Dan Mitchell talks about what’s happening in the government’s fiscal policy and how it’s influencing the economy.

Jason invites Fernando on to the show and answers a couple of his questions on lease renewal. Dan Mitchell is also today’s Creating Wealth guest. Dan is a senior fellow at the Cato Institute and talks about high corporate taxes, the fiscal policy, and recommendations on how a country’s economy can grow instead of collapse.

Key Takeaways:

1:40 – Fernando shares his opinion on the mastermind group he and Jason are currently attending.

5:50 – Fernando has two questions about upcoming property renewals and wants to pick Jason’s brain on what he should do.

15:20 – Jason introduces Dan Mitchell.

20:05 – Taxing US citizens world wide is a nightmare.

26:05 – The US understands that it can’t go down the same route as failing economies like Greece.

33:58 – We can no longer view the government as a sugar daddy.

Mentioned In This Episode:

https://www.rentometer.com

cato.org

https://danieljmitchell.wordpress.com/

Tweetables:

“Our world wide taxation system does apply to individuals as well and it’s a nightmare.”

“Americans overseas are being denied financial services because no foreign financial firm wants to have a nexus with the IRS.”

“Any country can make fiscal progress as long as they have the government grow slower than the private sector.”

Transcript

Jason Hartman:

Welcome to the Creating Wealth show. This is your host Jason Hartman. This is episode 506. 506. Thank you so much for joining me today as I am talking to you from a roof top of a hotel here in Beverly Hills, California. One of the most overpriced real estate markets in the world. As you know, our client and now investment counselor, client-turned-investment-counselor, Fernando, who you’ve heard on the show before. He’s here with me and we’ve been at a mastermind meeting the last couple of days. I came out to see him for breakfast and he started asking me question and we thought, you know, this would be really good for the podcast, because a lot of investors have the same question. So, Fernando, fire away with I guess, well, first of all, before we fire away with questions. Impressions from the last two days here at our mastermind meeting.

Fernando:

It’s been awesome. I mean, the learning that I’ve done in the last couple of days, the level of the people that are part of the mastermind just blew my mind. You instantly get to a level where your interests are aligned with the people that are present in a mastermind. It does cost quite a bit to be part of it, but with the connections, that instant recognition, the level playing field, you make strong connections with future business partners and get ideas right away. It’s been great. Obviously the learning from a marketing perspective that I’ve gotten was very worth the first meeting that we went to. So, it’s been great.

Jason:

This one is one of the three mastermind groups of which I am a member and Fernando joined this one with me, so that we could get some great ideas on marketing and business and entrepreneurship and so forth, because as you know Fernando’s story, I’ll just refresh your member. He was a client, I met him three years ago. He purchased 70 units, retired about a year ago from Apple Computer. He’s just got a great story and so what we decided to do as he was was encountering some of the frustrations of managing properties and managing the portfolio, of course, we still think is the best thing going, but you know, it’s not without it’s perils and problems here and there.

So, we decided to start a little software company together that provides some good tools for investors to help them find properties, evaluate properties, self-manage properties, and really empower them in that all important task in the property management where investors can buy a la carte property management services. So, more to come on that. We’ve just signed a software development agreement and we’re several months away from having a beta test. Again, to really help you manage your properties, manage your managers and manage the properties, so more to come on that.

You know, what impresses me about these mastermind groups is that the price is part of the qualifier and for this one we pay $25,000 and it’s like you walk in the room and whether it be John (#4:07?), just you know, a whole bunch of other names. You look at all the name badges there as you go and this one is limited in size to a 100 people, but it’s really an elite group. I mean, just the price qualifier you know everybody you’re talking to is the real deal, right.

