way to prosperity.

A long time ago, on a planet far (but not far enough) away, an American shock-jock intoned:

"No nation has ever taxed itself into prosperity."
Rush Limbaugh, radio broadcast, 18th February 1994

Over the years, this line became a favourite of American conservatives who wanted to demonstrate how they could combine their love of simplistic one-liners with their economic ignorance.

Eighteen years later, an Australian politician with a love of simplistic one-liners decided to revive it (with minor modifications). But it was no longer a shock-jock's zinger. Oh no, it was now the iron law of economics:

"The government has completely failed to appreciate the iron law of economics that no country has ever taxed its way to prosperity."
Tony Abbott, address to the National Press Club, 31st January 2012 (2:26 to 2:38 in the video below.)

Nearly two years later, after the Australian electorate had expressed its preference for simplistic one-liners over well-thought-through policy by electing a government led by Mr Abbott, we got this from our new Treasurer:

"One thing is for sure, no country has ever taxed its way to prosperity."
Joe Hockey, address to the National Press Club, 17th December 2013. Video here. (Go to 7:15.)

Same line, different bobblehead.

It's a great line, isn't it? So great, in fact, that our beloathed Prime Minister had to share it, re-paraphrased, with the world:

"No country has ever taxed or subsidised its way to prosperity."
Tony Abbott, address to the World Economic Forum, 23rd January 2014. (5:05 to 5:13 in the video
at this link.)

So, Tony Abbott paraphrased some nonsense spouted by an American radio demagogue twenty years ago. He has 'borrowed' glib one-liners at other times. (Remember "axe the tax" from the 2013 election campaign? That was 'borrowed' from the Canadian New Democratic Party's campaign during the British Columbia provincial election in 2009.) What's the problem? Well, there are two that instantly spring to mind.

The first problem can be summarised in two words: Tea Party. Specifically, I'm concerned about their small-government-for-small-government's-sake thinking that is creeping into Australian politics.

Limbaugh is a favourite of theirs. So are the American climate-change-denier politicians Jim Sensenbrenner and James Inhofe. Senator Bernardi consulted with them in 2009, looking for strategy ideas for his campaign against Australia's carbon-pricing scheme. (And now, the "tax" is due to be "axed"...)

More recently in 2011, Senator Cormann, who is now our Finance Minister, met with representatives of FreedomWorks, the Tea Party "grassroots" organisation founded by one of the Koch brothers. His brief for the trip was to ''explore United States economic, fiscal and monetary policy". (And not with a view to convincing himself to run away as fast as possible from the American madness which demands that big-government services be financed by small-government taxes, it seems.)

The second problem is: it's simply not true.

You take a car trip on a well-constructed road without having to stop every couple of hours to pay a toll. You pack your kids off to school without first paying $10,000 per head to the school for their tuition. You get seriously ill, go to hospital for several months, and don't come home to a bill which will bankrupt you.

Every time one of these things doesn't happen, it's a reminder that you are living in a country which has taxed its way to prosperity. (Note to any foreigners who may stumble upon this article: I'm talking specifically about Australia.)

The point to note is that our government didn't provide these things because it's Santa Claus. It provided them because it was economically efficient to do so. This is so obvious that at least one high-profile American politician understands it:

"Ask for the wealthy to pay a little bit more." In a sane world that would trump "no nation has ever taxed itself into prosperity" every time. But not in Tony Abbott's world, apparently.

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