The Problem with Mandatory Voting (Video)
Fox Business’ Kennedy spoke with Peter Schiff about President Obama’s praise for a mandatory voting system. Peter argued that mandatory voting doesn’t automatically lead to better government, because people won’t necessarily be making informed decisions. What’s worse, mandatory voting could only be enforced with monetary penalties, which would just become another tax burden. Kennedy and Peter also discussed why the United States needs to experience a recession for the economy to truly grow out of the problems created by the Federal Reserve’s monetary policy.
Follow along with this partial transcript:
Peter Schiff: Well I think it’s a horrible idea, and I would have thought up until Obamacare that it would have been unconstitutional. But now I guess anything goes. I suppose they can pass a tax for not voting, and if you don’t have proof of voting, I guess the IRS can get you. If you don’t pay taxes, maybe they can garnish your welfare check or your food stamps or something if you don’t have proof that you voted. The last thing we want to do is force people who couldn’t care less about the outcome of an election to actually vote, because they’re not going to make an informed vote. They’ll just go eeny, meeny, miney, moe. Why do we need people who aren’t informed? I’d just as soon those people stay home and not vote.
Kennedy: [Why are we putting our freedom in the hands of people who aren’t informed? Also, it’s bad policy to financially penalize lower-income Americans for not voting.]
PS: The idea is not to have everybody voting, the idea is to have good government. If we have better government with fewer voters, then everybody wins. If you look at our best legislators, go back and look at the Founding Fathers and the first Continental Congress, very few Americans voted for them but we had a much higher calibre. People used to actually pay to vote. They had property qualifications, poll taxes. We had very few people voting, yet we had much better legislators and much better government which benefited everybody, even the people who don’t vote. But now, everybody is voting but we have lousy government, we have all these taxes, all these regulations, and everybody is suffering.
K: [Do you agree that people can’t complain about government if they didn’t vote?]
PS: Not really. It depends on where you live. Maybe if you live in a swing state, where the elections are close, maybe. But if you live in a state like California, even if you’re a Republican, there’s nothing you can do. There are so many Democrats that are going to cancel out your vote. I think it’s funny when you have a husband and wife, and one is Republican and the other is Democrat, and they drive to the polls together to cancel out each other’s vote. They might as well stay at home, it doesn’t accomplish anything.
K: Should the Fed raise rates, keep them the same, or is the Fed better off dead?
PS: The Fed has been artificially suppressing interest rates. We should let the market set interest rates, and then of course, rates would be a lot higher, and then the bubble economy that she [Janet Yellen] inflated would burst. That’s what she doesn’t want to happen. She didn’t say she was going to raise rates. She just said it was possible that she might raise rates. You know, anything is possible. An alien apocalypse is possible. But nothing’s going to happen. It’s not very probable. Yellen just wants to pretend that she’s going to raise rates. The truth is that she’s afraid to raise rates because the economy will collapse because it’s not a real recovery. It’s just a big bubble and she doesn’t want to pop it.
K: Do we need a recession to actually recover?
PS: Unfortunately, we do…
K: How do you sell that, though, to people who are still hurting financially?
PS: Well they’re going to hurt more if you delay the day of reckoning. But the problem is, when you keep interest rates artificially low, and now they’ve been at 0 for 6 years, you create problems where mistakes are made and there are misallocations of resources. People do stupid, foolish things when rates are too low. It’s not until rates go back up that you realize the mistakes that were made. Now the market has to correct them. Correcting the mistakes that the Fed forces us to make is painful. A recession is part of the healing process that we badly need, but by postponing it, you make all the problems worse, and the ultimate resolution is that much more painful.
K: You heard it here first, bad [economic] choices as a result of 0% interest rates.
PS: Well, on Wall Street in particular, but a lot of people are buying stuff with money they don’t have. You borrow a lot more money when it’s free, and you’re not going to save any money if… your savings account is 0. A lot of malinvestments, that’s the economic word, happens when rates are too low. When rates were too low last time around, Greenspan kept interest rates at 1% for a year, year and a half. We got the housing bubble and the financial crisis. Imagine, this is much worse. We’ve kept interest rates a lot lower for a lot longer.
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