Even without a debt default, it looks increasingly possible that the world’s credit rating agencies will soon downgrade U.S. debt from the AAA standing it has enjoyed for decades.

A downgrade isn’t catastrophic because global financial markets decide the creditworthiness of U.S. securities, not Moody’s and Standard & Poor’s. The good news is that investors still regard Treasury bonds, which carry the full faith and credit of the U.S. government, as a near zero-risk investment. But a downgrade will raise the cost of credit, especially for states and institutions whose debt is pegged to Treasurys. Above all a downgrade is a symbol of fiscal mismanagement and an omen of worse to come if we continue the same habits.

The rest of the article gives a good summary of how we got here, recounting the road all the way back to FDR. It’s worth a look.

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A wise and frugal government, which shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government.

He also stated it well in the Declaration of Independence:

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. — That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed [emphasis added].

Freedom is not simply a good idea, but stems from the nature of people, who are created in the image of God and thus ought to be free. Freedom is a right, not a privilege granted by the government.

As a result, the primary way to evaluate any policy is to first ask: Does this policy increase or decrease individual freedom? Policies that tend to decrease freedom will not just tend to get bad results. Rather, they are also contrary to the fundamental purpose of government.

And it is the same with candidates. A good question to ask about the candidates as we go to the polls is: Is this candidate generally for policies that increase individual freedom or policies that increase government control?

In other words, we need to think not only about specific issues, but also about the overall philosophies and principles that govern those who are running for office — and thus the positions they will take on not only current but also upcoming issues. The candidates who will lead best are those whose own political philosophy is in line with the purpose of government itself: to preserve and uphold freedom to the greatest possible extent.

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A wise and frugal government, which shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government.

The core principle of wise governing is very, very simple and very, very clear.

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That’s the point made by two fantastic pieces in the Wall Street Journal from last month on Nov 9 (the day the Berlin Wall fell). I highly recommend them. I’m mentioning them now because they are relevant beyond simply the anniversary of that date. For woven throughout them are some of the core principles that are at the center of any sound theory of government. The pieces are:

• Why the Berlin Wall Fell
• Four Little Words

Here are a few key excerpts from the articles, which I’ve categorized underneath headings that state some of these core principles:

1. The biggest threat to freedom is not military aggression, but moral ambiguity and sophistry.

The reason for this is that moral ambiguity serves as a mechanism to cloak the practices and principles that oppress people. In the twentieth century, this resulted in the enslavement and death of millions. Without moral clarity, you will not have action and people will not organize together.

(That’s not a quote from the articles, but that’s the underlying theme, and that’s how I would say it.)

2. You do not follow the principles of “how to win friends and influence people” with criminal regimes. They are different.

Reagan had the carefully arrived at view that criminal regimes were different, that their whole way of looking at the world was inverted, that they saw acts of conciliation as weakness, and that rather than making nice in return they felt an inner compulsion to exploit this perceived weakness by engaging in more acts of aggression. All this confirmed the criminal mind’s abiding conviction in its own omniscience and sovereignty, and its right to rule and victimize others.

3. The most powerful weapon against criminal regimes is publicly spoken moral clarity.

Accordingly, Reagan spoke formally and repeatedly of deploying against criminal regimes the one weapon they fear more than military or economic sanction: the publicly-spoken truth about their moral absurdity, their ontological weakness.

This was the sort of moral confrontation, as countless dissidents and resisters have noted, that makes these regimes conciliatory, precisely because it heartens those whom they fear most—their own oppressed people. Reagan’s understanding that rhetorical confrontation causes geopolitical conciliation led in no small part to the wall’s collapse 20 years ago today.

4. There are often opponents to moral clarity from within our own walls — including people with a narrowly pragmatic view of the world and people who simply should know better.

Yet it bears recalling that even these obvious political facts were obscure to many people who lived in freedom and should have known better. “Despite what many Americans think, most Soviets do not yearn for capitalism or Western-style democracy,” said CBS’s Dan Rather just two years before the Wall fell. And when Reagan delivered his historic speech in Berlin calling on Mr. Gorbachev to “tear down this wall,” he did so after being warned by some of his senior advisers that the language was “unpresidential,” and after thousands of protesters had marched through West Berlin in opposition. [Which, of course, takes us back to point 1.]

