Are people inherently born with the right to an important and well-paying job? How about a decent house? The author of a recent article in the St. Louis Beacon certainly thinks so. He advocates a larger government role in job creation and cites Franklin D. Roosevelt’s “Second Bill of Rights,” or a similar economic bill of rights, as the prism through which the entire economy should be viewed.

FDR’s Second Bill of Rights includes:

The right to a useful and remunerative job in the industries or shops or farms or mines of the nation;

The right to earn enough to provide adequate food and clothing and recreation;

The right of every farmer to raise and sell his products at a return which will give him and his family a decent living;

The right of every businessman, large and small, to trade in an atmosphere of freedom from unfair competition and domination by monopolies at home or abroad;

The right of every family to a decent home;

The right to adequate medical care and the opportunity to achieve and enjoy good health;

The right to adequate protection from the economic fears of old age, sickness, accident, and unemployment;

The right to a good education.

The framers of the Constitution saw the need for a Bill of Rights as a means of protecting the people from an overbearing and oppressive government. They drafted a bill of negative liberties, or protections that define what the government cannot do. They gave no guarantee of housing, food, or employment because they saw the dangers that the notion of positive rights pose as a potential threat to liberty — the idea that, just by being born, people are entitled for others to provide them a comfortable life.

Because the government does not produce any wealth, even the most basic obligation to one individual must be paid for by taking from another. In order to guarantee one person a profitable job, a decent home, or adequate food, wealth must first be taken from those who have rightfully earned it, infringing on their liberty to do as they wish with their own money.

Unfortunate individuals who receive assistance do not receive those benefits because it is their inalienable right, but because it is irresponsible to let them starve or freeze in the streets. No one is entitled to anything that is not their own, no matter how basic of a necessity; however, it is the responsible duty of able individuals to help those in need through their charitable impulses.

Although the end result may be the same, in terms of the needy receiving necessary aid, there is a stark distinction between an unalienable right to something and the responsibility of an able man to care for their fellow man. The difference can be summed up in one word: liberty. The liberty of every individual to do as he pleases with his own money and resources. Although it is repulsive — and, at the very least, irresponsible — for an able individual to let those less fortunate starve, I have no right to infringe upon their liberty to do as they please with their own money.

This is by no means an argument against all government assistance. Obviously, the government cannot allow its citizens to starve or children to live on the streets, homeless. Rather, my objection is with the larger issue of entitlements justified through a notion of positive rights. When fully implemented positive rights lead to socialism, a concept that has been tried and found ineffective at growing economies, raising standards of living, or even helping the very poor. To paraphrase Margaret Thatcher, “The trouble with Socialism is that eventually you run out of other people’s money.”

An article in the Post-Dispatch reports that the National Park Service is considering converting the St. Louis treasure that is Grant’s Farm into a national park. One of the great things about Grant’s Farm is that it is run privately by Anheuser-Busch, Inc., and the Busch family, at no cost to taxpayers. The park has been run for 55 years without charging an entrance fee, all while losing $3.5 to $4 million annually.

It is not clear who approached whom with the proposition to make Grant’s Farm a national park, but one can only hope it was not the National Park Service. The budget for our national parks is already strapped, and the lack of funds is evidenced by deteriorating infrastructure. The last thing needed is to add one more park to be maintained with public funds. Furthermore, the growing national debt makes it unlikely that the NPS will be receiving a significant increase in funding in the near future.

I believe Grant’s Farm has the potential to become sustainable if it were to charge an entrance fee. The 273-acre animal preserve is visited by 550,000 people a year, more than enough demand to allow the parks owners to cover costs — or even turn a profit, if management operates the park efficiently.

I hope the Busch family and Anheuser-Busch continue to run Grant’s Farm, even if that means charging an entrance fee. Grant’s Farm provides a unique experience that will be lost if it falls under government control.

New Jersey’s governor is pushing for the privatization of numerous public services as a means to trim the state’s budget. These services include car inspections, state parks, psychiatric hospitals, and turnpike toll booths. Furthermore, preschools would no longer be constructed on the public dime, public employees would be required to pay for their own parking, and the cafeteria, education, and health care programs in prisons would be handled by private vendors.

Some estimates project that the proposal will save New Jersey $210 million annually in taxpayer funds. From the article:

“The question has to be, ‘Why do you continue to operate in a manner that’s more costly and less effective?’ rather than, ‘Why change?’ ” said Richard Zimmer, the former Republican congressman who chaired the task force.

By and large, privatization lowers costs and raises quality. Unlike the government, which can continually operate in the red, a private firm must turn a profit to stay in business, a fact that makes private service providers much more accountable to consumers. The unresponsiveness of public service providers is especially evident when spending hours in line at the DMV or post office. A private firm with a similar service record would either have to take steps to become profitable, by increasing service and lowering costs, or face going out of business.

Missourians would benefit if state officials followed New Jersey’s lead by finding ways to privatize services and save taxpayer money. The efficiency gains that privatization bring would provide a means to cut costs without cutting services. Missouri could do well for itself by entrusting responsible private businesses to help carry some of the state’s fiscal load.

Many variables affect a state’s economic growth, including public policy, natural resources, geographic location, business centers, etc. The large number of contributing factors make it difficult to definitively attribute growth, or the lack thereof, to any particular variable. However, it is clear that, on the margin, income tax rates matter.

Every dime that the state takes away from an individual or business, through an income tax, is essentially taken out of the productive economy. Consequently, the capital that would have been spent investing in future goods is no longer available to the entity that would have otherwise used it. This, in effect, stifles growth.

