The rise of social democratic ideas in Western Europe after World War II made hundreds of millions of people overly dependent on their governments’ good will and their econometricians’ expertise. Large income inequality was perceived as an evil that must be eradicated through redistributionist policies. The older members of the European Union agreed to subsidize the poorer newcomers intending to help them close the development gap. Instead, the practice of “spreading the wealth” around the Old World stimulated a culture of slothfulness and irresponsibility among the people coupled with corruption and reckless wastefulness in politics.

Flooded with free money, union workers in Greece, Spain, and Portugal developed the idea that they can remain as productive as their Third World counterparts and still be entitled to salaries, benefits, and pensions comparable to the ones earned in the United Kingdom, France, or Germany. The result was a drag on the economic growth in the more frugal European core and an unsustainable expansion of indebtedness on the spendthrift periphery. In this contemporary Greek tragedy the ratio of government debt to national income in that country more than doubled since the turn of the century to reach the unbelievable 160 percent and with no end in sight.

Some EU countries heard the wake-up call and chose different strategies. When the new Tory-led government in Great Britain evaluated the situation, it took the only sensible course of action—abandon the stimulus philosophy and act preemptively with austerity measures to avoid the Hellenization of its economy. Did the British government design and execute a perfect plan? Far from it. Instead of reducing the size of government, the British are content with slowing its growth. Even more unfortunately, the Brits have used one hand in an attempt to cage the beast while with the other they have squeezed more taxes from the people. But at least they have learned a lesson in leadership—the best time to withdraw your people and institutions from their addiction to living beyond their means is during an economic crisis. When times are good and credit is cheap and easy, there is little incentive to stay on the path of fiscal responsibility.

At the beginning of last summer I started a series of commentaries on Friedrich Hayek lamenting that we have missed our chance “to test the Austrian theory of the business cycle against the ideas of Keynes.” On both sides of the Atlantic, governments follow policies based on mixed, sometimes mutually exclusive, theoretical structures. Thus neither The New York Times’ Paul Krugman nor I can collect empirical data from our current economic environment to prove conclusively the superiority of one view over the other. Are the flawed European austerity programs better than the best stimulus plan that President Obama could shove down the throat of the American people? You tell me: One puts the junkie in a rehab; the other subsidizes the consumption of drugs. It’s possible that the latter feels better today but how about tomorrow?

Oliver Wendell Holmes, an associate justice of the U.S. Supreme Court, believed that “taxes are what we pay for civilized society.” The guy lived at a time when the federal income tax code could still be read in an hour and understood by most non-lawyers. Over the next 80 years we have chopped down tens of millions of trees just to produce IRS forms. Today our civilized society is torn apart by a barbarian invasion: millions of tax legislators, tax collectors, tax advisers, tax preparers, tax lobbyists, and tax litigators. These hordes of accountants and lawyers are more efficient in diminishing our economic vitality, sabotaging our social progress, and extinguishing our personal freedoms than any foreign enemy America has ever faced.

We have forgotten that the purpose of taxation is to raise revenue so the government can protect our God-given rights. Instead we have allowed politicians to use it as a tool of social engineering. In his acceptance speech for the 1976 Democratic presidential nomination, Jimmy Carter called the income tax system “a disgrace to the human race.” With his typical sense of humor, Ronald Reagan defined the taxpayer as “someone who works for the federal government but doesn’t have to take a civil service examination.”

“Without justice,” asked St. Augustine, “what are kingdoms but great robber bands?” After Americans are done producing goods and services and would like to enjoy the fruits of their labor, they still have to spend billions of hours every year on tax compliance. Our government is violating the Constitution, inflicting a “cruel and unusual punishment” on most of its citizens. And they punish us not for stealing and murder but for creating jobs and wealth.

My fellow economist and former House Majority Leader Dick Armey calls it a “virtue tax.” How long shall we put up with this injustice? We would be fools not to demand from our next president to lead Congress in removing this unbearable burden by scrapping the entire tax code and replacing it with something simple, clear, fair, predictable, enduring, and uniform. We need a bill that is no more than a dozen pages long. Flat tax, sales tax, a combination of both—take your pick. What we have now breeds corruption and subverts the democratic process. It is insane and it has to stop.

