Morons And Ignoramuses

29 November 2003

Free markets according to Republicans

by Craig J. Cantoni

U.S. Representative Trent Franks (R-AZ) was one of the conservative holdouts on the Medicare bill who ended up voting yes after being pressured by President Bush and other Republicans. On a radio show with me after the vote, he tried to justify his vote by saying, among other things, that the bill’s provision for Health Savings Accounts is a free-market innovation.

Congressman Franks and other Republicans have a strange definition of ”free market.” Of course, Democrats have always been clueless.

HSAs are about as ”free market” as industry was in the Third Reich. When Hitler was asked why he didn’t nationalize German industry, he replied that he didn’t have to, because he controlled the industrialists. Similarly, HSAs will be controlled by the government.

The government is pretending to be benevolent and munificent by allowing citizens to save a portion of their income on a tax-free basis for their future health care expenses. In reality, Uncle Sam is confiscating our income and our savings in taxes and then letting us have a little of our money back. It’s akin to an armed robber who takes your wallet, watch and car, and then decides to let you keep the watch. Only a moron would say, ”Thank you, generous thief, for giving me such a nice watch.” And only an economics ignoramus would call such an exchange a free market.

Sadly, there are a lot of morons and ignoramuses in America, thanks to government schools, which are not about to teach students about free markets, economics and how the government deceives the public into thinking that it is giving them something when it returns a small part of what it takes.

Income is taxed twice in America—once when earned and once again when saved. And those who live below their means and save money are penalized in other ways. Because of progressive taxation, entitlements and other forms of income redistribution, they are forced to support those who live beyond their means and don’t save money. The construction worker who buys a Hyundai every 10 years ends up having his savings taken by the government and given to the construction worker who buys a fancy extended-cab pickup truck every two years. Democrats call this social justice. Republicans call this free markets. I call it stealing.

When there was a lot less government stealing in the early 20th century, there was a lot more saving. And because there was a lot more saving, a lot more capital was available for investments in industry, jobs and productivity improvements—in the things that grow and economy and improve the standard of living.

Today, we have a disincentive to save because the government taxes the hell out of savings. Worse, we have become so morally bankrupt that we are taxing children who don’t vote and are not of working age. For example, we are sending a $20 trillion bill for today’s entitlements to future generations.

Merry Christmas, kids.

Chew on these numbers: If the projected revenue shortfalls in Social Security and Medicare were paid off today, the government would have to seize half the nation’s household wealth or increase the payroll tax to 22.4 percent. Of course, we’re not going to pay off the shortfalls today. Instead, we’re going to send the shortfalls to our kids and turn them into indentured servants of the state.

Shame on us.

Many Republicans favor HSAs and their tax-code cousin, 401(k) plans, because many Republicans are CPAs, tax attorneys, benefits consultants, stock brokers, financial advisors and human resources managers. Instead of doing productive work that grows the economy and closes our trade deficit, they will make money from deciphering HSA regulations, just as they have earned a nice income from deciphering 401(k) legislation.

The following is an example of what the six-figure-income decipherers will be deciphering in the HSA legislation:

”(h) EXCEPTION FROM CAPITALIZATION OF POLICY ACQUISITION EXPENSES.—Subparagraph (B) of section 848(e)(1) of such Code (defining specified insurance contract) is amended by striking ”and” at the end of clause (iii), by striking the period at the end of clause (iv) and inserting ”, and”, and by adding at the end the following new clause: (v) any contract which is a health savings account (as defined in section 223(d)).”

Incidentally, the legislation will follow you to the grave. For example:

”(I) REDUCTION OF INCLUSION FOR PREDEATH EXPENSES.—The amount includible in gross income under clause (i) by any person (other than the estate) shall be reduced by the amount of qualified medical expenses which were incurred by the decedent before the date of the decedent’s death and paid by such person within 1 year after such date.”

Congressman Franks and others don’t seem to realize is that all of this gibberish, and all of the leeches who feed off the gibberish, would go away if the government would stop taxing people’s savings and start letting them invest their own money as they see fit for their old age. That, Congressman Franks, is not only a free market but also a free country.

I still put the Stars and Stripes in front of my house and am proud of serving my country as a Vietnam-era artillery officer. But my patriotism is for the America of yesteryear, not for the nation of thieves that it has become today.

It is time for lovers of liberty to read the first page of the Declaration of Independence, the page that says what people should do when ”any Form of Government becomes destructive” to liberty. Hint: It does not say to vote for Health Savings Accounts.

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Mr. Cantoni is an author, columnist and founder of Honest Americans Against Legal Theft (HAALT). He can be reached at

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