Some might argue that public spending pumps that money back into the economy, but the 2009 American Recovery and Reinvestment Act is a perfect example of that kind of Keynesian theory failing in practice. The bill massively increased government spending,but did little to stimulate growth in the economy; unemployment remains around 10 percent. In practice, government spending provides much less of a stimulative effect than comparable tax cuts.

It would be in Missouri’s best interest to lower — or even abolish — the state income tax, thus enabling Missourians to spend and invest more of their own money to grow our stagnant economy. As demonstrated in the table below, which displays average annual growth rates per state between 1997 and 2008, Missouri’s growth ranks seventh-worst in the nation. Abolishing or reducing the state income tax would be a step in the right direction toward positive change.

Source for GDP Numbers: Bureau of Economic Analysis

The state government is facing a dilemma over whether to cut spending or raise taxes because of a constitutional requirement that the governor sign a balanced budget. It seems like a rather easy decision to cut spending, especially in the midst of an economic downturn, but others do not agree. A letter to the editor published in the St. Louis Post-Dispatch argues that Missouri’s budget problems would best be solved through higher taxes, saying that “the cuts have inflicted irreparable damage on the citizens.”

The faltering economy has certainly made it tough for Missouri, but raising taxes is the last thing we should do. Cutting the budget obviously hurts some state programs but it is a far better option than tax hikes. Higher taxes would lead to fewer productive jobs and less economic growth — this is not a remedy for a healthy recovery. Increased taxes would take more money out of the pockets of individuals and feed it to the wasteful beast that is government. At a time when Missouri’s families are tightening their belts, the Missouri government should follow suit. Missouri and its citizens would be better off if the government let the people of this state keep more of their own money, allowing them invest and grow Missouri’s economy.

Hat tip to John Combest for the link.

Last Thursday, the governor cut $47 million from the state’s annual $600 million tax credit program. This program grants incentives to businesses that officials deem as providing some benefit to the community. The cut was made in an effort to balance the state budget in the face of decreasing revenues from Missouri’s slow economy.

Only two weeks ago, though, the governor advocated an incentive package for Ford Motor Co. worth $15 million per year for the next decade, aiming to keep Ford in Missouri. Ford’s Claycomo plant employs 3,700 Missourians, jobs that no politician wants to lose to another state, especially when Missouri is facing unemployment between 9 and 10 percent. The governor said he may call the legislature into a special session to pass the the package, even before receiving assurance from Ford that the plant will stay if the bill passes.

Tax credits generally entail some amount of dead-weight economic loss, as has been extensively discussed on this blog before. By subsidizing those industries or companies that state officials view as most important, tax credits will tend to distort natural aggregations of supply and demand. And no matter how carefully they choose which companies or industries should be the recipients of tax credit policy, public officials have no special ability to choose the right mix of industries or predict which one might maximize economic growth.

Many companies have come to rely on maintaining their profits through use of those tax credits that have been subject to recent cuts. Telling them to tighten their belts while at the same time handing out $150 million in incentives to Ford just isn’t fair. Tax credit cuts are necessary, and more cuts are needed, but simultaneously crafting a piece of legislation full of tax incentives for Ford makes it look like the state is just playing favorites.

Missouri’s unemployment rate dropped two tenths of a percent from April, according to the Department of Economic Development. The drop in unemployment can be attributed to a net gain of 4,900 new jobs in this state in May. This is a good sign, but how much does it really mean?

Considering the federal government hired 7,300 temporary census workers last month, it doesn’t mean much at all. In the private sector, Missouri actually lost jobs. Employment gains in leisure, hospitality, and “other” services experienced modest gains, but other sectors saw more substantial job losses. Construction, manufacturing, professional and business services, and educational and health services all experienced job losses in Missouri last month. Not counting the newly hired and temporary census workers, Missouri actually lost 2,400 jobs.

Furthermore, some Census workers have alleged that the bureau has engaged in repeated hiring and firing in order to intentionally inflate employment numbers. A personal friend of mine who recently worked as a Census taker in the St. Louis area claims to have filled out new hire paperwork and been retrained every time he finished a neighborhood. The training of a census employee takes three or four days, so taxpayers pick up the check for the “training” — with no actual benefit to the Census efforts — every time a worker is retrained. Ultimately, special interests affect every level of government.

A June 2 article in the St. Louis Business Journal discusses a plan to revitalize a former shopping mall and office space, as well as the former Dillard’s building and Union Pacific railroad building downtown. The plan is to convert them into multiple repurposed buildings: The Laurel, Park Pacific Apartments, The St. Louis Centre, and The One City Centre.

This initially sounds great (I am definitely in favor of a better-looking city), but after factoring in the cost of $89 million from Missouri taxpayers, the plan begins to lose its luster.

Private developers are footing the majority of the bill, but the remaining government intervention into this real estate market seems ill-advised. When an investment becomes economically viable, a private entrepreneur will usually dive in with no cost to the state. Whenever the government involves itself in a market, on the other hand, either through subsidies or special taxes, it entails some amount of dead-weight loss, but by placing some trust in reducing burdensome regulation and allowing the market to work, we can eliminate some of this wasted productivity.

If politicians had a demonstrated track record of choosing investments that paid off, there could be an argument for such targeted tax credits — but no such track record exists. If no private developer finds it worthwhile to redevelop a set of properties without receiving massive tax credits, the project is probably not an efficient way to invest our tax dollars, especially at this time when fiscal discipline is so important. The government would better serve the people of Missouri by trusting the market to do its job.