“Wherever a discretionary power is lodged in any set of men over the property of their neighbors, they will abuse it … and assessors will ever be a set of petty tyrants. … The genius of liberty reprobates every thing arbitrary or discretionary in taxation … whatever liberty we may boast in theory, it cannot exist in fact while assessments continue.” This warning does not come from Milton Friedman or Friedrich Hayek. Alexander Hamilton, the foremost champion of strong central government among the Founding Fathers, issued it.

A century later, the Scottish economist John McCulloch noted, “The moment you abandon the cardinal principle of exacting from all individuals the same proportion of their income or of their property, you are at sea without a rudder or compass, and there is no amount of injustice and folly you may not commit.”

Anticipating the rise of the welfare state, a New York Times editorial at the beginning of the 20th century prophesied: “When men get into the habit of helping themselves to the property of others, they cannot easily be cured of it.”

Looking at our tax code it seems that generations of American politicians have sided with the idea of Marx and Engels to impose “a heavy progressive or graduated income tax” in order to confiscate “all capital from the bourgeois, to centralize all instruments of production in the hands of the state.” Not that our legislators have been acting consistently against the interests of the “bourgeois.” Reminding me of the mystery of Jekyll and Hyde, over the years those same politicians have inserted, amended, repealed, and reintroduced countless tax breaks, deductions, credits, exemptions, and other loopholes so that their major campaign contributors could altogether avoid paying taxes.

If you want proof that our republic has been hijacked by special interests, look no further than the Internal Revenue code. Americans have passively witnessed the rise of a system that squanders resources and confers privileges at the expense of growth and fairness. It’s nothing but legalized plunder. You know it and I know it and we must remind our public servants of the words of Samuel Miller, an associate justice for the U.S. Supreme Court, who declared in the late 19th century: “To lay with one hand the power of government on the property of a citizen, and with the other to bestow it on favored individuals … is none the less robbery because it was done under the forms of law and is called taxation.”

One of the most abused economic ideas in American politics is the concept of “externalities.” There are undeniable positive spillovers in education. When I learn to read I can get a better job. That benefits me. It also benefits my employer who gets a more skilled worker. And it benefits everyone else (assuming they all like liberty) because now I can read the Constitution and oppose the rise of a tyrannical government.

Thus a valid argument exists for partial financing of education through taxation. Unfortunately, our government has taken over the education process itself, making sure that children in public schools will never get exposed to God’s Word or to the inconvenient writings of the Founders of the American Republic.

Another example of such social engineering is the mortgage interest deduction. The justification for that tax break is that as a property owner the deduction gives me a higher stake in increasing the prosperity and preserving the freedoms of my country. But this fine idea was abused for decades, resulting in a housing boom followed by an inevitable financial crash.

The externality argument also can be made in the case of vaccines. If I get a flu shot, I not only avoid an expensive sickness but also protect the health of others who would come in contact with me in the coming months. Thus we could argue for limited subsidies of medical research or some government intervention in dealing with the most dangerous epidemics. But the case for socialized medicine is far from proven.

One of President Obama’s policy pillars is “energy independence.” Leaving aside the fact that no one has ever made a convincing case for self-sufficiency in any sector of the economy, this administration’s bias toward “green” technologies is highly questionable.

First of all, our tax code is already as porous as the Swiss cheese in my sandwich. It has been distorting market signals, reducing economic efficiency, and destroying jobs for decades. We don’t need more loopholes; we need to close the existing ones. If the Chinese government wants to use its taxpayers’ money to subsidize clean energy research, let them do it and let us later copy and free ride on their efforts for a change.

Second of all, research shows that we may have more fossil fuel reserves than all of the Middle East. So if gas prices keep increasing or if Venezuela’s dictator stops selling us his oil, we can always increase domestic production or bring in more from Canada.

