British Prime Minister Gordon Brown called for tax cuts today to stave off the global economic crisis. I find this particularly interesting for two reasons. Firstly, it strikes me odd because Gordon Brown comes from a socialist labor party, the party of unions and big government, and secondly, because our own President Elect calls for precisely the opposite. I know he says he wants to cut taxes for 95% of Americans when only 67% of Americans pay taxes, but you can't cut taxes for people who don't pay them in the first place, and you cannot fund his massive initiatives without raising taxes somewhere.
The Democrat party thinks that more regulation, oversight, and taxes will save the economy. As I maintained just after the election, this type of economic policy will bankrupt the country and destroy the party hegemony in the 2010 midterm elections. Gordon Brown has it right. Put money back into the pockets of the productive class of people, and the economy will recover. While some may horde the money, others will put it back into circulation which will keep people employed, keep goods moving, and generate tax money.
Adam Smith spoke at length about the productive sector in his book The Wealth of Nations. In contrast to the ruling aristocratic class, which finds itself represented in America by the rich and powerful including politicians, the productive sector creates with the money they earn reasons for monetary transactions. The aristocratic class is far more likely to spend their means in things of negligible value to society, in bread and circuses and riotous living, which are spent and have an end. All they do is eat and poop. Unless you can find a use for human feces, the aristocracy's appetite serves society very little.
Government policy on taxes reflects the same fallacy as that which caused the mortgage crisis. You restore solidarity by freeing up the market, not by further abuses and usurpation. Taxes work the same way as money being lent. Since a bank must only keep 10% of the deposit money in the coffers and may lend the other 90%, if I deposit $100 and they loan $90 to someone else, who buys $90 of good with it which a business deposits and that bank loans $81 to someone else, my original deposit of $100 has multiplied in value many times over. It represents $271 so far of value to banks as well as $90 worth of goods and services, or 3.6 times its original value. Tax money likewise accrues every time someone moves the money from one hand to another. When we earn it, we are taxed. When we spend it, we are taxed. If we save it, we are taxed. If we inherit or bequeath it, they collect taxes.
Money in motion makes more revenue. No matter whether you are a bank or a business or a regular Joe the Plumber or even the Treasury itself. Money in the treasury does not make more money. Give it back to us. We know what to do with it. I don't care what Obama and his starry-eyed psychophants say- the Average American makes better use of a dollar than the average politician, bar none.
The Democrat party thinks that more regulation, oversight, and taxes will save the economy. As I maintained just after the election, this type of economic policy will bankrupt the country and destroy the party hegemony in the 2010 midterm elections. Gordon Brown has it right. Put money back into the pockets of the productive class of people, and the economy will recover. While some may horde the money, others will put it back into circulation which will keep people employed, keep goods moving, and generate tax money.
Adam Smith spoke at length about the productive sector in his book The Wealth of Nations. In contrast to the ruling aristocratic class, which finds itself represented in America by the rich and powerful including politicians, the productive sector creates with the money they earn reasons for monetary transactions. The aristocratic class is far more likely to spend their means in things of negligible value to society, in bread and circuses and riotous living, which are spent and have an end. All they do is eat and poop. Unless you can find a use for human feces, the aristocracy's appetite serves society very little.
Government policy on taxes reflects the same fallacy as that which caused the mortgage crisis. You restore solidarity by freeing up the market, not by further abuses and usurpation. Taxes work the same way as money being lent. Since a bank must only keep 10% of the deposit money in the coffers and may lend the other 90%, if I deposit $100 and they loan $90 to someone else, who buys $90 of good with it which a business deposits and that bank loans $81 to someone else, my original deposit of $100 has multiplied in value many times over. It represents $271 so far of value to banks as well as $90 worth of goods and services, or 3.6 times its original value. Tax money likewise accrues every time someone moves the money from one hand to another. When we earn it, we are taxed. When we spend it, we are taxed. If we save it, we are taxed. If we inherit or bequeath it, they collect taxes.
Money in motion makes more revenue. No matter whether you are a bank or a business or a regular Joe the Plumber or even the Treasury itself. Money in the treasury does not make more money. Give it back to us. We know what to do with it. I don't care what Obama and his starry-eyed psychophants say- the Average American makes better use of a dollar than the average politician, bar none.
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