Thomas Sowell recently asked this pertinent question in one of his columns: “When somebody writes you a bad check, who do you get mad at, the bank who refused to cover the check, or the person who wrote it?” Our government has been writing us bad checks for decades. Promising us a bag full of goodies from the public largess, and convincing us that said bag of goodies was in fact free. what we as a nation should have known, and are just now learning, is that the cost for the bag of goodies was merely shifted to some unknown time in the future. I would like to now introduce you all to the future. The bill has come due, and it is massive. For those of you, about half of the country I believe, who still think that the government is some magical entity which has an unlimited source of fund with which to pay for its entitlement schemes, I must remind you that the government, no matter how hard the bureaucrats may actually be working, produces nothing. The government’s source of funds is only what it is able to confiscate from its citizens, us. Any dime in public benefit, was taken from a private citizen, and subsequently redistributed. At the risk of sounding politically incorrect, this is the very definition of Socialism. These schemes have proven disastrous in every single nation where they have been tried.
On Friday, we had a last minute deal made avoiding a government shutdown. Hooray, (sarcasm intended.) Our government has shut down before, and not a single senior citizen, small child, or puppy dog was destroyed as a result. On the other hand, Americans not working in the Federal System by and large did not really notice. According to a Rasmussen Poll conducted in the 1990’s, it was discovered that a negligible amount of people outside of the news media and the growing public sector workers were affected at all due to the government shut down. So, to sum up, no matter how hard bureaucrats may or may not be working, their level of productivity is hardly vital to their fellow citizens. That being said, something has happened which has not happened since 1995. The debate has shifted our way a bit. This past weekend, Our President has finally allowed himself to peek into the real world, outside of fantasy land, for just a moment. He sent his advisor David Plouffe to several of the Sunday talk shows to make this telling, if somewhat bizarre statement. “When it comes to entitlement reform, the President is going to use a scalpel, and not a machete.” This statement is telling in that we now know the President has accepted, grudgingly, the fact that entitlements will be reformed. Hooray, (a little less, but still there, amount of sarcasm intended.) It is bizarre in that, keeping the apropos medical analogy theme going here, what good is a scalpel going to do anyhow? Our patient, the U.S. economy has cancer. Over 67% of the patient is now cancerous mass. She needs to consume 40% of her body weight in toxic chemicals to survive. (The toxic chemicals would be our increasing debt.) to leave the medical analogy for just a moment, cutting a Million here and there is not going to do anything to help us now. We need leadership from our President, and not more platitudes and gimmicks.
I also heard from Mr. Plouffe that the President will be unveiling his plan to fix the fiscal insanity on Wednesday. Here is my prediction for what will be the main crux of this plan. We are going to soak the so called rich, and tax the snot out of any wage earner making more than $250,000 per year. For those of you who have not done this simple mathematical exercise let me lay it out for you. If our government confiscates every penny earned beyond its threshold of $250,000 per person, and maintains its current tax rates on everyone else, the deficit would still be close to a Trillion. That also assumes of course that the so called rich stayed here, in a country where they are so despised that even its President has been on T.V. demonizing them.
Since the President, nor any of the Democrats have apparently taken a single economics course since Maynard Keynes himself that his conclusions were in deed disastrously wrong, I will state the already proven effects of the Laffer Curve. Taxation has a diminishing effect past its optimization point. What this means, is that once optimal revenues are confiscated by the government, raising taxation rates actually serves to lower revenues to the fed. An example for this will not take long to find. Bush 43 lowered tax rates, and the revenues collected by the IRS actually increased. The Bush tax cuts are incorrectly named. They were tax rate cuts which resulted in a tax increase. George Bush is not the first President to embrace Laffer, as Kennedy, and Reagan also made use of this curve. So, my further prediction about the soon to be unveiled Obama Plan is that he will assume that his rate increases will produce an increase in revenue collected, and he will be dangerously wrong. The fact is that I must believe that the Democrat politicians do understand the Laffer Curve, and that these tax increases represent not a means to close our deficit, but a means to effect control over a population. After all, people will not give up the lifestyle they desire and have earned in order to live the government approved proletariat lifestyle if they can afford not to. In order to pursue this worker’s paradise that Obama wishes to inflict upon the American People, he needs to take choices away from us by means of punitive taxation and overbearing regulation. The only way he can get Americans to accept this, is to promise a bag of goodies to us from the public Largess.
Enjoy Iowahawk’s math again as presented by Bill Whittle. Why robbing from the so called rich will not work.
Crossposted at Musings of a Mad Conservative.
Tags: Fiscal Budget
