The Republican candidates for president are doing a good job of honing their anti-Obama and pro-growth, pro-jobs arguments. The election is shaping up to be epic because the choices couldn't be more stark or fundamental, and the outcome will undoubtedly have a profound impact on the future of the U.S. economy.
Obama has defined the liberal position in no uncertain terms: There is no way we can make any significant cuts in current and projected spending; to close the deficit we will need more taxes, and only the rich can afford to play that role. Meanwhile, we can grow the economy by giving the government more opportunities to direct the course of the economy.
The Republicans are making the exact opposite point: There is no way we can allow the government to remain as big as it is (close to a post-war high relative to GDP), and there is no way we can impose higher tax rates on this economy; to close the deficit we will need to reduce the size and role of government. We can grow the economy by relying less on government to make decisions for us, and more on individuals and free markets to make the right choices.
If you believe that government can administer the economy's scarce resources better than the private sector, vote Democrat. If you believe the private sector administers those scarce resources better than government bureaucrats, vote Republican.
So far, so good, but the Republicans are making three huge mistakes.
The biggest mistake the Republicans are making is on the subject of immigration. The party is veering far too much in the direction of isolationism, and the party is much too anti-immigrant for my taste.
This country was built by immigrants. I believe the vast majority of immigrants are people who are willing to risk everything in the hopes of creating a better life for themselves and their family in a place they've never been. Immigrants bring new blood into the country, new ambition, and yes, they compete with legal residents for jobs. But prosperity is not a zero-sum game. We can have more immigration and more jobs for everyone, if we have the right fiscal and monetary policies and if government gets out of the way of the private sector.
Why do we have so many illegal immigrants? So far, the only answer I've heard is that the federal government has failed to secure our borders. We have failed to keep out the people who desperately want to get in, to find work, and to improve their lives. So, according to most of the candidates, we need to build a bigger fence and devote more resources to policing the border.
I haven't heard anyone say that maybe we unwittingly have created huge, perverse incentives for immigrants to come, because we have a huge social safety net that is not too hard for anyone (including legal residents) to game. Build it and they will come; offer generous handouts and subsidies, and don't be surprised if all sorts of legal and illegal people sign up for a piece of the action.
I haven't heard anyone say that maybe we have so many illegal immigrants because we are making it extremely difficult for those who want to come here, to come legally. We have an immigrant quota system of roughly 500,000 per year, but many more than that want to come. I personally know several people who have waited 5 to 10 years to get a resident visa, because the countries they came from had huge waiting lists. Would you be willing to wait 10 years to take your family to America if you were suffering and willing to work hard?
One solution to our immigration problem would be to drastically increase our annual quotas, especially for those who are offered a job here by an existing business. As it is, work visas are extremely limited in number, and are often allotted in a matter of days, leaving businesses who want to hire a foreigner (perhaps one educated at our excellent universities) in the lurch for the rest of the year.
Another solution to the immigration problem would be to reduce the size of our social safety net. Fewer handouts and fewer subsidies would reduce the incentive to come for those who just want to take advantage of our generosity. Why not tell today's immigrants what we told the massive waves of immigrants who came here around the turn of the century? Don't come here looking for a handout; you'd better have someone willing to sponsor you if you can't take care of yourself; and be sure to learn English as fast as you can so you can be a productive member of society.
In dollars and sense terms, a significant expansion of legal immigration is simply in our nation's best interest. That's because without immigrants, the U.S. population will soon start to shrink just as the populations of Europe, Russia, and Japan are now shrinking. Without an ever-growing population, we have no hope of delivering on today's social security and medicare promises. If we shut the door on immigrants we will be cutting off our own nose to spite our face.
The second biggest mistake the Republicans are making is with social issues.
Libertarians are the conscience of the Republican Party, and libertarian philosophy tells us that the government that governs the least is the best. Why, if Republicans are all for individual freedom and free markets, are they also calling for national rules governing abortion and gay marriage? Why should the government give me free rein when it comes to working, but stick its nose in my bedroom?
The only sensible approach to social issues is this: they are not within the purview of the federal government. Perhaps they are issues best left to the states, or perhaps they are simply matters of conscience and morality. Personally, I am against abortion, but I'm understanding of the girl who was raped and can't abide the thought of having a baby whose father violated her. Regardless, I don't see why the federal government has a say in the matter or why federal money should be used to fund her abortion.
The third issue that is entirely missing from the debates so far is this: Should the federal government undertake works of charity? Liberals love to feel compassion for the downtrodden and the unfortunate, but when they create government programs to take care of these people, they are doing charitable works with other people's money. That's not charity, that's theft, and it's immoral. Charity is using one's own money to help the downtrodden and the unfortunate. Americans are famously charitable, and I'm convinced that there is no shortage of charitable funds in this country to deal with those who have truly suffered from bad luck or bad genes. There would be even more money available for private charity if we cancelled a good portion of the transfer payments that today represent well over half of total federal spending. Charity should be in the exclusive purview of individuals and the private sector.
In this same vein, it makes no sense for the federal government to design and administer a national healthcare system: that is better left to the private sector. A few simple changes would do wonders toward reforming healthcare: change the tax code to eliminate the huge incentive for employers to pay for employees' insurance, since that will give individuals responsibility for their own healthcare decisions; change the rules to allow insurance companies to offer policies across state lines; and stop governments at all levels from mandating levels and types of coverage. In general, anything that decentralizes decision making, gives individuals the responsibility for paying for their own healthcare costs, and opens the door to competition and market-based innovation is a good idea.
Finally, not only is government "charity" immoral (because it appropriates one person's money to pay for another person's idea of what is right), it is inefficient and destructive of the very fabric of society. When the government tries to take care of our every misfortune, we cease taking responsibility for ourselves and our loved ones. As Milton Friedman taught us years ago, you spend your own money on yourself much more carefully and thoughtfully than you would spend other people's money on other people. We need to get the incentives right, because today they are all screwed up.