Last but not least, market competition and cost cutting are powerful enough motivations for unhindered private entrepreneurs to seek new resources and to improve energy efficiency. Without handouts and bailouts, businesses are more likely to serve our needs without producing a clean-tech bubble. Before you pay 50 bucks for Obama’s “green” light bulb, look at our refrigerators—their average energy consumption fell by more than 50 percent between the oil crises of the 1970s and 1990, when the first federal efficiency standards for appliances went into effect.

If you want to do something good for the economy and the environment at the same time, fix those portions of the tax code that encourage consumption and discourage savings and long-term investments. But if you insist on using taxation as a tool for fixing externalities, please consider a tax deduction for guns. More armed homeowners equals less crime equals more money in the local and state budgets for other programs.

While the president and his sympathizers in the media are trying to convince us that we can close the gap between federal receipts and outlays by increasing taxes on guys like Buffett and Gates, political scholar and commentator Paul Kengor asks us to consider that the root of our problem may be on the spending side.

Malignant ideas about the role of government entered Washington a century ago through two “progressivist” presidents: Republican Teddy Roosevelt and Democrat Woodrow Wilson. Those ideas were entrenched in the economy by FDR’s New Deal. But it wasn’t until the launching of the mega experiment called the Great Society and the conscious application of the Keynesian idea of smoothing the fluctuations of the business cycle that our federal government started on a trajectory of uninterrupted and unsustainable growth.

Kengor notes that from 1901 to 1965, outlays had been decreased year-to-year nearly two dozen times. Starting with LBJ, each administration, Republican or Democrat, has spent more and more each year. As a result, each president has left a bigger debt to his successor despite the fact that each of them had managed to squeeze more money out of the citizens’ pockets than his predecessor. (Even after Ronald Reagan reduced the highest marginal income tax rate from 70 to 28 percent, Internal Revenue Service data revealed that tax collections from the wealthy had increased.)

Before Johnson’s Great Society, our deficit was $1.4 billion; today it is one thousand times larger. We can compare Washington’s addiction to deficit spending to a fiscally illiterate head of household who borrows 40 cents of every dollar they spend on food, rent, gas, utilities, and medical bills. The guy even pays his taxes with credit, transferring the balance from one plastic card to another. Of course, no individual can play this Ponzi game for long without ending up in prison or a mental facility. Not only has Uncle Sam been playing it for decades, he’s playing it with a gun in his hand.

Does that mean that conservative icon Ronald Reagan (recently hailed by the president as an apostle for social justice) is as guilty as George W. Bush or Barack Obama of growing the size of government? Yes and no. Reagan did set a bad example by raising the debt ceiling 18 times in eight years. But a recent publication by the American Legislative Exchange Council reminds us that “all debt is not created equal.” The additional $2 trillion of debt during the 1980s achieved goals as praiseworthy as the ones achieved by debts incurred during WWI and WWII. It freed hundreds of millions of people like me from their socialist cages and it rebuilt an economy devastated by Keynesian stagflation.

As for today, imagine how much better off we could have been if, instead of accumulating more than a trillion dollars of new debt every year since 2008 from bailouts and “stimulus” spending, the government had made a credible long-term commitment to shrink its size and let businesses and households invest and spend all that cash.

Remember how Rick Perry’s chances in the GOP race faltered after he could not remember the name of one of the three federal agencies he wanted to eliminate. His public speaking skills were not impressive, but he could be the frontrunner today if he had hired Steven Landsburg as an adviser. The popular “armchair economist” has picked three agencies to ax that would help win most any election: Agriculture, Commerce, and Labor.

Listen to his logic: Each of these three serve well-organized special interest groups. Their powerful clients create a major obstacle to eliminating them one at a time, but clustered together they make an easy target. The first subsidizes big agribusiness at the expense of workers and entrepreneurs in other sectors. The second one siphons off resources from farmers and workers in support of selected companies that pay back by contributing generously to politicians’ campaigns. The third agency secures privileges for the labor unions to the detriment of small businesses and farms. Thus a promise to eliminate all three parasitic bureaucracies seems like a pretty good deal—every American “loses one friend and two enemies,” and for most of them that would be an offer they should be foolish to reject.

