American Elephants

Economics Can Be Fun: Lesson One by The Elephant's Child
January 29, 2012, 9:42 pm
Filed under: Capitalism, Economy, Entertainment | Tags: , ,

We Are Broke, and Obama Is Leading in the Wrong Direction. by The Elephant's Child

(click to enlarge)                                                    (h/t: Doug Ross Journal)

Does it sink in a little more if it is put in kitchen table terms? We are broke, and no one seems to mind. Our indebtedness, per person, according to CATO scholar Michael Tanner adds up to $189,000 each. The president, when he talks about the problem at all, seems to think that if we just get “the rich” to pay their fair share the problem will be solved.

Janet Daley, American-born columnist for the Telegraph, says that Barack Obama is trying to make the US a more socialist state.  The ideas the President outlined in the State of the Union are based on the very model that is causing the EU to implode.

Mr Obama described his program of using higher taxes on the wealthy to bankroll new government spending as ‘a recipe for a fair, sound approach to deficit reduction and rebuilding this country.’…

Human beings are so much more complicated than this childlike conception of fairness assumes. When government takes away an ever larger proportion of the wealth which entrepreneurial activity creates and attempts to distribute if “fairly” (that is to say, evenly) throughout society in the form of welfare programs and public spending projects, the effects are much, much more complex and perverse than a simple financial equation would suggest. …

There is, it turns out, a huge difference between being provided with a livelihood and feeling that you have earned it. The assumption that all the wealth that individuals create belongs, by moral right, to the state, to spend on benefits or phoney job creation schemes (sorry, public infrastructure projects), is proving phenomenally difficult to expunge in Britain, so ineradicably has it embedded itself in the public consciousness.

Investors Business Daily explains that there are Six Big Myths about the tax code that Obama is spreading.

In his speech, Obama repeatedly turned to the tax code to explain what’s wrong with the country. It favors the rich, he said. It benefits companies that send jobs abroad. It subsidizes the dirty old oil industry. It’s the cause of our deficit problem. And worst of all, plenty of people and businesses aren’t paying their “fair share.” …

The claim that the rich don’t pay their fair share is simply untrue. The current tax code is extremely progressive, more progressive in fact than it was back in 1979, according to the Congressional Budget Office.

As a result, the richest 1% today accounts for 36% of all income taxes paid, while nearly half of taxpayers owe nothing at all, or get cash back.

Economist John B. Taylor offers hope.  A strange and new idea: Individuals should be free to decide what to produce and consume, and their decisions should be made within a predictable policy framework based on the rule of law:

As this election year begins, a lot of people are wondering what we can do to restore America’s prosperity and create more jobs. Republican presidential candidates are offering their ideas, and at his State of the Union message on Tuesday President Obama presented his. I believe the fundamental answer is simple: Government policies must adhere more closely to the principles of economic freedom upon which the country was founded.

At their most basic level, these principles are that families, individuals and entrepreneurs must be free to decide what to produce, what to consume, what to buy and sell, and how to help others. Their decisions are to be made within a predictable government policy framework based on the rule of law, with strong incentives derived from the market system, and with a clearly limited role for government.

This op-ed was adapted from Mr. Taylor’s new book First Principles: Five Keys to Restoring American Prosperity.” 

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