Fernando:

And they look at you already being a peer. They don’t look at you going there just to have free food. It’s a completely different level and within a few minutes, you can strike a conversation and you find out what somebody is interested in, what your common interests are, and this mastermind is about marketing, internet marketing, and obviously that applies to all fields in business, so we’ve talked to people yesterday, had some great ideas to implement in our company and also we bounced ideas off of these people that have, you know, excellent credentials and can really provide qualified feedback and the feedback they provided on our company is strong, which is awesome.

Jason:

Yeah, good stuff. So, more to come on that and at breakfast this morning you have a few of our licenses renewing of your 70 units and you had some questions for me and as soon as I sat down you told me, “Have your coffee and then I have questions for you.” I thought that was really funny.

Fernando:

Yeah, now that I went to a marketing conference mastermind, we’re going to start a new segment in the program called, ‘What Would Jason Do?’.

Jason:

Which you may not do what I wanna do, but anyway, take it for what it’s worth.

Fernando:

What’s Jason’s opinion on this and we’ll see what we’re be doing. So, yeah, the question is I have a renewal on a property in Naples, Florida and this one is self-managed. We have a tenant that has a two year lease, so the two year lease is expiring in May. The current lease price, the rent price, the monthly price is a $1,075. Now, when we look at the market rent two years ago, it was about $1,200 and the reason that, you know, we are only charging $1,075 is because we negotiated a discount with them. They are landscapers and they agreed to install irrigation systems throughout the property in engage for a lower rent. They are good tenants. They pay on time, they don’t request much, and they even fixed some issues with the house themselves. They’re good tenants, good people.

So, I want to know what you would do. I need to know the market rent currently to have a basis on what the starting point is for the renewal, but the market rent that I see from places like Rentometer doesn’t tell me much. The range that Rentometer provide is very wide. So, we need to get a better feel for what the market is and then what would you do with this renewal. It’s likely to have a big delta in price from what the market is to the tenant $1.075 they’re pairing up.

Jason:

Okay, so the first thing is I would not recommend entering into deal unless you just have to do it where the tenant agrees to improve something for a rent discount, because it’s hard to quantify that and you h never know – you had good luck with this tenant and they’re good people, but you could have someone who does shotty work and you just don’t know.

Fernando:

More to fix what they did then what they promised to do. Yeah.

Jason:

Yeah. Try to stay away from deals like that, because that’s just complex, okay, so that’s the first thing, but since you’re already in it, here’s the challenge you face in this one. Is that you’ve got a tenant that’s used to getting a really good deal on a property and you may not, even if they new rent that you want to charge is say $1,250 per month. You may not be able to pull this tenant up there, because their psychology is at a certain point where they’re only paying like what, $1,075?

Fernando:

Yeah, correct.

Jason:

So, that’s their psychology an that’s just what they feel it’s worth, right. So, they may go out on the market and not find anything else, but they’ll just be possibly, you know, kind of angry with you to try and raise them up to market rent. So, you may have to get a new tenant, but you know, if you can succeed in doing it, then show the tenant the evidence and the reason and sites like Rentometer and RentRange, those are handy sites, but again, they’re like Zillow, they’re really – they’re using an algorithm and it’s very imperfect, okay.

So, when you’re looking at a site, you know, that uses an algorithm to determine rent, it’s never going t be accurate. It’s better than nothing, it’s a guideline. It’s helpful, but what you need to do is go and act like a tenant. There’s an old saying, you know, walk in the other Indian’s moccasins for a mile right, before passing judgment, right. You need to go and act like a tenant would and go to Craigslist, go to the other site where properties are for rent. Go to Zillow rentals and look at what else is out there on the market and do exactly what they’re probably going to do when you hit them with rent increase is they’re going to shop a little bit and maybe they won’t do it seriously, but they’re at least they’re going to look online, so that’s what you need to do to try and get a feel.

Also, since you’re self-managing this property, I think it’s worth a couple of quick calls or emails to a property manage in the area, a couple of property managers, and ask them what it’s worth for rent and just kind of evaluate all of this stuff and go from there, okay. You’ve got one more question and let’s do that and get to our guest, by the way, our guest today is Dan Mitchell, senior fellow with Cato Institute and he’ll be up in a moment.

