Thursday, May 31, 2012

Economic Insanity

Recent polls suggest that on the economy voters are split 50/50 on whether Romney or Obama would be better as president.  Near as I can tell this is a reflection of the greatest con job since PT Barnum or Ponzi himself.

It's part and parcel of a grand con job that started with Reagan and trickle down economics but has spread into the great lie that all taxes are bad.  All taxes retard business activity and dampen economic growth.

This starts with a kernel of truth.  Too much taxation can cause business to move operations or not expand.  However, the kernel does not blossom into all taxes being bad, which is where Romney is.  Furthermore, taking business tax and equating it with income tax is a sleight of hand that only cause concentration of wealth in the hands of a few.  Wealthy income earners are not businesses creating jobs, unless you count their personal servants. 

Jobs are created by businesses.  On the small business side these are often individuals, but their personal income and business income, while tied to one another, are not synonymous.  Money generated by the business can be returned to further investment in the business or to the personal income of the individual.  If the business is so profitable that the individual becomes wealthy, that is, is able to sit on large sums of money, it's in the broader interest of the society that such concentration be spread out.  Taxation encourages that person to put more money into growing the business or into charitable endeavors that benefit the larger population, as both lower the taxes that the individual pays.  If the person decides to do neither and pays the taxes instead, the money is also spread to a wider use.

Frequently the argument from the proponents of concentration of wealth comes down to this: "No one will want to become wealthy if the tax burden is X.  Everyone will want to be poor because all the money is being distributed to the poor."  Here's the thing.  No matter how much money is given to the poor, they're still poor.  That's because money isn't given directly to the poor.  The money is used to provide opportunities, such as education and housing, or to provide staples, such as basic food that WIC provides.  It's not even low middle class level of provisions, though.  No one wants to stay at that level (unless they're fulfilling the Lazy and Stupid Theory).  Most just have no knowledge of how to get out of it. 

Conversely, the taxes that hit the wealthy are on a small percentage of very high income earners.  They still have so much money left over that they can afford luxury goods and still have money to spare in large quantities.  No one is going to want to give that up for some government assistance programs.  That would be an extreme example of the Stupid part of the Lazy and Stupid Theory if it were to happen.

Despite all this, the GOP has managed to sell half the voting population on the idea that its in their interest for the 1% of the wealthiest earners to keep as much of their money as possible so that that 1% can create jobs.  Never mind that money that comes in as income isn't used to create jobs.  If the wealthy have more money to buy more toys, in some mysterious way a job will be created for you, the 99%.  Oh, sure, it probably will be at Wal-Mart as a greeter, but it's a job and you should be kowtowing to the 1% for giving it to you.

Economic insanity.  Doing the same thing (cutting taxes for the wealthy) over and over but expecting different results (less concentration of wealth in the hands of a few).  Ever since Reagan the GOP has been selling this policy and nothing has ever trickled down to the rest.  In fact, the other arm of the GOP plan is to provide even less government services for the rest of us.  The only thing they want to maintain is the military to protect the 1%'s assets around the world. 

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