The more things change . . .

by Harry Browne

January 14, 1998

No one can reliably predict our economic or political future, because actual events will depend on what millions of different people decide to do.

And yet some political events seem almost certain to occur or not occur in 1998 . . .

  1. Neither the flat tax nor the sales tax will be enacted. By the time the politicians exempt all their friends and keep low-income people off the tax rolls, it will be necessary for the single rate (for either tax) to be 25% or more to raise enough money to finance today's big government. That won't fly politically, and so no tax reform is likely to make it even to the floor of Congress for a vote. Every politician can blame the lack of reform on his opponents making this an issue that benefits everyone but the taxpayer.

  2. The IRS won't be reformed in any meaningful way. IRS abuses are an exciting campaign issue, but no one in Washington honestly wants to change the system. The government can't raise nearly $2 trillion a year without an abusive, intimidating, take-no-prisoners, tax-collection agency. And no politician wants to reduce the amount to be collected, because that means reducing the size of government and hence his own power.

  3. Campaign finance "reform" will make it even easier for incumbents to get reelected. The supposed reforms of the 1970s created enormous handicaps for Congressional challengers. It became much harder for them to raise money and get their messages to voters, while incumbents continued to get free publicity because of their offices. Thus began the era of automatic reelection of incumbents.

  4. There will be no surplus in the 1999 budget. Higher-than-expected revenues suggest there might be a surplus in the 1999 budget (to be enacted this year). But don't hold your breath. If your Congressman looks tired, it's because he's been lying awake nights trying to decide how to squander that surplus. Bill Clinton wants more spending programs for children and to acquire even more public lands to be cared for by the folks who decimated Yellowstone Park. The Republicans want more money for highways, law enforcement, and some meaningless-but- noisy tax cuts. The two parties will have to negotiate their differences; the most likely outcome will be to pass everyone's proposal.

  5. Nothing will be done about the supposed threat of global warming. Despite the intense lobbying by President Clinton, Vice-president Gore, scientists on the government dole, alternative-fuel companies that would profit from new regulations, and plastic surgeons posing as climate scientists, there will be no new controls on carbon dioxide emissions. Your car and air-conditioning are safe for one more year.

  6. President Clinton will survive all the political scandals surrounding his administration. No matter what you might think of his morals or politics, he may be the slickest politician ever to slide down Pennsylvania Avenue. Even if a videotape surfaces showing him with a bundle of checks and missing files in one arm and a woman of ill repute on the other, he'll continue to slip through the net.

  7. Whichever party wins Congress this year, government will continue to get bigger. I know this isn't an earth-shaking insight, but every forecaster is entitled to one easy prediction.

My conclusion: 1998 should be a year with no substantial changes in political direction a year in which U.S. politicians enhance their powers and incumbency, and government continues to grow. In other words, a year much like 1997.

And 1996, and 1995, and 1994.