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Monday, September 06, 2010 |
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It's the Economy, Stupid - 12/22/2009 8:00 PM It’s the economy, stupid. I’ve been saving up for this rant for a while so sit back, as per usual, this won’t be terribly politically correct.The Engine of freedom The United States is great because it can afford to be. We had some brilliant founders who built a system of government based on the Constitution – probably the greatest creation in the history of mankind. But any person can have high ideals – that’s easy. Living up to them is what’s difficult. Someone who would never steal may find themselves stealing a loaf of bread when they’re starving. So much for high ideals. But the United States has stood up to our high ideals, because we could afford it. We could afford it because we established an environment that created the greatest economy in the history of the world. With all this wealth, we could afford our high ideals – high ideals don’t come cheap. Our economy was so vast that it allowed us to fight two world wars, and win them absolutely and without question. Our economy has resulted in the greatest number of inventions and accomplishments mankind has ever seen. We’ve made many billionaires, not because they happened to be sitting on a pool of oil, but because they created products and services people wanted and needed. And those billionaires created thousands of jobs directly and millions of jobs indirectly. Not by themselves, to be sure, but they, and countless others like them have helped shape our economy. I ain’t never got no job from a poor person – and neither did you (I don’t know why using such terrible English just seemed to fit there…) Business is the economic backbone of the United States – our greatest asset that affords us our high ideals. We’ve been attacking business pretty aggressively over the last few decades…making it less and less attractive to do business in the United States….bleeding out our business….and socialism has been advancing. Taking away freedoms and money from our people and business. Spending out of control creating debt we can likely never repay – driving down the value of the Dollar. Government has no money The government does not have any money. It takes money through taxes. I say takes, because we do not freely give it, if you don’t hand it over, you go to prison. That’s take, not give. And the government does have the power to tax, and there is legitimate need for this – however it has been warped far, far, far beyond anything reasonable. So governments take money from it’s people…but that’s not enough! Their appetite for spending is so great that even the most powerful economy in the history of man is not enough for it…so it simply prints more money. The government cannot create anything! It can only take the creations of others and redistribute it. Read that sentence again. How can the government grow the economy? Not by spending more – as our moronic leadership believes – by getting the ^%$! Out of the way of business and people! The problems we experienced recently are primarily caused by the government trying to redistribute wealth. Making loans it had no business making, and encouraging and even regulating business to follow their lead. Businesses do not pay taxes Businesses do not pay taxes….not a cent! They simply collect taxes for the government from you and me, and hand it over to the government. So, Fred has a small company and makes computer keyboards. He has inexpensive keyboards, and expensive fancy ones. He employs five people directly (and there are companies who support him and employee people to help do this, so there are indirect jobs too). Fred’s company buys office equipment, has rent, has machines to make the keyboards, equipment to design the new keyboards, advertises, pays payroll taxes, etc. If all those costs together added up to one million dollars, then if he only sells one keyboard, guess how much it will cost at minimum? Right, one million dollars. That’s assuming he wants no profit for his risk, time, effort, and investment. So in reality, he’ll want 1.2 million dollars. Well, if he can sell two keyboards, well they now only cost $600,000 each…. Well, let’s assume he sells hundreds of thousands of keyboards…so now they’re about $20 each on average. If you raise taxes on greedy Fred, business owner, how will he pay those higher taxes? Well, there are only a few ways….the average price per keyboard is going to go up…and where the market will not support that increased cost, Fred will make cuts. Perhaps he won’t order the new equipment he wanted to order – hurting his long term growth and the supplier who hoped to sell that equipment. Perhaps Fred has to reduce staff…Businesses do not pay taxes, they only collect them from their customers and hand it over to the government – who creates nothing, only takes and redistributes. The Class Envy Game Politicians love to use class envy to pass new taxes. Let’s tax those greedy business men and the greedy rich! Make them pay their fair share (although the top 5% already pay 40% of all taxes)! When you increase taxes on business, you’re only increasing it on their customers – which is likely you and me. Sure, slap another 5% on air fuel….now air travel costs go up by more than 5% because when prices go up, some people will stop/reduce purchasing. So all cargo flights are more expensive, so even if you don’t fly your costs go up because you use products that are flown. Tax the rich! Well, they already pay too much, but you’ll just see they reduce investment/risk, and move their efforts offshore. When the government was setting itself up to own a couple of American car companies…they demonized the presidents of those companies for using corporate jets to appear before Congress… then Congress proceeded to demonize corporate jets on the whole. What a brilliant idea in a bad economy. Who do you think builds those jets? Services those jets? Flies those jets? Landing fees are airports, maintenance and repairs, and on-and-on. An entire industry was attacked in the name of class envy. They tried this with a severe tax on yachts. The result was the rich didn’t buy yachts…and another industry was brought to its knees. Attacking business is a lot like ripping out your organs because you want to lose weight High Treason