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Here’s a great quote:

As it stands today, Congress is considering legislation that would substantially change the way health care in America is paid for and delivered. And regardless of how one feels about that, one thing is certain: members of Congress won’t have to participate in it. The bill expressly states that they are exempt, and as we know, they have a much better, richer plan.

Regardless of whether you’re a man or a woman, a liberal or a conservative, a teenager or a senior citizen, this just doesn’t make any sense. It gives one the impression that politicians are masters of the people rather than public servants, and that they see themselves as being more important than the people they are supposed to represent. Otherwise, why would they choose to exempt themselves but not firefighters or teachers or police officers or doctors?

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This is a fantastic visualization of how the deficit spending projected by Obama compares to past presidencies.

Really incredible. This video converts the deficit spending since 1900 into miles per hour. Bush was going 63 mph, the fastest yet. Obama’s own projections put him at 173 mph for the next eight years.

The video is well worth watching.

(HT: Steve Orris)

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The Two Best Paragraphs in the Declaration
The first two paragraphs in the document give you an entire philosophy of government in themselves:

When in the Course of human events it becomes necessary for one people to dissolve the political bands which have connected them with another and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature’s God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. — That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, — That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.

Fundamental Principles of Government from the Declaration
A few of the principles of government that we see here are:

1. All people are created equal.
2. Therefore all people have certain unalienable rights. Chief among these rights are life, liberty, the pursuit of happiness, and the ability to own property (not stated here, but in the original draft).
3. These rights are given by God.
4. Therefore, our rights are not “privileges” granted or controlled by the government. They exist prior to and apart from the government, and the government must respect them.
5. Therefore, government exists for the sake of the people, not the people for the sake of the government. Government does not have a right to lord it over the people.
6. Instead, government exists to preserve and protect these rights. Government is not ultimately about control.
7. The government cannot do anything it chooses. There are certain things that are wrong for a government to do, even apart from impressively stated arguments for their pragmatic value.
8. The rights of the people are more important than the desires of the government.
9. Government derives its powers from the consent of the governed; the people do not derive their rights from the will or choice of the government.
10. People have the right to abolish their government when it becomes destructive of these ends.

This is simply radical. Really, we should be stunned and immensely grateful that our society came to recognize these truths. In a world where so many people seek after power, it is incredible that a government should come to exist which acknowledges that the power of government is not ultimate.

The Single Governing Principle of Government
We can roll all of these principles up into a single, governing principle of human government: the purpose of government is to protect and maximize the freedom of the people. And people have this freedom because they are all created equal (so people in government are not “more equal” than the private citizen — even when they are working for the “collective good”) and endowed with intrinsic rights that they hold simply by virtue of being human.

In order for government to accomplish this purpose, there are two necessary implications, both of which are embodied in our Constitution:

1. Limited government.
2. Separation of powers.

What True Liberalism Is
The principles embodied in the Declaration of Independence, by the way, are what “liberalism” really is. Today the term “liberal” is used to refer to policies that seek to expand the place of government and give it a greater role in people’s lives. That’s not liberal — that’s conservative.

It’s conservative because it seeks to conserve the way the world functioned for thousands of years before the American Revolution — namely, a world where government saw its power as ultimate, rather than the God-given rights of the people as prior to the power of government.

What today is called “conservatism,” on the other hand, actually used to be called political liberalism because it advocated for change from the government-first ideology that dominated for almost all of human history before that. It advocated for the principles that we see outlined in the Declaration. That’s why on my Facebook profile I put my political views as classical liberalism.

By the way, you can read the whole Declaration of Independence here.

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People who say that we should learn from other countries seem to have in mind that we should imitate those countries. But some of the most valuable lessons from other countries can be had from seeing the disasters their policies have produced– especially when our own intelligentsia are pushing ideas that have already been tried and failed elsewhere.

Here’s one example:

A British homeowner who held two burglars at gunpoint until the police arrived was arrested– even though the gun he used turned out to be just a realistic-looking toy gun. The British intelligentsia take guns much more seriously than they take burglary, even when it is only a toy gun that is used to “intimidate” a burglar, as they put it.

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The problem is that it is impossible to measure the number of jobs “saved.” Economist Gregory Mankiw calls this an “unmeasurable metric.” Agencies like the Labor Department and Bureau of Labor Statistics measure the number of jobs lost or created, but none of them track the number of jobs “saved” because there is no way to know.

