Thomas Sowell

Bill Clinton says that the budget surplus cannot be used to reduce taxes because it would "cost" too much. Just what does that mean? It certainly does not mean that the government would have to give up doing something that it is already doing. The very fact that there is a surplus means that tax revenues exceed what the government is spending on everything that it is doing.

If what Clinton really means is that the government would like to expand what it is doing, instead of returning the surplus to the taxpayers, then let him say that -- if he dares -- instead of talking about what a tax cut would "cost." Obviously, every time the government sends you a tax refund of $100, it has "cost" the government $100, if you want to use that kind of meaningless rhetoric.

The other great insult to our intelligence by those who oppose tax cuts is that the money should be left in Washington, to be used to pay down the national debt. Anyone who thinks that you can leave hundreds of billions of dollars in Washington, without the politicians spending it, has a faith which passeth all understanding.

The very idea of government's "costs" is strange. Since government does not generate wealth, but simply spends wealth generated by the people, the only costs being borne are those costs borne by the public. When the public gets part of its own money back, that costs the country nothing.

What we should really be concerned about are the costs created by government. Not all these costs are paid for in taxes. Some are paid for in many other ways. More important, many of the costs created by government are not counted -- and can therefore reach astronomical levels without creating an outcry or a backlash.

Housing is a classic example. State, local and national governments blithely pile all sorts of costs on those who build homes and apartments -- and then often express shock at a lack of "affordable housing."If a builder were so optimistic as to imagine that he could build a 20-story apartment building in Silicon Valley, he would quickly discover that he would be lucky if the powers that be allowed him to build something half that height. What is the cost of this -- not to the builder or to the government, but to the people? It means that half the people who could have lived near their work will have to live farther away and add to the highway congestion -- and highway fatalities -- that result. Not all costs are financial.


Thomas Sowell

Thomas Sowell is a senior fellow at the Hoover Institute and author of The Housing Boom and Bust.

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