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Friday, March 05, 2004
I know Kerry has to say things that sound good but that are essentially stupid in order to get elected, but let me ask you this. I see Kerry on TV all day screaming about the lost jobs in Bush' economy. Today he sarcastically complained that bush "only created 21,000 jobs this last month." So the qesution is, which of the two basic cornerstones of Kerry's stated economic policy will create the 3 million jobs he's promised...tax increases? or trade protectionism?
Just asking.
posted by LT2 6:54 PM ET | discuss | link
Thursday, March 04, 2004
Imagine a poor single mother, living in a rundown apartment building in Queens. She wants to do something to improve her life and she finds herself looking at the different plans being promoted by the various candidates for President, and wondering "which of these will do the most good for me and my child?"
The Democrats are advocating raising taxes on the rich and sending that tax-money to the poor in the form of increased social programs. That sounds pretty good. Lower taxes on her, higher taxes on the bastard rich... sold! She's voting for Kerry.
But wait... might there be a better option?
Realistically, she doesn't pay any income tax, so there's no tax cut in the world that can make a fundamental difference in her life. Tax revenues can do a little bit to improve her day-to-day life in terms of social programs, sure, but Government can't provide her with a permanent solution to her poverty. So what can?
The American private sector can!
If, instead of focusing on how taxes can be cut on people like our poor single mother from Queens (they can't), let's see what happens if you cut taxes on a "rich corporation." Well, for one thing, tax revenues immediately go up (it's too long a story to explain how one dollar taxed is one dollar, but one dollar not taxed results in a future tax revenue of much more than one dollar, but trust me, it does). For one thing, that additional revenue can be poured back into those over-stretched social programs.
But more importantly, in addition to that, those "rich" corporations now have more money available to invest in growing their businesses. And when they put all that money back into the business to fund R&D or expansion or new hiring, you get all kinds of upsides. Low-end upside, maybe all it means is they can hire one more secretary or entry-level whatever (our single mother could get that job), but on the high end, maybe they come up with a whole new, ridiculously lucrative model for a whole new business and not only does our single mother get a job, but she shares in profits, or gets stock options, or gets a fantastic child care and health plan package, who knows?
And the really great thing about the private sector is that the tax reduction doesn't even have to generate new business in the corporation that gets the cut to do our single mother some good. It could be as simple as Bank Of America increasing their margins by getting to handle and invest the additional income from Corporation A and using that extra income to open a new branch, where our mother gets a job as a teller. Such is the power of the future value of money not seized by the government.
The point is that ONLY private industry has that kind of power to grow economies and lift people up. Government does not. Never has, never will. So if what you're trying to do is improve the lives of those less fortunate, the chances of that happening are much larger if the money is in the hands of private industry than it is if the money is in the hands of government (where the chances are exactly zero%).
That is the essence of Reaganomics... or "Trickle Down theory" as those who callously disregard the well-being of those less fortunate in the pursuit of winning campaigns, like to call it.
posted by LT2 12:58 PM ET | discuss | link
As an election issue, what the Christ we're gonna do about Social Security is more important than any other issue facing the nation right now... and yet listen carefully over the next 8 months. Beyond "we need to fix social security" you won't hear either candidate say a single concrete thing about how they might want to do that. Actually, check that, you'll hear Bush say he wants to allow for private investment of social security witholdings... which I think is a great idea... but that's essentially no better than having no plan at all because the Blue Hairs, with their accomplices in the Democratic party, will never let it happen. Read George Will's depressing assessment.
posted by LT2 12:49 PM ET | discuss | link