Which means that talking in terms of “jobs saved” creates a very convenient situation for Obama:

“You created a situation where you cannot be wrong,” said the Montana Democrat. “If the economy loses two million jobs over the next few years, you can say yes, but it would’ve lost 5.5 million jobs. If we create a million jobs, you can say, well, it would have lost 2.5 million jobs. You’ve given yourself complete leverage where you cannot be wrong, because you can take any scenario and make yourself look correct.”

Now, something’s wrong when the president invokes a formula that makes it impossible for him to be wrong and it goes largely unchallenged. It’s true that almost any government spending will create some jobs and save others. But as Milton Friedman once pointed out, that doesn’t tell you much: The government, after all, can create jobs by hiring people to dig holes and fill them in.

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Here’s what the President hopes nobody realizes: Raising taxes has consequences for everyone – and most of them are bad.

Yet another example:  If the Obama tax plan goes through, Microsoft intends to move some of its jobs out of this country.

Yesterday, I wrote about the ugly unintended consequences for regular Americans of the liberal love affair with “taxing the rich.”

Today, Microsoft has offered us a lesson on what it means for regular Americans when liberals try to “tax corporations.”

Whether or not they know it, when the government raises taxes “just” on “corporations” or “the rich,” everyone ends up paying.  Everyone.

(HT: JT)

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Recently, he has started The Simple Wisdom Project, which is intended to be “a source of perspective and common sense about topics relating to family, faith, and life’s daily challenges.”

His latest monthly article discusses socialism. He writes it in response to a reader who “wanted to understand why socialism is a bad thing, especially in the context of the Christian commandments to love thy neighbor, care for the poor and avoid materialism.”

The short article is well worth your read. Here are a few key excerpts.

Socialism doesn’t work:

First, it just doesn’t work. At least not for very long. That’s because people are flawed and, outside of a family, a religious order, or a small group of friends, they will not continually work hard for the ‘greater good’ if they do not receive the fruits of that work themselves. As an economics major in college, I learned that this theory had a name: ‘the free-loader effect’. It is the natural tendency of people to do less and less work when they realize that they won’t see a proportionate increase in what they can get for it.

Over time—and this is an inevitable consequence of the free-loader effect—socialist societies experience decreasing productivity, risk-taking, and innovation, along with increasing tax rates, promises of government programs, and expectations from citizens about what they can get from those programs. When the economy inevitably falters under its own weight, those expectations cannot be met.

Socialism diminishes the dignity of human beings:

The second reason why I believe socialism is such a bad idea is very much related to the first, but much more important to me as a Christian: it diminishes the dignity of human beings. In socialist societies, individuals grow increasingly dependent on the government for their well-being, and less and less confident that they are capable of and responsible for themselves. This is an inevitable recipe for cynicism, fatalism and depression.

Socialism advances through a subtle, “slow creep”:

… socialism does not usually spring up over night. Instead, it creeps. Little by little we grow accustomed to new and higher taxes (“it’s just a one percent increase in the sales tax”), more government programs (“how can I vote against free ‘fill-in-the-blank” for children?”), and the false lure of getting something for nothing.

What should we do if we really want to be compassionate and make a difference?

So what are we to do if we want to act on our desire to do good and make a difference? Work hard. Create jobs. Treat our employees with dignity and love. Give generously of our money and our time to good charities and directly to those in need. And demand that our government compassionately provide effective programs and services for those who are truly incapable of providing for themselves.

But we should never, ever, support a program, a tax or a proposal that makes us feel good but ends up making the lives of the people we are supposed to be helping, and the society in which they live, more difficult and dependent.

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The quote is from a very enjoyable and helpful interview in general with Reagan that I just came across (from 1975). I would recommend reading the whole thing.

Here’s the quote I’m referring to:

If people need any more concrete explanation of this, start with the staff of life, a loaf of bread. The simplest thing; the poorest man must have it. Well, there are 151 taxes now in the price of a loaf of bread — it accounts for more than half the cost of a loaf of bread. It begins with the first tax, on the farmer that raised the wheat. Any simpleton can understand that if that farmer cannot get enough money for his wheat, to pay the property tax on his farm, he can’t be a farmer. He loses his farm. And so it is with the fellow who pays a driver’s license and a gasoline tax to drive the truckload of wheat to the mill, the miller who has to pay everything from social security tax, business license, everything else. He has to make his living over and above those costs. So they all wind up in that loaf of bread. Now an egg isn’t far behind and nobody had to make that. There’s a hundred taxes in an egg by the time it gets to market and you know the chicken didn’t put them there!

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