Thinking outside the box, or the Constitution?
Initial disclaimer: I am no expert in economics or the law of eminent domain, so I welcome any feedback from more knowledgeable individuals on the following comments. Two interesting, and in my mind, related stories ran side by side (unintentionally, I think) in the Lexington Herald-Leader on Wednesday. Both, I believe, demonstrate the danger of slipping too far away from the nation's first princples, and the authority granted in the founding charter.
The United States Supreme Court on Tuesday heard arguments in a major case involving the government's power of eminent domain. The Takings Clause of the Fifth Amendment states, "Nor shall private property be taken for public use, without just compensation." According to this summary, "At issue is whether governments can forcibly seize homes and businesses, for private economic development. Under a practice known as eminent domain, a person's property may be condemned and the land converted for a greater 'public use.' It has traditionally been employed to eliminate slums, or to build highways, schools or other public works. The New London case tests the muscle of local and state governments to raise what they see as much-needed revenue, which they argue serves a greater 'public purpose.'"
More commentary is available at The Volokh Conspiracy and Professor Bainbridge, which I won't rehash. But some of the questions asked by the justices, and answers given by the attorneys, are disturbing. "If a city wanted to seize property in order to turn a 'Motel 6 into a Ritz-Carlton, that would be OK?' Justice Sandra Day O'Connor asked. 'Yes, your honor, it would be,' Horton [the city's attorney] replied." According to the New York Times, "When Justice Breyer asked him whether a taking should at least have to meet a test of 'reasonableness,' he said no, adding that the city was, after all, not simply appropriating the property but paying fair market value for it." Justice Scalia, however, commented that "You are paying for it, but you are taking it from somebody who doesn't want to sell."
The second story that caught my attention was the idea floated by former Treasury Secretary Paul O'Neill to have the government give each child born in the United States $2000 in an investment savings account, with the government contributing an additional $2000 each year until the child turns 18. At that point, the money would remain in the account and allowed to grow at a compounded rate until the individual reached age 65, when an annuity of $82,000 per year would be paid for the next twenty years. In theory, if the accounts earn 6% interest, by the time the individual is 65 there would be just over $1 million in the account to provide the annuity. This has led many headlines to boast that the plan would make every American a millionaire at retirement, although if the money is considered in 2070 dollars, or even in today's dollars, I would not consider myself a millionaire if I was getting $82,000 per year. That's Al Gore math.
I heard a caller to a radio program comment about how O'Neill should be commended for thinking outside the box about how to address the looming Social Security problem. Thinking outside the box is one thing; thinking outside the Constitution's enumerated powers for the federal government is something else entirely. Nothing in the Constitution permits the federal government to give retirement accounts to citizens. The structure of the government is not a self-supporting entity; it is not an independent income producer, but is dependent primarily upon tax revenue to subsist. The last seventy years of welfare-state mentality, however, have probably blinded many Americans to the proposition that the government is not a parent, and does not owe a comfortable retirement to everyone. O'Neill's idea is reminiscent of Robert B. Reich's proposal to give $60,000 to every high school graduate, which always struck me as asinine.
I thought it interesting that the two stories ran side by side, however, because both illustrate the danger of the government overreaching its defined authority. Is a government taking of private property in order to give it to a private developer a "public use"? It's not as though the city intends to build a school or a road or a municipal building on the property; it's to be given to a pharmaceutical research facility, and the "public use" is actually properly defined as a "public benefit," as the intended use will generate more revenue for the locality. But common sense tells you that there is a difference between a public use and a public benefit, just as a common reading of the Constitution makes evident that the government isn't responsible for providing individuals with retirement accounts. Time will tell if common sense prevails, in the courts or the Congress.
UPDATE: Thanks to Lance at Ragged Edges for the link.
The United States Supreme Court on Tuesday heard arguments in a major case involving the government's power of eminent domain. The Takings Clause of the Fifth Amendment states, "Nor shall private property be taken for public use, without just compensation." According to this summary, "At issue is whether governments can forcibly seize homes and businesses, for private economic development. Under a practice known as eminent domain, a person's property may be condemned and the land converted for a greater 'public use.' It has traditionally been employed to eliminate slums, or to build highways, schools or other public works. The New London case tests the muscle of local and state governments to raise what they see as much-needed revenue, which they argue serves a greater 'public purpose.'"
More commentary is available at The Volokh Conspiracy and Professor Bainbridge, which I won't rehash. But some of the questions asked by the justices, and answers given by the attorneys, are disturbing. "If a city wanted to seize property in order to turn a 'Motel 6 into a Ritz-Carlton, that would be OK?' Justice Sandra Day O'Connor asked. 'Yes, your honor, it would be,' Horton [the city's attorney] replied." According to the New York Times, "When Justice Breyer asked him whether a taking should at least have to meet a test of 'reasonableness,' he said no, adding that the city was, after all, not simply appropriating the property but paying fair market value for it." Justice Scalia, however, commented that "You are paying for it, but you are taking it from somebody who doesn't want to sell."
The second story that caught my attention was the idea floated by former Treasury Secretary Paul O'Neill to have the government give each child born in the United States $2000 in an investment savings account, with the government contributing an additional $2000 each year until the child turns 18. At that point, the money would remain in the account and allowed to grow at a compounded rate until the individual reached age 65, when an annuity of $82,000 per year would be paid for the next twenty years. In theory, if the accounts earn 6% interest, by the time the individual is 65 there would be just over $1 million in the account to provide the annuity. This has led many headlines to boast that the plan would make every American a millionaire at retirement, although if the money is considered in 2070 dollars, or even in today's dollars, I would not consider myself a millionaire if I was getting $82,000 per year. That's Al Gore math.
I heard a caller to a radio program comment about how O'Neill should be commended for thinking outside the box about how to address the looming Social Security problem. Thinking outside the box is one thing; thinking outside the Constitution's enumerated powers for the federal government is something else entirely. Nothing in the Constitution permits the federal government to give retirement accounts to citizens. The structure of the government is not a self-supporting entity; it is not an independent income producer, but is dependent primarily upon tax revenue to subsist. The last seventy years of welfare-state mentality, however, have probably blinded many Americans to the proposition that the government is not a parent, and does not owe a comfortable retirement to everyone. O'Neill's idea is reminiscent of Robert B. Reich's proposal to give $60,000 to every high school graduate, which always struck me as asinine.
I thought it interesting that the two stories ran side by side, however, because both illustrate the danger of the government overreaching its defined authority. Is a government taking of private property in order to give it to a private developer a "public use"? It's not as though the city intends to build a school or a road or a municipal building on the property; it's to be given to a pharmaceutical research facility, and the "public use" is actually properly defined as a "public benefit," as the intended use will generate more revenue for the locality. But common sense tells you that there is a difference between a public use and a public benefit, just as a common reading of the Constitution makes evident that the government isn't responsible for providing individuals with retirement accounts. Time will tell if common sense prevails, in the courts or the Congress.
UPDATE: Thanks to Lance at Ragged Edges for the link.
posted by Hal | 10:28 PM
1 Comments:
Excellent comments on both fronts, Hal. The mentaility of Comfort Entitlement, at any age, is neither Christian nor Constitutional. A link to your post will be up on my site post haste.
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