- The Washington Times - Friday, October 27, 2000

Al Gore promises that, if he is elected president, he will create a new program to reward people for saving

some of their paychecks. Allowing politicians to get involved subsidizing private savings makes about as much sense as putting a convicted child molester in charge of candy distribution at an elementary school.

For couples with income below $30,000, Mr. Gore proposes for the federal government to give them $3 for each $1 they save. For couples earning from 30,000 to $60,000, Mr. Gore wants the feds to match dollar for dollar and for couples making $60,000 to $100,000, Mr. Gore proposes the feds provide $1 in savings for each $3 they deposit. For all three groups, the federal match would top out at $2,000 a year. Economists estimate the new subsidy could cost $150 billion a year.

A Gore campaign book proclaimed: "The principle behind these accounts is simple. We should give help to hard-working Americans who want to save." A Gore campaign press release bewailed that "the personal savings rate has fallen by half over the past decade." The heavy burden of federal taxes is a major reason why people save less. Federal income tax revenue doubled between 1992 and 2000. The total tax burden on the average family with two earners rose 3 times faster than inflation.

However, according to the Gore view of the world, taxation could not possibly be part of the reason since government action could not possibly have any negative effect on anyone (except for large pharmaceutical companies, and they get what they deserve).

Mr. Gore perennially describes his savings subsidy scheme as "generous." One could easily get the impression the savings match is actually coming out of Mr. Gore's own pocket. Actually, it is more akin to the generosity that a mugger might show when he allows you to keep one credit card after he steals your wallet at gunpoint.

Mr. Gore's rhetoric is another attempt to make citizens see government as a father figure as an all-wise, all-caring entity far more concerned about citizens' future than are citizens themselves. Maybe Mr. Gore will next propose that anyone who saves at least 3 percent of their earnings will receive a year's supply of lollipops and that if someone saves 5 percent of their salary, they win a federally paid trip to Disneyland.

The combination of taxation and inflation destroys incentives to save for most Americans. Mr. Gore assumes that people are so stupid they do not respond when they are being taxed like serfs and so greedy they will scramble at any offer of a handout even if it a only a pittance of their tax payments being returned to them. Mr. Gore's savings proposal is classic political sadism-masochism assuming that politicians are entitled to simultaneously punish and reward the same behavior.

Mr. Gore's proposal probably does strike many Americans as generous. But do you really want to enter into a partnership with an 800-pound gorilla with a bad temper?

Naturally, Mr. Gore promises the funds in people's savings accounts would be their own money with no political risk. Ironically, this is the same message that the Social Security Administration initially promulgated and we know what politicians have done to those "individual accounts."

Even if Mr. Gore were trustworthy, there is nothing to bind future presidents and Congresses from dictating how people will use their subsidized savings accounts. When the federal government again has large budget deficits, politicians could compel citizens to use their subsidized savings to buy U.S. Savings Bonds regardless of the miserable rate of returns the bonds might provide.

One certainty is that federal policies over the subsidized savings accounts would not be covered by the kind of banking fraud laws that govern private savings accounts. Thus, politicians would be under no constraint to deal honestly with the people they purport to help. (Thank God for sovereign immunity.)

The Supreme Court ruled in 1942: "It is hardly lack of due process for the government to regulate that which it subsidizes." Tax policy has been the single largest force in undermine the independence and self-reliance of the average citizen, and tax revenues have been the driving force in buying submission.

To assume that subsidies do not subvert liberty is to believe that politicians do not like power. It is only a question of time until some politician or some bureaucrat finds it in their interest to exercise the power latent in the subsidy. The expansion of subsidies guarantees the expansion of political power.

Rather than a new government subsidy, perhaps we need the equivalent of a "Megan's Law" a publicly posted list of politicians who have subverted savings in the past and thus must never be allowed to get within five miles of private bank accounts.

James Bovard is the author of the just-published "Feeling Your Pain: The Explosion & Abuse of Government Power in the Clinton-Gore Years" (St.Martin's Press).

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