Gary Johnson, The Fair Tax, and a Balanced Budget

Since Gary Johnson was allowed to participate in the last debate that was hosted by Fox News, I figured I would comment on a few things he said, since he has gained a little bit of attention.

Johnson's best line and the funniest line of the debate was when he said his neighbor's dogs have created more shovel-ready jobs than Obama.  He obviously had this line ready to go before the debate, but it got a good laugh and that can sometimes draw attention.

While I personally like Ron Paul's version of libertarianism far better than Johnson's, it is still good for libertarianism when he is in the debates.  Sometimes his comments can enhance the message being sent by Paul.  If Paul weren't in this race, Gary Johnson would be by far the best candidate on foreign policy, social policy, and fiscal issues.

One thing that Johnson said several times during the debate was that he had a plan to balance the budget and he wanted to institute the Fair Tax.  As a libertarian, I am against the Fair Tax and I am against a lot of the versions out there for a balanced budget amendment.  However, when you combine the two ideas into one, then they are not as bad.

The worst thing about the Fair Tax is that it is "revenue neutral".  In order to be revenue neutral, we would need a national sales tax of around 30%.  While I don't like the complications of filling out income tax forms, that is not the really bad part of having an income tax and all of the other taxes we pay.  The really bad part is that it takes way too much money from us and the Fair Tax doesn't help this situation at all if you don't address spending with it.

If we had a balanced budget by cutting spending in the neighborhood of $1.5 trillion per year, then we still might need a national sales tax of 30% to pay the bills.  But at least it would neutralize the Fed as there would be no need for the Fed to buy any more government debt.  This would help the economy tremendously.

The reason I get skeptical of a balanced budget amendment is because a lot of people want to balance the budget with tax increases.  To paraphrase Ron Paul, I would rather see an unbalanced budget of $2 trillion than a balanced budget of $4 trillion.  But I am certainly in favor a balanced budget if it means getting there by dramatically cutting spending and not raising any taxes.

I am still hesitant on the Fair Tax, even with a big cut of 43% as Johnson is suggesting.  I might be more prone to liking it if it meant a national sales tax of 10% or less.  That would only be acceptable with the repeal of the 16th Amendment.

I think Johnson should stick with his cheerleading of a balanced budget through a 43% reduction in spending.  He should drop the Fair Tax.  Ron Paul should take a lesson from this and come out with his own plan to balance the budget.  In fact, he should one-up Johnson and get the federal budget below $2 trillion and advocate tax cuts along with a balanced budget.  He should start being more specific.

Next, the two of them should team up on the other candidates.  Michele Bachmann says she wants a balanced budget, but I have no idea how she is going to get there without cuts in military spending.  She should be challenged.  Herman Cain and Rick Perry should be challenged too.  Ask them how, specifically, they would balance the budget.  How would you cut $1.5 trillion out of the budget this year?  Not next year or ten years from now, but right now.

If the moderators of these debates and the mainstream media won't ask these tough questions, then Ron Paul and Gary Johnson should start asking them.  Unless you cut military spending significantly, which means ending the wars, then it is almost impossible to balance the federal budget, unless you want to start cutting Social Security payments.  Bachmann, Perry, and Cain should be pinned down.  We shouldn't bother with Romney as he is out in left field.