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Mo’ Money: Government greed and the Rockefeller rule

Wednesday March 6th, 2013   •   Posted by K. Lloyd Billingsley at 2:20pm PST   •  

IRSMark Trumbull of DC Decoder notes that, according to the Congressional Budget Office federal tax revenue will hit $2.7 trillion this year, a record that would surpass the $2.6 trillion in 2007, before the recession started. This strengthens the case of those who say the problem must be excessive government spending. But the $2.7 trillion forecast has not changed the mind of those who claim the problem is a lack of revenue.

Trumbull notes that if federal outlays could be trimmed to a 35-year average of 21 percent of GDP, “much of the national-debt problem would be solved.” Trouble is, entitlement programs such as Medicare, Medicaid and Social Security demand an ever-larger share of federal spending, and recipients do not see these programs as the problem. So here’s the “big issue,” according to Trumbull: “There’s no level of tax revenue or federal spending that’s automatically the ‘right’ level. Yesterday’s averages don’t tell us what tomorrow’s should be.” In practice, that means the Rockefeller rule prevails.

Standard Oil founder John D. Rockefeller was the first American billionaire and once the richest man in the world. Asked how much money was enough, he said, “Just a little bit more.” In similar style, the federal government always wants more money from the people, particularly a government that, despite massive debt and lingering recession, is creating vast new entitlements such as Obamacare. The federal government not only declines to remove wasteful and redundant agencies but also starts new ones such as the Consumer Finance Protection Bureau. That’s why the Rockefeller rule prevails, except the government wants a lot more money.

Government greed is fathomless, and inherent in the system. And through withholding the federal government gets workers’ money even before the workers themselves. Milton Friedman helped pioneer this practice, which he thought would be temporary. But as Friedman said, nothing is so permanent as a temporary government program.

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March 2013