The President and Congress are just one step away from high treason in my mind. They are pushing through wildly irresponsible spending bills loaded with more pork than anybody can even tally. This President in less than one year has created more debt than George W. Bush’s eight years in office! And he was a big spender too. The attack continues with the new health-care that is being ramroded through despite a clear majority of American’s being against it. It has provisions that specifically cannot be reversed in another bill! This is tyranny! They are not even trying to keep a straight face as they outright lie! They’re toting this as a money saver, and there is not one person on the planet who believes this for one second. All the “savings” that it will create will in fact be expenses and they’ll be ten times higher virtually immediately. What is taking place now is one step away from high treason. How do we fix it? There is no simple answer for this, and I don’t pretend to have all the answers, but I’ll offer a few suggestions that I believe would radically turn things around and moving in the right direction. Pass the fair tax. If you don’t know what that is, look it up. In short it is….elimination of the IRS and federal income taxes. Establish a new national sales tax (perhaps 23%) on all NEW purchases. Buy a new car, pay an extra 23%, buy a used car, NO taxes – they were already paid once! No double-taxing. Buy a shirt, or a loaf of bread, pay 23%...buy a used shirt, no taxes. Buy a new house, yes, 23% sales tax, a used house, no tax. Determine the poverty level, estimate taxes paid on essentials for the poverty level, give EVERYONE a prebate monthly/quarterly to offset the taxes collected on necessities of life. Now you might think, wow, 23% is a lot of money, say a $20,000 car would then cost $24,600. Well, yes and no. See, that $20,000 car today has tons of taxes loaded into the price. Payroll taxes, income taxes, etc. The approximate amount? About 23% (I may be off a tad). So when you take those old taxes out, the price will drop…then when you add the 23% back in, you’ll be about the same price. Now a logical assumption is, well, they won’t drop the price on the car because people are used to paying it, and they’ll pocket it as profits! Well, yes and no. Initially some will try this, but eventually someone with a similar car will drop the price to $19,000 to sell more cars, and it will work, so the guy selling it for $20,000 still will sell less….and will drop his price to $18,500, the other will respond, and before you know it, they prices will be real again. Now, with the fair tax, you can make a million dollars, and pay almost no taxes after you get your prebates….but…when spend, you pay taxes. So if you don’t make a lot of money and are paying bills to survive, you’ll pay virtually no taxes! But, buy million dollar homes, nice clothes, etc…then you pay the taxes. Businesses will flock to the US because the environment will allow them to thrive. This means JOBS!!! We can produce here in the US again, and we’ll have more money than we know what to do with…perhaps even start paying down this treasonous debt. Term LimitsWe have term limits for the President, let’s impose the same thing for Congress. Two terms, you’re done. No more career politicians who gain too much power and are more concerned about themselves than who they were elected to represent. One time to campaign during office…not in constant campaign mode. Among other things this would get “real” people into office. No bumbling fools who know nothing of the real world passing laws for the rest of us. It will also empower them to really do what’s right, without a constant concern of “will I get reelected?” Fight wars to win.War is hell, and clearly you want to minimize the impact on innocents, but we are bleeding our economy and soldiers dry by tying their hands. Iran is a clear threat, it is time to go in there and wipe out everything we see as a threat, enough talking. We don’t need to change their government, install a new one…let’s radically reduce their ability to make war. Nobody much likes us there anyway, so it isn’t like we’ll be hurting how we are viewed there. Same thing in North Korea, let’s just go clean that festering boil out and be done with it. These are real risks to our national security and the security of our allies and friends. Like taking off a band aid…don’t slowly pull it off and be in pain….pull it fast and hard. A big OUCH! Then it’s over, move on. Stay the course. What if we just stay the course we’re on? Well, then people, the very soul of the United States will be mortally wounded. We’ll be dead, but have not hit the ground yet. Everything that made this country great will fade away (it is fading now!) – our greatest days will be behind us, and we’ll linger into obscurity. We’ll be the new France. Irrelevant. The world cannot afford this. The world needs the United States. But they are a victim of the class envy argument, so many don’t understand how they need us. Many reading this (including this author) were not around the last time the United States saved the world. We don’t appreciate that there are real monsters out there, in the making. The only thing standing between them and the world is the United States. Because wherever the monster comes from, the United States will be there to oppose it. Who will save the French when the United States is as irrelevant as they are? Personally, I think it is too late. I do believe the best days are behind us. We have lost touch with what makes America great – we’ve become the new Europe. While there is still a glimmer of hope, the flame is flicking dangerously….don’t think it can’t go out. If we let the flame go out, likely it can never be relit. If it is relit, it will cost countless lives and be as bloody as the last American Civil War. We’re so concerned being politically correct, being socially and environmentally responsible, that we ignore undeniable facts and knowledge. That does not mean those facts and knowledge go away…we’ll pay the price. Socialism is the enemy of the free. High ideals are what this country was founded on, but they are not cheap, to pay for them we need an economy. I find it hard to believe that the United States has come so far, defeated so many nasty foes, to ultimately sit down and chew through our wrists. kcuhC, chuck@kcuhc.com |