Landsburg’s ideas on how to reform the political system don’t stop there. Applying a simple principle of internalizing externalities, he proposes that every citizen should get two votes—one in his home district and one in a district of his choice. Currently, politicians have strong incentives to turn our federal tax dollars into pork for the people in their districts without considering the costs to the nation as a whole. We have an incentive as individuals to reward behavior that impoverishes us collectively. But with two votes the people get the chance to gang up against the most wasteful politicians, giving the members of Congress a reason to think about the social costs of their actions.

It gets better. You know how people complain that so many of their fellow Americans pay no attention to the work done by their representatives, giving the latter a chance to act more irresponsibly? The next proposal solves that problem. The idea is to determine federal taxes separately for each district “as a function of the congressman’s voting record.” If your representative supports more spending, you will immediately pay higher taxes. Both you and your congressman or -woman are now incentivized to consider the costs as well as the benefits.

Landsburg’s most intriguing proposal is to disqualify anyone who has turned 60 from voting on Social Security policy changes. According to Landsburg they must be treated like corporations that get all the profits from producing but are exempt from paying the costs for polluting. While the rest of the nation will experience over time all the costs and benefits of the program (i.e., have powerful incentives to choose wisely), the elderly get all the pleasure and none of the pain of expanding the welfare state.

The late Dr. D. James Kennedy was approached once by a fellow believer who questioned the pastor’s call for Christians to enter government and transform secular culture: “Politics is such a dirty business, shouldn’t we stay out to avoid temptations?” Dr. Kennedy answered with his own question: “Do think that you, the Church, and the nation will be better off if Christians abandon the governing of our society into the hands of atheists and moral relativists?” Politics needs the salt and light of Christ’s message as much as any other area of our lives.

God made a covenant with Abraham, Isaac, and Jacob that gave Israel the honor and responsibility to be His chosen people. The Lord was patient for centuries with His stubborn children—sending messengers to rebuke them for their evil deeds, sending enemies to discipline them when they refused to listen, sustaining them in trials, comforting them in exile, healing their wounds when they repented. Israel was promised every blessing and all they had to do was be God’s priests among the nations.

Then God sent His Son to be among His people, but Christ was crucified, the gospel rejected, the Church persecuted. The temple was destroyed, the nation of the old covenant was scattered, the priesthood was taken away from the Jews, and the Christians became the new chosen people in the risen Christ. Now, every one of us is charged with the same mission as those who descended in flesh from Abraham through Isaac—to be “salt of the earth” and “light of the world.”

Many blame Rick Santorum’s primary losses on his lack of focus. A recent commentary at WORLDmag.com noted that the public has perceived him as “unprepared for the office” because he had “took up the religion-in-politics topic.” The argument is that people care more about current economic hardships than social issues and the role of faith in the public square, with many conservative commentators scolding candidates who get “distracted” with perennial issues like abortion and sexual immorality. I understand the argument on a pragmatic level, but I have to disagree that Santorum is getting fruitlessly entangled with a question from a political philosophy course.

If we want to find a solution to our current economic troubles, we need all professing Christians to focus on the main issue—just as the Founding Fathers of the nation did at the beginning. When Benjamin Franklin participated in the debates at the Constitutional Convention in 1787, he pronounced the following:

“We have been assured, Sir, in the Sacred Writings, that ‘except the Lord build the House, they labor in vain that build it.’ I firmly believe this; and I also believe that without his concurring aid we shall succeed in this political building no better than the Builders of Babel.”

Whether you are a butcher, a baker, or a policymaker, this is the attitude that every Christian leader should exhibit regardless of current political circumstances and cultural norms.

