The Policymaker’s Trilemma | Increas Spending, Reduce Debt, Lower Taxes
Policymakers face three immediate challenges:
- meet increased spending needs
- contain a pronounced increase in public debt
- mobilize more tax revenues
First, I want to get this out of the way: taxes are going to be collected one way or another, even if the system is “tax-free” it will not be free of the fees or implicit costs which will be their replacement. Even if taxes were to be lowered to near-zero levels, or total non-compliance, it will impact spending needs and national debts. Basic economics.
It is an incredibly difficult balancing act, as efforts to address one element will inevitably come at the expense of the other two.
My question to you all is as follows:
Capitalism, Socialism, or Communism, none can adequately and sustainably handle the fundamental question adequately; “with infinite demand and limited supply, how do we best ensure distribution of resources?”
How best do you think policymakers can ensure that the threshold of abject poverty remains as minimal as possible while also granting sustainable opportunity for economic mobility?
If you were a policymaker, in what order of importance would you place spending, debt, and tax to ensuring sustainability, prospertity, and economic freedoms? and why?
My answer would be:
- Spending. With controlled spending, and a system for accountability, there would be less of a need for increased taxes.
- Taxes. With a low flat non-siloed tax rate, there would be less hesitancy for compliance; so long as quality of services rendered are percieved to be at an adequate level.
- Debt. With the lowered spending and low flat non-siloed tax rate, there still leaves a lot of room for flexibility. Paying of debt is important, but not more than having the ability to pay it off. With the ability to pay off debt, one can simply use it as economic leverage. In short, if you owe someone, they have to kiss your a*s until you pay it back—but if they owe you, and you have bills to pay, you’re screwed.
Article from r/Libertarian: For a Free Society