Fernando:

Alright, second question. What would Jason do? So, have a renewal coming up. This is in Atlanta, Georgia. The tenant is currently paying $1,100 a month and we proposed a two year lease with an increase of $1,200 first year and going to $1,225 second year. As you can see it’s a $100 increase, we were a little bit..

Jason:

By the way, I like your two year lease idea, okay, you know, for someone who is definitely buying and holding the properties, I think the two year lease is a good idea. So, listeners, you can tell your property managers or your tenants if you’re self-managing properties that you want to do two year leases, but you’re not doing two year leases at one fixed priced, you’re doing what Fernando is doing, which is a good idea, is you’re making it higher the second year.

Now, of course the downfall here is you could get trapped with a bad tenant, but you can always kick them out for violating the covenant of the lease or, you know, the other risk you have is obviously inflation risk, but I’m just going to say it over the next two years, I don’t think there’s a lot of inflation risk and you’ve got a small bump in there too. So, what’s the specific question though?

Fernando:

Yeah, so just to finish on your thought. I like the two year lease proposal, because there are more knobs you can play with. If the tenant comes back with a counter proposal, you have more levers that you can adjust.

Jason:

Good idea. Otherwise known as horse trading, right? So, you can trade this for that and you got more points to negotiate.

Fernando:

And it puts them in a frame of mind that there is increase built into your lease, expected to go up next year and there’s some psychology that is involved with that.

Jason:

Some tenants like my mom’s example, you know, you can ask her about this one in the Memphis property tour, listeners. I know a lot of you are going to be there and she’s got that tenant that’s been in her property since 1989! I mean, that’s just crazy. The longest tenant I ever had in a property was nine years. I kept raising the rent and the guy just would not move! It took him nine years.

Fernando:

Okay, so back to the question. So, the proposal that we made is $1,200 first year, $1,225 second year and the tenants came back and says, you know, we will accept these terms, but we would like our late fees to be waived. They’re currently behind on their payments for a couple of months and the late fees are about $230 dollars, so they want the late fees to be waived.

Jason:

Now, one distinction, they’re not actually behind on the rent, they’re just behind on some late fees, right?

Fernando:

Sorry, yeah, I misspoke on that, right.

Jason:

So, they were late a few times and the late fees totaled up to $230 or so and you haven’t collected the late fees yet. You’ve collected the rent, because if you said you hadn’t collected the rent, there’d be eviction, yeah. Right, okay.

Fernando:

Good point. So, should the late fees be waived for a two year lease a the price that I wanted?

Jason:

Okay so, tenant says look, we’re renew the lease for two years and, you know, they’re kind of these types of tenants that aren’t super careful and on it and they’re kind of late now and then, so you have to put up with that, but sometimes the late fees can actually be very profitable and this is one of the reasons we like, you and I Fernando, self-management so much, because the property managers are not keeping the late fees, okay. You’re getting them as the owner, as it should be, or at least it should be on a split and you know, I’ve talked on past episodes about the flat fee property manage where you pay a higher fee and they just get it on everything, but they don’t get these funny little nickel and dimey things.

Past episodes we talked about that in January at the Meet the Masters, etc. We won’t go into it now, but what I would say here is look, you know, never in an negotiation, never just give the other side everything, okay, just use it as a, like you said, more knobs you can play with, more levers, more horse trading, right. So, just trade with them and if you want to make a concession get the two year lease done rather than saying I’ll waive all late fees, I think you should ask things as a question and see what they say and say, look, how about if we split the difference.

You just send them an email, that’s all it says, how about we split the difference and you pay half the late fees and, you know, you got a two year lease, you got a tenant who is late now and then, which means you’re going to collecting some more late fees in the future probably, this is the reason they’re not a home owner, so this is actually can benefit you as a landlord and really increase your ROI quite a bit on the late fees.

