Though the good news for 2016 was mostly overseas. Here are the four things from around the world that made me happy this year.
- Constitutional spending caps in Brazil – I’m a big believer that good fiscal policy is achieved when government spending grows slower than the private economy. So I was very happy when Brazil changed its constitution to limit spending to the rate of inflation. Brazil joins Hong Kong and Switzerland in an elite club of jurisdictions with constitutional provisions that focus on the real problem of excessive government rather than the symptom of red ink.
- The landslide vote against a government-guaranteed income in Switzerland – I’m rather worried that there’s a growing movement (including some libertarians!) in support of a minimum income provided by taxpayers. So I was gratified that the “Sensible Swiss,” in a referendum this past May, overwhelmingly rejected an initiative to impose such a policy. I even like to think that perhaps I played a (very minor) role in the outcome.
- The British vote for Brexit – The European Union started as a free-trade zone but in recent decades morphed into a pro-harmonization and pro-centralization bureaucracy, contrary to the principles that made Europe great. That shift, combined with the continent’s horrible demographics, means the European Union is a slowly sinking ship. I was delighted and amused (played Rule Britannia over and over again on my laptop) that Brits voted for independence and (hopefully) liberty.
- Abolition of the income tax in Antigua and Barbuda – It’s a terrible idea (as we know from America’s experience) to give politicians a new source of revenue. They’ll quickly use the new levy to finance a permanent expansion in the burden of government (which is why I’m willing to go halfway around the world to fight such schemes). With that in mind, the repeal of the income tax in the Caribbean nation of Antigua and Barbuda was a truly joyous development.
And while we didn’t have any major positive developments in the United States, there was a bit of good news. Yes, it’s “small-ball tinkering,” but I’m always glad for any progress.
- Reductions in food stamp dependency – There are many redistribution programs that contribute to America’s dependency crisis, so food stamps can’t take the entire blame for the economic damage of the welfare state. But the program is riddled with fraud and should be ended on the federal level. We haven’t seen any progress out of Washington (hardly a surprise since we have a “food stamp President“), but Kansas joined Maine and Wisconsin by taking steps to limit the program’s one-way handouts.
So those are the noteworthy good things that happened this year. Now let’s look at the other side of the ledger. What was the bad news of 2016?
Well, the good news (so to speak) is that there was not a lot of bad news. At least if we’re focusing on actual policy changes.
But there are three developments that cause me to worry about the future.
- Growing support for the value-added tax from Republicans – At the risk of hyperbole, I view the value-added tax as the single-greatest threat to the long-run viability of the United States. Simply stated, our ability to restrain the growth of spending will be terribly weakened if politicians get this new source of revenue. Why would they ever reform entitlements, for instance, if they had the ability boost the VAT rate by a point or two every few years? With that in mind, I’m perplexed and horrified that some otherwise sensible lawmakers (including Rand Paul and Ted Cruz) have embraced this money machine for big government. I don’t care if their plans are theoretically sensible. I worry about what will happen in the real world.
- An erosion of the pro-trade consensus – The economic damage caused by higher fiscal burdens since World War II has been offset by lower trade burdens thanks to various agreements to reduce tariffs and other protectionist barriers. So it’s very good news that there’s been a bipartisan consensus for freer trade. Unfortunately, the unexpected appeal of Donald Trump and Bernie Sanders suggests that both parties have voters susceptible to the siren song of protectionism.
- A major political party almost nominated an out-of-the-closet socialist – It is rather troubling that Senator Bernie Sanders managed to attract considerable support while openly embracing a very strident form of statism. His voting record in the Senate may have been very similar to conventional Democrats (including Hillary Clinton and Barack Obama), but his sympathy for totalitarian regimes such as Venezuela suggests he is genuinely radical. It worries me that millions of my fellow citizens voted for someone with such deep hostility to individual liberty.
Tomorrow I will write about my hopes and fears for 2017.
Let’s close today’s column with a few special categories.
If there was an award for the most disgusting news of 2016, the NAACP would be the clear winner for their decision to sacrifice black children in order to collect blood money from teacher unions.
And if we also had a prize for most moronic leftist in 2016, there would be another easy winner. Trevor Noah inadvertently showed why gun control doesn’t work even though he wanted to make the opposite point.
Last but not least, if there was a category for surprising news in 2016, there’s no question that Paul Krugman would win that prize for writing something sensible about tax policy.