Ron Paul’s Irrational Economic Plan

U.S. Representative Ron Paul just released an economic plan that he promises to implement if he is elected President next year. The plan has two parts. Part one: Shrink the democratic government with draconian cuts to domestic spending that eliminate five entire cabinet departments, while leaving the departments of Homeland Security and Defense intact. Part two: Reward corporations that move American jobs overseas by giving them a holiday during which they’ll be completely free of taxes on profits made in their foreign factories, but will still have to pay taxes on profits made in factories in the United States.

Ron Paul says that “this is the only way to prosperity,”, but as much as libertarians pride themselves on being economically rational, his plan defies simple logic. On the one hand, Paul asserts that the government isn’t effective at creating jobs. But on the other hand, part of Paul’s plan is to prevent the economic pain of massive job loss in the federal government by transferring workers from the cabinet departments he would destroy to work in new jobs in the remaining departments. It seems that government jobs are worthwhile after all.

Then, how would those new government jobs be paid for? Paul’s plan doesn’t address this problem, but it’s obvious that there would have to be increased spending in the remaining federal government departments in order to pay for the new government jobs. Financially, the plan is shell game, causing havoc in the federal government, and reducing its ability to provide essential services for the American people without actually resulting in much reduction of the cost of government. It would replace purposeful jobs with jobs created merely to keep government workers employed.

I don’t accept Ron Paul’s underlying premise that the federal government, created democratically by the American people, needs to be fatally disabled. The real problem our nation is facing is that corporations have amassed too much power and have begun to treat the government as an asset that they share among themselves, but not with the American people. Even if I was to buy Paul’s anti-government rhetoric, however, I could not support his plan. Rather than solving problems in the federal government, it would make them worse.