One important difference between the candidates in Friday’s debate was that McCain talked about cutting spending while Obama talked about who would be taxed to pay for his new programs.
But what really matters is how much the government is spending, not who pays the taxes, because ultimately everyone ends up paying. Government spending increases the price of everything we buy and reduces jobs and wage growth.
Businesses large and small must recoup all of their expenses if they are to remain viable. Businesses have to pass their taxes on to the consumer, just like rent, advertising, payroll, etc. It’s the same for your doctor, dentist, lawyer, you name it. The government uses the corporation, business owner or professional as the tax collector or conduit, but we all end up paying.
Regarding jobs and wages, Nobel laureate and economist Milton Friedman taught that every dollar that government spends is a dollar that can not be invested in the private sector to create jobs and increase productivity. Part of this is simple. A dollar paid in taxes can not also be used to pay an employee.
But it goes further. The reason Americans have a high standard of living compared to less developed countries is not because we are smarter or harder working. It is because we have a huge investment in knowledge, technology and machines that allows our workers to produce more per hour worked than workers in less developed countries. Our standard of living is a direct result of what we produce. Every dollar spent on government is a dollar that can not be invested in training, technology and more efficient machines to improve worker productivity. Lower productivity translates into lower incomes and living standards.
Oliver Wendell Holmes said taxes are the price we pay for civilization. Up to a point that is true. But excessive government spending hurts everyone with higher prices, fewer jobs and lower incomes. So forget about who is going to get taxed and focus on the spending.
6 comments:
This would be great if it wasn't a flawed idea. Marxism, in theory, is a great idea. Everyone shares equally, shares in the work and shares in the profit, but it is flawed because that is not how people work. Focus on less spending is a great idea, but Bush and the Republican congress have increased spending and grown the size of government (according to McCain in the debates).
As for training, yes it would be great if companies would take those dollars that we spend on defense and use them for training and helping people up to their potential, however the corporations only focus is making cash and as we can see, making lots of cash in the short term and ignoring the consequences.
I will not vote for the party who has increased the national debt, increased the size of the government and increased spending. I am voting Democrat.
Once again Lou, you have done a marvelous job of pointing out the facts and supporting them.
Contrast that with the 1 comment here that is disjointed, infused with emotion and rather confusing.
Nobody is suggesting that Bush has not grown government and incresed spending, but what does that have to do with this post. Once again, the 1 comment here proves that libs have to bring everything back to "the terrible Bush administration."
Believe it or not, most corporations act responsibly and without them this country would crumble.
But eric seems to have missed the point of this post. It's not just naive, but rather a trait of all Kool-Aid drinking dems. Miss the point, make ridiculous connections and then rant.
I'm surprised eric didn't mention that Bush stole the election.
Keep up the good work Lou.
I agree with Lou and Island Dweller on all points. I will add a few additional thoughts and comments.
Marxism even in theory isn't a great idea. The fact is that on earth everyone will not share in the work. There will always be some who strive for excellence and some who are perfectly content with mediocrity. There really isn't anything wrong with that. That's why the "carrot" that is the free market breeds success.
Eric, how much of our defense money would you propose to give up in order to "train" people and help them realize their full potential?
So in Eric's world corporations shouldn't make money and then go out of business thereby elimnating all of those jobs and wonderful training that the former employees received courtesty of all those former defense budget monies, correct? Nevermind the fact that we wouldn't have a country anymore due to the fact that we would be defenseless against invasion by other nations.
Finally, you shouldn't be worried so much about what a "party" did in the past so much as you should be about what the one person will do for the USA in the next four years.
Let me phrase it simply, if spending is the gun, then republicans have been pulling the trigger for 8 years.
It's time for a real change.
Island Dweller, you say "Nobody is suggesting that Bush has not grown government and incresed spending, but what does that have to do with this post." The name of the post is "It's the Spending" Republicans can not be trusted to control (or understand) their spending. McCain said it himself "Washington changed us" What makes you think it won't again?
And if you are worried about spending, you will spend more supporting McCain Health Care program than Obama's.
And if you want to get personal with this, I did drink the kool-aid and it taught me to think for myself. You should try it someday.
Eric - It seems that island dweller does think for himself and not just eat everything that is "spoon-fed" to him from our biased media.
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