Should the Government Pay Its Debts?

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I don’t want it to seem like I think of Bleeding Heart Libertarians as a punching bag. I think they often make interesting points and bring challenges to mainstream libertarianism that its adherents need to be able to grapple with. They also often make for interesting discussion.

An article I would like to discuss today is that of Andrew Cohen’s, called “Shutting Down.” Cohen makes the argument that the government should uphold its contracts to pay those it owes. He puts aside the idea that “taxation is theft” and starts with the premise that if harm prevention and rectification are legitimate functions of government, then taxation is necessary.

He compares government to an individual:

Agent A makes a contract with agent B, agreeing to pay B $X. A overspends and has difficulty paying B. A decides not to pay B. In many cases, we would say this is unacceptable and that A must pay B what is owed. At least, we think, A must go through the proper channels to declare bankruptcy if A is to not pay B what A owes B. This would be unfortunate, we are told, but bankruptcy law is needed to allow for the proper running of the economy.

Today, the U.S. government is agent A.

He goes on:

People who were promised paychecks will not get them. Some will get them late. Some will get smaller paychecks (due to furlough time). Some of these people will face tremendous difficulty. I think it fair to say they will be harmed–having planned their lives given the promise of a regular paycheck, they have legitimate expectations that are being set back. Perhaps the government should not have hired those people in the first place (after all, they are “non-essential” personnel!). But the fact is they were hired and treating them this way is wrong and makes a mockery of contract.

Cohen admits that most of what the government considers “essential” and therefore won’t be affected by the shutdown has little to do with harm prevention or rectification. I feel like that fact makes it so that the government is unjustified in taxing people to pay these debts, since the government is going beyond Cohen’s role for government. Clearly, if taxation is not theft if it pays for legitimate government functions, it ought to be considered theft if it pays for something outside legitimate functions.

But, for Cohen, even criminal enterprises ought to honor their contracts:

Put the point this way: a mobster might be wrong to extract protection money from a business, but that does not make it any less wrong for the mobster to fail to protect that business in time of need. We don’t say “wait, the mobster doesn’t have to live up to its agreement because it was wrong to make the agreement in the first place.” I think most of us think 2 things: (a) the mobster should not have extracted the protection money in the first place and (b) the mobster owes the business protection. Similarly, I think the government should not have hired people to do non-essential jobs (by which I mean any jobs not needed for harm prevention and rectification) in the first place but that because it did, the government* owes those people their salaries on the regular pay days.

I find this to be a tragically poor analogy. The protection money is involuntarily coming from a business (analogous to tax revenue) and the mobster ought to protect that business in exchange (but is that really analogous to what the federal government uses its money to do?). What if that tax revenue is to pay a federal employee for something nobody would voluntarily pay for, such as an NSA employee spying on the American people or a drone operator killing children overseas? A more accurate analogy would then be the mobster paying his hitmen for the contracts he made with them. Honestly, I am more than fine with NSA agents and drone operators not being paid.

Most would agree that people should pay their debts, but they wouldn’t approve of someone stealing from others in order to be able to do so. Even if we assume the idea that taxation is not theft, so much of what the federal government does has nothing to do with Cohen’s defined role for government (indeed, if we consider the US Constitution to be the federal government’s contract with the states regarding its role, it must honor that contract before it has any obligation to pay for employees whose jobs explicitly violate it). Thus,  Cohen’s point is rendered moot: in reality, the employees having delayed, reduced, or even no paychecks do not serve Cohen’s role for legitimate government functions. Even if government ought to honor its contracts with them, that does not give it the right to tax others to pay for its debts. Otherwise, the government is not limited in its powers.

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