Jesus set an example for us to stand for the truth regardless of its repercussions. He wants us to be His disciples 24/7 and to boldly proclaim His Lordship over all aspects of our lives. The world around us is in darkness, and if we hide God’s light because of peer pressure or for political gain, we become as useless as the priests in the temple on that first Easter Sunday.

“The recent rise in gasoline prices around the country is yet another example of why democratic control over the commanding heights of the economy is the only way forward for working people,” writes John Peterson at the Socialist Appeal website. Economic troubles bring Keynesians and Marxists to the surface as surely as the rain brings up earthworms.

In his published opinion on monopoly power and gasoline prices, Peterson, who is listed on the web as national secretary of the Workers International League and the Hands Off Venezuela Campaign, is quick, like Nancy Pelosi, to blame our current pain at the pump on “profiteering.” All economophobic activists have this in common: They ask only a fraction of the relevant questions and make bold assumptions about the capacity of policymakers to prepare good blueprints and of bureaucracies to efficiently implement them. They ignore the lessons of history and end up with ludicrous solutions.

Do you think that monopoly capitalism is the reason why you’re now paying $4 for a gallon of gasoline? Then ask yourself why you paid only $3.20 for the same gallon in January. Did the “unprecedented accumulation of oil wealth in the hands of fewer and fewer companies,” as Peterson claims, occur in February? Were Wall Street’s speculators less interested in making profits last year? Probably not. So the next relevant question is: If the market was just as “monopolistic” and people were just as greedy in 2011 as they are in 2012, why are prices spiking now? Perhaps global cooling has increased the demand for heating oil. Perhaps the global economy has grown very rapidly. Perhaps another factor has made the global consumer less sensitive to those prices. There’s a good reason you don’t like any of these explanations. None of them can pass the smell test. The truth: Volatile prices are not proof of collusion; they are evidence of competition.

The Marxist agitator quoted above is a step ahead of the former House speaker in his analysis by recognizing the phenomenon known as “monopolistic competition.” That is why Peterson’s plan goes a step beyond Pelosi’s idea to regulate everything she disapproves of.

I have noted this before: A Keynesian is nothing but an inconsistent socialist. If you believe, as Peterson does, that economic freedom translates into “cutting corners on quality, wages, safety precautions, etc.,” if you think that capitalism means waste because “the masses have no democratic input into what is produced, how much is produced, and above all, what happens to the excess wealth created by the workers,” then you should fight to abolish private property over the “commanding heights” of the economy.

There is no point in saving a system that breeds unemployment and thrives on exploitation. The problem, says our Marxist friend, is not too little competition but too much of it. What we need is government monopoly. Perhaps all previous socialist revolutions failed because they did not go far enough. What could be Peterson’s solution? Ah, yes, “a democratic world socialist federation in the interests of all of humanity”!

During the last four years we witnessed the return of free lunch economics with easily predictable results. In early 2008 President Bush threw a Hail Mary pass in an attempt to avoid the coming recession by putting “tax rebate” cash in the hands of the consumer, supposedly to “boost aggregate demand.” Later that year, a bipartisan plot in Congress blessed the joint efforts of the Treasury and the Federal Reserve Board to bail out indiscriminately all corporations considered “too big to fail”—the good with the bad plus a few ugly ones. A few months later, an enthusiastic new president eloquently persuaded his troops on Capitol Hill to pass a “stimulus” bill in order to prevent the loss of existing jobs and “create” new ones.

The retro-Keynesian gimmicks promised 3 million jobs. Instead, by following the advice of our “defunct economists” we added $3 trillion in debt and set a post-Great Depression record of keeping the unemployment rate above 9 percent for 21 months in a row. Even if the causality between the stimulus spending and the appearance of 3 million private sector jobs existed today outside of Paul Krugman’s imagination, am I the only one who thinks that $1 million per job is a bit extravagant?

