To next year’s president: Slash government

my Trade Tripper column in the 11-12 December 2015 issue of BusinessWorld:

Last Dec. 2, I spoke at the University of Asia and the Pacific’s Business Economics Club 2015 Year-end Business Economics Briefing. The theme this year was “2016: New Normal or New Mediocre.” It was apt, coming off a horrible 2015, even by merely using policy direction as sole standard.

And if public commentator Ben Kritz is to be believed, 2016 promises to be an annus horribilis. An assessment I happen to agree with.

In any event, the point I wanted to make in the Briefing was essentially threefold:

• Our foreign policy must flow from an effective domestic policy, for which experienced well trained leadership is vital;
• The traditional family institution must be protected for its vital social benefits, as well as economic significance and overall effect on the common good; and
• The need to cut back on government and put more responsibility (and choice) to the people.

Of the first, I need not dwell on, it being previously discussed in other articles for this column. What will be said is that many critical challenges will be faced by the next administration (perhaps so intended by the current one): managing a likely legal victory over China at The Hague in relation to our sea claims, a Moro Islamic Liberation Front disgruntled over perceived noncompliance of a possible implementing legislation with the Comprehensive Agreement on the Bangsamoro, and the ramifications of public courtship (as what happened during the Asia-Pacific Economic Cooperation meeting in Manila) for the Trans-Pacific Partnership over the Regional Comprehensive Economic Partnership.

On the second, I refer the reader to “Strong Families, Prosperous States: Do Healthy Families Affect The Wealth Of States?” (W. Bradford Wilcox, Robert I. Lerman, and Joseph Price; American Enterprise Institute, 2015):

“Higher levels of marriage, and especially higher levels of married-parent families, are strongly associated with more economic growth, more economic mobility, less child poverty, and higher median family income at the state level in the United States.”

Furthermore: “Violent crime is much less common in states with larger shares of families headed by married parents, even after controlling for a range of socio-demographic factors at the state level... This is noteworthy because high crime rates lower the quality of life and real living standards and are associated with lower levels of economic growth and mobility.”

Hence, this column urges people to vote for candidates that will do away with nonsense such as government subsidized contraceptives, gay “marriage,” divorce, and euthanasia; and instead support those that uphold the traditional marriage and the family. It’s really the socially and economically sensible thing to do.

On the last, it is really urged by this column (and will be a theme repeated throughout 2016) to move away from the paternalistic, socialistic form of government that crept over the country through the decades.

It comes with a cost: a proposed 2016 national budget ballooned to P3 trillion, representing a whopping 461% increase from 2000 and a nearly 300% from 2006. Add to that a nearly P6-trillion national debt.

And this will not be solved by better tax collection or increased personal income tax. Regarding the latter, as John Mangun pointed out, any non-insane increase would still only constitute 14% of the national budget.

The point is that whatever way our government goes regarding tax increases, a budget deficit will still result.

No. The best way for the Philippines moving forward is to really start cutting down the size of government, which now is a humongous 25% of our economy.

Right now, our welfare expenses (using the 2015 budget as benchmark) add up to 64%: this includes programs such as socialized housing, climate change, social protection such as the Conditional Cash Transfer, health care, and employment.

These are fine. But we’ll be far better off allowing the bulk of the responsibility to be shouldered by the private sector.

Cut the size of government, lower spending, lower taxes, allow people to keep more of their hard-earned money, and give them the power to choose which health care, school, business, etc., they want.

Cut the bureaucracy and allow our citizens the power to open and close up businesses as is needed, to hire and fire people, and give incentives for them to share their wealth (such as donations to charity) rather than coercively taking money through taxes.

Such policies are more democratic and empowering of Filipinos.

On the other hand (and again using the 2015 budget as benchmark), on the one job that government is really supposed to do, which is national security, we allocated only a mere 4.4%.

In a world where terrorists and secessionists abound, this is patently not enough. Increased military spending and beefing up our civilian police force should be encouraged.

Clearly, these things cannot be achieved overnight.

But those looking to vote in the next elections would do well seeking candidates that put their trust in the Filipino, encouraging personal responsibility, rather than in fat paternalistic bureaucracies.