Fernando:

I also put some weight on the quality of the tenant I’m dealing with. If the tenant is someone that hasn’t given me a lot of headaches in the past, then I’m more lenient and tried to work with them. I want to keep them, not have a turn-over. If the tenant is troubled, then you know, the negotiation changes and you have to take that into account.

Jason:

Right, so if they’re a difficult tenant, you can be firmer on the negotiation and the thought that maybe they’ll just move anyway, you know, and I won’t have to ask them to move. So, there you go. Okay, good, well Fernando, those are great question. I hope those helped our listeners, let’s get to our guest Dan Mitchell, senior fellow with Cato Institute. Thank you so much for joining me today and here’s Dan Mitchell.

It’s my pleasure to welcome Dan Mitchell to the show. He is a senior fellow at the Cato Institute and focusing a lot on government spending, fiscal policy, and tax plans for the various candidates in the elections. Dan, welcome, how are you?

Dan Mitchell:

Hi, I’m doing just fine. Glad to be with you.

Jason:

Good to have you. You’ve written a lot of about Marco Rubio and Mike Lee and their proposed tax plan, what are your thoughts?

Dan:

On the business side in terms of the treatment of income that is saved in an invested, it’s a very, very good plan. It would basically get rid of almost all the double taxation and the current tax system. It would make America a lot more internationally competitive in terms of both corporate income and in terms of investment. It doesn’t do a whole lot to bring down individual tax rates. The theory that it’s more politically sell-able if you increase tax credits, but I give it a solid B, if not an A-, because what it does for business and corporate taxation.

Jason:

The people on the left love to talk about corporate welfare as if corporations aren’t really massed through entities in my opinion. When companies are taxed more, when they’re regulatory burden increase, doesn’t that just pass through the consumer?

Dan:

Ultimately, all taxes on business are paid by individuals whether in the form of lower returns for share holders, lower wages for workers, higher prices for consumers, businesses simply collect taxes, but people are the ones who pay taxes. Now, that doesn’t mean that there isn’t such a thing as corporate welfare, policies like the export/import bank at the Cato Institute were very critical of those policies, because that’s where government is putting its thumb on the scale and giving undeserved handouts in wealth to the business sector, but we definitely don’t believe that the government should be penalizing the corporate sector with high taxes. Let companies compete, if they earn profits fairly for their shareholders, that’s a good thing for our economy and we should try to keep tax rates low on all productive activity.

Jason:

What do you say about all this money that the multinationals have overseas and some talk about how if the government would to have an amnesty or a reduction in corporate tax, a lot of that money would repatriate and it would be better for the economy overall.

Dan:

The first thing to understand is the reason that companies are keeping more than 2 trillion dollars over seas is simple. We have almost unique in the world a perverse system of world wide taxation, which means that American companies when they earn tax in other countries, which is a good thing, we want our companies to compete successful around the world and earn market share, so when our American domicile companies earn money overseas, they, of course, pay tax where ever that income is earn. They earn money in Germany, they pay tax to the German tax authority, they earn money in China, they pay tax in China, so on and so forth.

Well, under the IRS rules, they also have to, if they bring that money back to America, put on their American tax returns as if it’s American sourcing, come and pay another layer of tax on it and of course, because our corporate taxes is the highest in the world, this is a huge competitive hindrance for American companies and it gives them a giant incentive to keep their money outside of the United States, so some people have proposed, well, why don’t we have a repatriation holiday, so that this money comes back to America, which of course is certainty better than the status quo, but ultimately the answer is we need to reform the tax system. Bring the corporate tax rate down dramatically, you know, certainty no higher than 25%, but ideally 15% or 20% and then like the rest of the world, move to a system of territorial taxation, which is the common sense notion that you only tax income earned inside your borders and if they a company earns income inside another country’s borders, they tax it.

