Big Lies in Politics

The fact that so many successful politicians are such shameless liars is not only a reflection on them, it is also a reflection on us. When the people want the impossible, only liars can satisfy them, and only in the short run. The current outbreaks of riots in Europe show what happens when the truth catches up with both the politicians and the people in the long run.

Among the biggest lies of the welfare states on both sides of the Atlantic is the notion that the government can supply the people with things they want but cannot afford. Since the government gets its resources from the people, if the people as a whole cannot afford something, neither can the government.

There is, of course, the perennial fallacy that the government can simply raise taxes on “the rich” and use that additional revenue to pay for things that most people cannot afford. What is amazing is the implicit assumption that “the rich” are all such complete fools that they will do nothing to prevent their money from being taxed away. History shows otherwise.

After the Constitution of the United States was amended to permit a federal income tax, in 1916, the number of people reporting taxable incomes of $300,000 a year or more fell from well over a thousand to fewer than three hundred by 1921.

Were the rich all getting poorer? Not at all. They were investing huge sums of money in tax-exempt securities. The amount of money invested in tax-exempt securities was larger than the federal budget, and nearly half as large as the national debt.

This was not unique to the United States or to that era. After the British government raised their income tax on the top income earners in 2010, they discovered that they collected less tax revenue than before. Other countries have had similar experiences. Apparently the rich are not all fools, after all.

In today’s globalized world economy, the rich can simply invest their money in countries where tax rates are lower.

So, if you cannot rely on “the rich” to pick up the slack, what can you rely on? Lies.

Nothing is easier for a politician than promising government benefits that cannot be delivered.

Pensions such as Social Security are perfect for this role. The promises that are made are for money to be paid many years from now — and somebody else will be in power then, left with the job of figuring out what to say and do when the money runs out and the riots start.

There are all sorts of ways of postponing the day of reckoning. The government can refuse to pay what it costs to get things done. Cutting what doctors are paid for treating Medicare patients is one obvious example.

That of course leads some doctors to refuse to take on new Medicare patients. But this process takes time to really make its full impact felt — and elections are held in the short run. This is another growing problem that can be left for someone else to try to cope with in future years.

Increasing amounts of paperwork for doctors in welfare states with government-run medical care, and reduced payments to those doctors, in order to stave off the day of bankruptcy, mean that the medical profession is likely to attract fewer of the brightest young people who have other occupations available to them — paying more money and having fewer hassles. But this too is a long-run problem — and elections are still held in the short run.

Eventually, all these long-run problems can catch up with the wonderful-sounding lies that are the lifeblood of welfare state politics. But there can be a lot of elections between now and eventually — and those who are good at political lies can win a lot of those elections.

As the day of reckoning approaches, there are a number of ways of seeming to overcome the crisis. If the government is running out of money, it can print more money. That does not make the country any richer, but it quietly transfers part of the value of existing money from people’s savings and income to the government, whose newly printed money is worth just as much as the money that people worked for and saved.

Printing more money means inflation — and inflation is a quiet lie, by which a government can keep its promises on paper, but with money worth much less than when the promises were made.

Is it so surprising voters with unrealistic hopes elect politicians who lie about being able to fulfill those hopes?

  • StephenD

    Excellent article Sir! I just don't understand how we can continue to spend more than we can afford. In my home, though we may often want a steak, we settle for hamburger meat. We can then afford a steak every now and again. Instead of having the steak until there is no more money for either steak or hamburger and we end up hungry. Seems a simple enough lesson to learn doesn't it?

  • WilliamJamesWard

    How can people not lie, morals were taken out of our schools by the highest government court
    and being a liar has no wide and condemning opprobrium, hence people like Bill Clinton.
    Just how far is America down the road to decay and approaching dissolution and anarchy?.
    The question is what will free and moral men do to rectify the situation and when, maybe
    it is to late but it is growing more likely every second and November looms large.

  • Patrick Henry

    Liberty and prosperity are rare phenomena in history because it requires the culture to produce leaders who will strictly limit the governments they create. The culture will renew itself if and only if it learns the hard way that you cannot consume more than you produce; the fat years will be followed by lean years and it will be the feeling of an empty stomach by people accustomed to eating well that will help focus their minds on restoring individual liberty, which in some sense means not being born with an entitlement to other people's hard earned money.

  • Sage on the Stage

    Do you have the right to tax your neighbor for (what you think is) your good idea? This is what I ask liberals all the time; and most of the time, I get no answer. I then ask the question again; mostly, I'll get a polite smile, sometimes I'll get a "yes." I explain that no, you don't; (and no, I don't,either) because that's part of what freedom is.

  • dos

    Politicians should be made accountable, responsible and liable to the results from their decisions.

  • gfmucci

    A nations "leaders" are a reflection of the people who empower them. The people more often than not get what they deserve by their indifference. They fail to have an interest or take an active role in their governance. If we have an ignorant or indifferent electorate, we will have an ignorant or indifferent government. If we have an entitlement minded electorate, we will have a government that provides entitlements. Some nations (e.g. Middle East) are populated by violent people so they will they will get a violent government. Two hundred years ago we had a population of primarily Christian, hard working people who put all their energies into escaping an oppressive government like they had back home. Their new government honored their desires with few laws and few taxes. Not any more. Our government reflects its people because now the government and the entitlement class are partners and are now in control. The rest of us are finding ourselves in a situation similar to those in 1600/1700's England, but with nowhere else to go.

  • Dalgray

    Social welfare or social burglary; the money has to come from somewhere so which is it welfare or burglary? At what point does cash become free of the taint of theft when the elite sanction the imposition of taxes?

    Her Majesty’s government defines theft in Section 1 of the Theft Act 1968 “A person is guilty of theft if he dishonestly appropriates property belonging to another with the intention of permanently depriving the other of it”, taking labor, or the fruits of it, from another is theft or put it another way that old word slavery is it not? So what exactly is taxation?

    The left ignorantly define property as theft so does that mean being a human being in a socialist state is by definition a slave? If you assert proprietary interest over yourself that must be theft…then what? Who exactly owns you?

    The state has to lie and thieve to stay in business how difficult is it to understand Dr. Sowell’s article? Apparently at 20% or so find it impossible to understand how politics really works. The truth is so simple yet beyond some of the supposedly erudite professorial elites.

    The taking classes and the shirking classes expect a November payoff by voting to pick other people’s pockets; its democracy don’t you know! They ken the truth, more likely than not, they just hope the gig won’t be up too soon.