The Rockin Johnny B

Saturday, November 9, 2013

The Big Lie

I find it interesting that folks believe by cutting taxes one can increase productivity. Over and over again its been proven that this just isn't the case. A simple illustration will show what I mean.

You are a worker making $10 per hour. I am your boss and I say I'm cutting your pay by $1. You now are making $9 per hour, but now I say I want you to increase your spending to bolster the economy. Do you see the dichotomy? You have less to spend, but you are being asked to increase spending to make up for your loss. See the idiocy?

How does this relate?

The government runs on the money we tax payers give it. If we cut taxes and ask the government to run on less, what happens? First off, in order to meet budget, the government lays off workers. Those workers now are headed to the unemployment offices to draw their stipends. They also head to the SNAP offices to get their food stamps. You now have a larger unemployment figure and these people are paying no income taxes. How can this situation possibly aid the country's productivity and lessen the debt/deficit?

It has been estimated that over 40% of the people who are employed in this country work for the government in some capacity. There are 313,914,040 people in the U.S. today and if only 200 million of them are employed workers and 40% [or 80 million] are government employed, even if you only cut 10% of these people from their duties, that would mean 8 million people would be demanding unemployment benefits and food stamps. The average unemployment check is $293 per week or $1172 per month and 8 million people are drawing that amount; the total would be $937.6 million dollars paid out by the fed every month these people are unemployed. The average SNAP benefit is $133 per month and that equals $106.4 million paid out for food stamps per month.

Can you see what that would do to the national debt? Yet every time a conservative campaigns, he/she invariably says h/she will cut taxes, but that never happens now does it. No, they invariably add to the deficit and raise taxes to pay for it.

It is hokey to believe any politician can cut spending and increase revenue. Simple math proves the point. I hate to say it but this is the great Capitalism Lie. We are led to believe there is a magic potion, tax cuts, that will save the economy. Especially cuts for big businesses and not for the average middle class person. Everyone knows if you give big businesses more money, they will hire more people...NOT. Big business reinvests its money overseas or in other facilities in countries that don't have high wages so Big Business can make more money...they are not spending their money to bolster the U.S. Economy; that just doesn't make good business sense, now does it? No.

This way of thinking is called 'Trickle Down' economics. Reagan was a big believe in it and showed he was in the way he created a Laissez-faire atmosphere for big businesses and he actually increased taxes many times to pay for it.

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