Jason:

Well, this is true of individuals too. I mean, the IRS is the only taxing entity in the world, from what I understand, that taxes all world wide income on individuals, so you know, there’s a very small movement and it is admittedly small, but it’s interesting when these people relinquish their citizenship, it’s almost like they’re having an incentive to do so. If you’re living overseas, why should you be paying American taxes if you’re not using American services. Now, granted, maybe if you got into trouble, you could go to one of our embassies, maybe the government will rescue you or something like that, but you know, it’s a lot less than using various other, the huge list of services here locally at home.

Dan:

Our world wide taxation system does apply to individuals as well and it’s a nightmare. It’s a nightmare because of policies like FACTA, the foreign account tax compliance act, which is leading to Americans overseas being denied financial services because no foreign financial firm wants to have a nexus with the IRS yet the IRS, in affect, wants them to become deputy tax collectors.

It’s fundamentally bad tax policy, because as you pointed out, we’re the only civilized country in the world that has this policy of world wide taxation for our citizen who live and work aboard. He’s the bottom line, if an American citizen is living and working in France, they’re already paying French taxes. If an American citizen is living and working in Thailand, they’re already paying Thai taxes. Why we have this perverse additional layer of tax is anachronism that is very contrary to American competitiveness.

Jason:

well, analyze the corporate tax side. Let’s go back to that for a moment if you would. So, these two trillion dollars is being kept offshore and what would happen if we had repatriation holiday or just a lower tax rate, I mean, the money would flow back and then what would happen? I mean, just kind of analyze the whole thing for the listeners, if you would.

Dan:

We actually don’t need to theorize about it, because we have a real world example from the last decade.  In 2004, there was a repatriation holiday, there was a smaller amount of money at stake back then, but companies brought back I think it was something like 362 billion dollars, because they only had to pay a 5.25% tax instead of this heavy double tax of 35%. So, it was a huge success.

Now, I don’t want to exaggerate the economic benefits, because as I’m sure you understand, global capital will always seek out the best after tax rate of return and so if hundred of billions of dollars, I guess nowadays it’ll be over a trillion dollars of capital comes back to the United States because of an repatriation holiday, there’s no doubt that some capital that’s currently invested in American would instead be invested in some place else, because the after tax rates of return are going to equalize, but clearly it’s going to be a benefit for the American economy. Clearly it would be very adventitious for American companies to utilize their cash holdings more efficiently.

It’s bound to be a win-win for the American economy. Heck! It’ll even – just like in 2004, it’ll probably give the politicians more money. It will be a net win for them even. So, it makes no sense for us to cling to this very anti-competitive system that unanimously is not only bad for our companies, but of course for workers and consumers as well derivatively and even a net revenue reserve for the IRS

Jason:

Yep, I couldn’t agree more. That’s the interesting thing, you know, when you ease up on the taxes and the regulation, you just spur more economic activity and it’s just better for everybody. You know, is it the left doesn’t see that or do they just love this soundbites about, you know, this fake sort of class envy warfare of corporation versus the people or what do you think is going on on that side of the aisle and what they say?

Dan:

I think class warfare drives a lot of it. Ideologically there are some folks on the left who just have disdain and hostility for the market economy and so if a company is making money or an entrepreneur or an investor is becoming quote unquote rich, they assume that it’s somehow bad. I think they have this mentality that the economy is a fixed pie, so if someone like Bill Gates is getting a big slice of the pie, they think that the rest of us are getting smaller slices of the pie and that’s obviously not true and the data is overwhelming showing that in the long run the economy grows and the pie gets bigger and everyone can be better off.

I mean, think about how much better off our generation than say our grandparents in terms of our living standards, our income, the various benefits and the qualify of life that we enjoy, but I think this fixed pie mentality is somehow hardwired into people who support state-ism. Now, that’s one component. The other component I think frankly is just political. Some of these people probably understand, yeah, it’s good to have a growing economy, yes, it’s better to have low taxes than high taxes, but they see short term political advantage from dividing the country to mending class warfare and making it seem like it’s the big guys versus the little guys.

