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Show June 9, 1972 veals the sorry condition of the Revenue Sharing Paul L. Poirot The story is told of an American Rudyard Kipling described the political process of revenue sharing somewhat more poetically and profoundly: newsman discussing matters with his counterpart from Moscow. As I understand it said the American, the basic idea of communism is to divide everything with your neighbor. Not quite came the rejoinder. The basic idea is to make your neighbor divide everything with you. Revenue sharing Federal Treasury. Instead of an alleged overflow of tax receipts to be shared, the Federal debt has shown an increase in every one of the past twenty years, $114 billion greater in 1970 than in 1950. So where is the Federal tax revenue that presumably is to be shared state and local with debt-ridd- en governments? Incidentally, the total indebtedness of all state and local governments in the United States also has risen by some $114 billion over the past twenty years but not because they have been getting In the Carboniferous Epoch we were promised abundance for all, By robbing selected Peter to pay for collective Paul; But, though we had plenty of money, there was nothing our money could buy. And the Gods of the Copybook Headings said, If you dont work you die. is something In those lines, Kipling very nearly said it all. Our Federal government can and does indeed create money at a pace that exceeds the capacity of individuals to supply goods and services in the market place. State and local governments resemble individuals in the sense that they are unable to create new money at will ; but they resemble the Federal government in promising abundance for all. Hence, the inordinate growth of the public sector, which rather consistently between the Civil War and World War I took about 9 cents from each dollar of the peoples earnings and today takes 43 cents of each dollar earned. In other words, government at all levels in the United States is now drawing out of the market place 43 per cent of available goods and services, leaving plenty of money in the private sector but relatively less to buy. like that meaning different things to different people. In proposing to Congress early in 1971 a $5 billion program of General Revenue Sharing, President Nixon described it as a measure to restore the confidence of the people in the capacities of their government. I believe the way to begin this work is by taking bold measures to strengthen state and local governments by providing them with new sources of revenue and a new sense of responsibility. The program presumably should correct a fiscal mismatch: Federal tax receipts, based largely on the income tax, allegedly grow faster than the economy; at the local level the reverse is said to be true; state and local revenues, based largely on sales and property taxes, do not keep pace with economic growth, while expenditure requirements for education, health, welfare, and other local services tend to exceed such An Empty Federal Treasury growth. A sober look at the record re-- 15' TIUVEL IBIILED THE SPORTSMAN'S CHOICE relatively smaller shares of total tax receipts. On the contrary, state and local tax receipts have been increasing more rapidly than have Federal tax receipts since 1950. And taxes at all levels have been biting ever more deeply into the taxpayers total earnings. In light of these sorry facts, it should be clear that the proposal for Federal revenue sharing is simply a prediction of further inflation. The Federal government will monetize its deficit, through the centralized, fractional-reserv- e banking Bystem, and give some of the newly printed money to state and local governments. Unfortunately, the printing of additional quantities of money does not increase the supplies of goods and services that consumers want. It simply enables the Federal government and its e-sharing counterparts down, the line to draw an increasing proportion of goods and services out of the market place, for distribution and use according to bureaucratic decision rather than individual choice. It may be argued, of course, that it should be no great concern of the individual whether he buys groceries with food stamps or with his own earnings so long as he eats; whether his rent is paid by other taxpayers or by himself so long as he is housed; whether his medical care comes socialized or private so long as he gets the care;. and so on and on. And that would be a powerful argument, if revenu- resources were inexhaustably abundant and sharing the wealth were the only problem. The UTAH INDEPENDENT The Scarcity of Resources Relative to Human Wants That is not the only problem, however. It isnt even close to the real problem. Kipling came closer: you don't work you die ." The perennial problem past, present, and future is the scarcity of resources relative to human wants. And the solution is through effl--' cient production and use of goods and services. Whether it is called revenue sharing or inflation or communism or public-sectspending or withwhatever governmental drawal of goods and services from the market tends to be wasteful of scarce resources. It is strictly a consuming process, whether it be a war against communism in foreign lands or a domestic war against crime, smut, poverty, disease, pollution, slum conditions, or other social problems. Warlike or coercive force tends to be wasteful in any event, and especially or when the coercion is used to do what otherwise would have been done voluntarily. Besides the consumption and waste of resources characteristic of government spending, this draining of resources from the private sector of the market leaves ever less available for saving and investment in the tools of capitalistic enterprise. And this loss of the tools and even the incentive to produce is what brings a people to the fate Kipyou don't work ling foresaw: you die.' tax-burden- ed The Decline of Morality Meanwhile, the steady attrition of resources and incentives wean away the morality of individtiab and destroys their csssaof C3& responsibility. This breakdown tends to spread throughout the society. The private counterpart of governmental revenue sharing was described by staff reporter Richard Martin in The Wall Street Journal of February 9, 1971: Nobody can be sure how much money employee thefts are costing companies annually, but insurance men and security specialists say the best guesses range upwards from $400 million a year. The basic idea of revenue sharing is to make your neighbor divide everything with you. But this dirty neighbor game always ends the same : "If you don't work you die." Reprinted from The Freeman, April 1971. PATRONIZE our advertisers & At (M VBA0HI1RS JUST OFF RIVERDALE RD. ON 399-96- 44 700 WEST, OGDEN tell them you saw it in the UTAH INDEPENDENT i i i COMPLETE WITH STOVE, ICEBOX, BUTANE TANK AND HEATER Page 5 kJ) I LET US PLAN YOUr STORAGE SUPPLY I Christtisiis I Frail, Storage Sippl, YOUR FOOD STORAGE j I I SPECIALISTS 706 COLUMBIA LANE PROVO. UTAH 84601 (801) 3734115 I |