Thursday, April 21, 2011

Triumph of Hope Over Experience

Let's be frank.

Our economic conditions in this country are not good.  Recently, Standard and Poor (one of the three main agencies that rate the ability of companies and sovereign nations to repay their debts) lowered its outlook for America's long-term credit rating to "negative" from "stable".  The White House tried to intervene to try and sway S&P, but they were not impressed.  Later, the White House said that it was no big deal.  If it was no big deal, why try to change their mind?

What has caused this?  Well, lots.  Generally, though, when you find yourself in deep debt, it doesn't take an economist to realize that your spending has outpaced your income.

Instead of cutting back spending, the only thing that seems to come out of Washington is "let's tax more".  And who are we to tax?  Well, if you believe liberals, then we should tax the rich.  You know, the people that innovate, work hard to produce, and succeed in the market.  But here are the facts:

- The top 1% (those who make over $380,354) pay 38% of federal income tax.
- The top 5% (those who make over $159,619) pay 58% of federal income tax.
- The top 10% (those who make over $113,799) pay 70% of federal income tax.
- The top 50% (those who make over $33,048) pay 97.3 % of federal income tax
- The bottom 50% pay 2.7%.
(2008 tax year data)

So, does it look like we're not taxing the wealthy enough?  Looks to me like those who make wealth are carrying the load...completely.

People who don't pay taxes, or pay almost nothing at all, don't "have a dog in the fight".  Of course people who don't pay taxes want....more...more....MORE!  If you're not paying for it, you'd like a lot of it.  In essence, we have created a "commons" out of tax money.  Those who pay the most get the same as those who don't pay at all.  It's a miracle and testimony to how great this country is to live in that the wealthy put up with this in the first place.

So, looking at the above data, how much is enough?  30% tax rate, 40, 50...how about 100% tax on the wealthy?  If they are the bad guys, and they "deserve to pay more", then why not take it all?  Of course, this is absurd, but how much is enough?  What is fair?  I don't know about you, but if everyone paid the same tax rate, that would be very fair to me.  But punishing those who succeed?  That's what we want America to become?

The Wall Street Journal did a great piece on taxing the wealthy.  Basically, tax all you want....it's not enough.  We have to start taxing the "not wealthy" at huge rates just to pay for the things Washington has promised.  And here, lies the problem.

But, no one wants to give up what they have.  Basic human instinct.  Yet, we must overcome this instinct if we want to survive economically.  Here's what happens whey you even propose a plan...not implement, just propose...that attempts to fix the real problem...spending.  And spending on redistribution of wealth.



As you may know, this clip is being "celebrated" by the left.  They see it as people telling the bad man how bad he is.  I see it as selfish, ignorant, and well...un-American.  There.

And the left is not alone.  Here is a link to a story of a Christian (theologian) contributor to the Washington Post/Newsweek.  She says that if you like Rep. Paul Ryan's ideas of fiscal conservation, then you should repent your sin this Easter.  "...this radical conservatism is unholy and unstable."

We need some adults in this conversation.  And the one that is standing out the most is Rep. Ryan.  I'm not saying his word is the gospel (sorry for the pun), but I am saying we need more people who can come up with logical, sound, and reasonable ideas that can be debated and decided on.

Otherwise...we're screwed.  That's a technical economic term.

Yes, experience doesn't seem to matter much in this debate.  The "hope" that everything is fine is not something I apply to.  And if it means anything to you, not many people who study this for a living think "everything is fine."  The status quo is not sustainable.  And if you don't believe me...well, you haven't bought gas recently.

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