One of my readers called President Obama’s “blueprint” for America a “redprint.” Another labeled it a “black eye.” Obama’s only consolation is that FDR’s New Deal did even worse than the American Recovery and Reinvestment Act, never bringing unemployment below 20 percent. It was Henry Morgenthau Jr., President Roosevelt’s Treasury secretary and chief architect of the 1930s jobs bills, who admitted, “We are spending more than we have ever spent before and it does not work … after eight years of this administration we have just as much unemployment as when we started. … And an enormous debt to boot!”

Considering the pitiful performance of the United State’s economy under the inept leadership of the White House and a gridlocked Congress plus the “quantitative easings” of the Fed, one wonders why any sane investor would still want to put his eggs in our basket. The truth behind the current low interest rates on our federal government’s IOUs is not flattering: We are simply the least ugly girl at the ball. Having fooled Europe into buying the toxic assets from our state-sponsored housing bubble, we added insult to injury by setting a bad example of implementing Keynesian fixes for their already heavily indebted and over-regulated economies. It was the American-dominated International Monetary Fund and World Bank that pushed for expansionary fiscal policies in the EU zone, obliterating the confidence of the bond speculators in the ability of many European governments to stay solvent.

But there is a silver lining around the dark clouds that we have brought on ourselves. I am tempted to interpret the recent austerity measures in Europe and the sweeping changes in our domestic intellectual climate and political landscape as signs that the return to Keynesian economics may have been successfully sabotaged. And, God willing, those policies could be put on hold again for another 30 years until a new generation born into prosperity and ignorance of 20th century history gets elected to power in the midst of economic troubles.

There was a busy little town called Bumblyburg. One day Mayor Blueberry received a phone call from Larry the Cucumber who claimed to have come up with an amazing invention. The mayor invited her neighbor to discuss the issue over lunch. Larry explained that he had developed software that would revolutionize several of Bumblyburg’s industries. Blueberry had just completed a community education course on economics and did a quick cost-benefit analysis.

On the downside, the mayor could see Junior Asparagus losing his job as a financial industry equity researcher. Laura Carrot could be laid off as a civil aviation engineer. It looked like Percy Pea’s services in software development would no longer be needed. And the whole Mushroom family, who made a living by producing cartoons, could lose their jobs and be replaced by Larry’s invention. On the upside, the new technology was cutting production costs by 50 percent.

It was a tough decision for an elected official. Should Mayor Blueberry stand in the way of progress in order to prevent the temporary dislocation and hardships affecting several of her constituents? Or should she give the citizens of Bumblyburg an opportunity to consume more goods and services produced with less effort?

The next morning Larry received an email giving him the green light to use his invention. Soon the local school started awarding “Golden Cucumbers” to the winners of its annual science fair.

Bob the Tomato was not happy. He envied his neighbor’s wealth and fame. Bob started spying on Larry, trying to steal the technology and sell it to the Snoodles. Thus the truth came out. Larry’s “invention” was a new way of using his laptop and mobile phone. The secret of his success and the rising living standards in Bumblyburg was outsourcing! Larry had hired college graduates in Whoville to do the jobs previously done by Laura, Percy, Junior, and the Mushrooms—and paid them only half the wages.

Bumblyburg was in uproar. Mayor Blueberry praised the heroic efforts of Bob to expose an evil plot against the general welfare. The laptop and the mobile phone were confiscated and the town was safe from the threat of cheap foreign labor. A “backward slide downward” into the working conditions during the Grinch era was narrowly avoided. Lawyer Pumpkin filed a lawsuit over unfair competition on behalf of the newly founded cartoonists union. Police Chief Potato had to lock up Larry in the local jail to save him from being lynched.

Dear readers, I noticed that my previous commentaries have not persuaded some of you to support free trade. When straight talk fails, wise people recommend using fables. Mine was inspired by economists Frederic Bastiat, James Ingram, and Steven Landsburg, as well as by my children’s insatiable appetite for Dr. Seuss and VeggieTales. Perhaps it will help you to understand that outsourcing carries the same threat for established producers and brings the same benefit to consumers as technological innovations. So if you are consistent, you should oppose inventors and engineers as passionately as you oppose entrepreneurs who invest in Third World sweatshops.