Jason:

Yes, they certainty do. What do you think the other side can come back with to win over the hearts and minds of the electorate.

Dan:

Boy, if I knew the answers to questions like that, I would know how to promote freedom better and I would know how to fight state-ism better, but I think it is critical tying into our last question, we have to somehow figure out ways in explaining to people that a raising tide, as JFK said, will lift all boats and that is a competitive global economy, especially if you look at what’s happened to Europe with the clasp of the welfare state. You need to be able to convince people that growing tax burdens and growing dependency on government are like a cancer that can eat away at the vitality and prosperity of society.

Jason:

It’s just that everybody wants their little piece of the pie, you know, they don’t really, they don’t really worry about the bigger picture. You know, the welfare state will collapse. That’s just too big for, at least,  most people at least on the left to think about. They want their goodies.

Dan:

I think you’re right in many case, but I’m going to be a little bit more optimistic here. At least what I’ve seen over the last several years when I’m giving speeches around the country, when I’m doing especially call-in radio shows, and getting feedback from people and even when I’m up on capital hill talking to politicians and their staff, I think people have, to some degree, incorporated in their thinking, look what’s happening in Europe, look at countries like Greece and Italy, and Spain, and France beginning to collapse. We can’t do that. People understand that our population is aging, the demographic are pointing against us, and that makes it all the more important that we begin to reform government spending, we begin to lower tax rates and try to make the country more competitive.

Jason:

Yeah, no question about it. Dan, you mentioned Europe and Spain and Greece and Portugal, you know, there’s so many issues and challenges there. What are your thoughts? I mean, Greece, gosh, will Greece ever get back on track or is that country just pretty much slated for a revolution?

Dan:

I’m very worried about the long run outlook in Greece, not because mathematically it’s impossible for them to write the ship, any country at any point in time can make fiscal progress as long as they follow my golden rule, which is simply to have the government grow slower than the private sector. However, whatever the odds that that can be achieved, for decades the Greek people and this, of course, is a problem all throughout Europe when people have been told that it’s government’s job to take care of them. Sooner or later as more and more people climb into the wagon of government dependency and there are fewer and fewer tax payers who can pull the wagon the entire system grinds to a halt and yet all these people sitting in the wagon, they don’t have any concept.

It’s been sort of taught out of them by the political class that you have to produce if you wanna consume. So, will the Greek ever vote for Margaret Thatcher or Ronald Reagan? Will they ever take the steps necessary to put their country back on a good track? So, I don’t think that there’s a mathematical problem in fixing the problem in Europe, I think there’s a political culture problem, a dependency mindset problem that makes it a very, very uphill battle.

Jason:

Yeah, no question about it. So, let’s compare and contrast that to the US then. I mean, do we have a mathematical problem? It sure seems so when you look at the unfunded entitlements coming at us over the next 15 years or so. I don’t know if there’s enough tax revenue to get even if we tax the rich 100%, you know. What are we going to do? Are we just destined for massive inflation due to this debt or will technology, I think technology could kind of save us, but what are your thoughts on future for the US?

Dan:

If you look at the forecast whether from the government accountability office, the congressional budget office, anybody that’s crunching the numbers on the US, we are basically going to become Greece if we don’t change government policy. Now, the good news is we have a little bit of time and I underscore a little bit of time. We’re 10 or 15 years behind some of these European countries in terms of the long marks towards dependency.

However, if another four years goes by, another eight years goes by, and we don’t make these changes and we begin to get to the peak years of the baby boom generation’s retirement, I worry at some point just like in Europe there’s a tipping point where there’s just so much government dependency and the political culture changes enough and people no longer understand that you have to produce before you can consumer.

We could wind up in the same situation. I don’t think that’ll happen, because I do think as we talked about before that a lot of people, even some of the politicians in Washington that things have to change, but it is certainty not a gimmie that we’re going to stop the problem, so there is an educational mission for people like you and me. There is an awakening that’s needed on the part of the American people and we do need at least some responsible politicians who are willing to tell the truth and to do the right thing.

Jason:

No question about it. With this level of debt though, I’m really surprised we haven’t seen more inflation. What are your thoughts on that?

Dan:

That’s a mystery! We had so much easing and so much liquidity pumped into the system. Now, part of it, of course, has been sterilized by the banking system. They’re keeping all these excess reserves of the fed. Part of all this liquidity I think has been steered into financial markets and it’s quite possible we have a bit of a bubble that might come back to bite us in the rear end if it pops.

So, I don’t know. If I knew the answer to that question, I’d be investing money and I’d becoming rich, but here’s, I guess, one optimistic answer to part of your question. Yes, we have a lot of debt right now, but our debt as a share of GDP is still well below where it was at the end of World War Two and if we can simply follow my golden rule of having government grow slower than the private sector, that means in relatively short period of time, we could balance our budget and our debt would begin to fall as a share of GDP again.

It’s really all about the trend lines. Are you growing 2%, 3% or 4%? That has enormous implications for a long run living standard. Is government growing 2% and the private sector growing 4% or is it the other way around? If it’s the other way around, we’d become Greece.

So, I think, we need to keep our eye on the ball and the eye on the ball means we have to focus on the long run tapping of the growth of government spending, we restrain the burden of governments so it grows slower than the private sector. If we do that, a lot of problems will be solved, but if we follow the path of Greece and France and let government grow faster than the private economy, then frankly, no amount of taxes will save you. It’ll be like a dog chasing its tail and we’ll eventually wide up with fiscal collapse.

Jason:

Yeah, we certainty will. So, tell us about how that trend like has been and I like your golden rule a lot, by the way. The private sector needs to go faster than the government sector and obviously that hasn’t happened lately, at least in the past, you know, several years, what’s that trend line been like over the past few decades?

Dan:

Over the long run, every since World War Two, the government has been growing a little bit faster than the private sector and that’s why the burden of government spending as a share of GDP is higher today than it was after World War Two.

However, inside all those decades, there’s some fascinating stories. We made a little bit of progress during the Reagan years after of course moving in the wrong direction under Nixon and Jimmy Carter, then under the first President Bush, government grew, but then it actually shrank, not in nominal terms, but as the share of GDP, it shrank under Bill Clinton and then it grew a lot under Bush and during the early Obama years, but ever since the Tea Party election in 2010, government hasn’t grown nearly as fast. All these battles over bet limits and sequesters and government shut downs, they’ve actually paid off in the sense that government spending has grown at a much slower rate.

Now, is this just a temporary low? Is this sort of like a false victory? Is government now going to be exploding in size again? You know, frankly, a lot of will be told by what happens in the 2016 elections.

Jason:

Yeah, it sure will, it sure will. Well, good. Give out your website, if you would. Tell people where they can learn more about your work.

Dan:

Well, the Cato website is just cato.org and you can see all the work of all our scholars. I have a blog and the simplest way to get to it is just go to some search engine and just time in Dan Mitchell blog. It’s called International Liberty where I write primarily on fiscal policy issues, but I also cover a lot of other economic and philosophic issues relating to the relationship between individuals and the state.

Jason:

Excellent, Dan, any closing thoughts?

Dan:

I guess the massage is very simple. If we think we can live off the government, we are repeating the mistake that Bosnia warned about more than a 150 years ago, which is that the great fiction of government is that everybody can live at the expensive of everybody else. We have to be responsible for ourselves, we can’t view government as a sugar daddy.

Jason:

Very well put, very well put. Dan Mitchell, thank you so much for joining us.

Dan:

Thank you.

Because you listened to this post you might also try...

Related Posts