The debt hawks are to economics as the creationists are to biology.
What lessons does the following article provide?
7/31/10: (AP) “WASHINGTON (AP) – Tucked into the new health care law is a requirement that could become a paperwork nightmare for nearly 40 million businesses. They must file tax forms for every vendor that sells them more than $600 in goods.
“Business groups say it will swamp their members in paperwork. “This foolish policy hammers our business community when we should be supporting their job growth,” Sen. Mike Johanns of Nebraska said. The requirement would hit about 38 million businesses, charities and tax-exempt organizations, many of them small businesses already swamped by government paperwork . It would also create an avalanche of paperwork that could strain the IRS.
“Republicans want to repeal the filing requirement and pay for it by changing other parts of the new health care law. Democrats want to repeal the filing requirement and pay for it by raising taxes on international corporations and limiting taxpayers’ ability to use special trusts to avoid gifts taxes.”
Four lessons:
#1. Federal taxes represent the single most damaging factor in our economy – far more damaging than bankers’ greed or speculators’ law-breaking. Taxes not only remove massive amounts of money from our economy, but they waste millions of hours for preparation, and enforcement.
#2. Congress does not understand the fundamentals of government finance. Federal taxes do not pay for federal spending, and tax reductions do not need to be “paid for” by increases in other taxes.
#3. Taxing business, while simultaneously trying to stimulate employment, makes no sense. Every tax on business hurts the economy, while increasing unemployment.
#4. Senators and Representatives are far worse than the “greedy” businessmen Congress loves to criticize. Congress’s greed is both for money and for votes. Members of Congress have one concern, and it is not the best interests of America. It is re-election. In that sense, Congresspersons are the least patriotic people in America, often taking actions they know will hurt the country, merely to assure themselves of ongoing personal power. Each day, Congress does more damage to America than have Al Qaeda, the Taliban and oil spills combined.
Rodger Malcolm Mitchell
http://www.rodgermitchell.com
No nation can tax itself into prosperity
#Monetary Sovereignty - Mitchell 
Amen to that–I agree with everything you said. I say that just as I find out that as my job starts back up next month (I’m a school teacher), the way they take the taxes out of my paycheck will change meaning I will be taking less home each month. This coupled upon losing money because we took “furlough” days because our district doesn’t have the money to pay us for the entire school year because of budget cuts.
I keep on mumbling about how Congress has no idea what they are doing because it doesn’t have to be this way. Will they ever learn or are we doomed to another steep downturn in our economy because there is no adequate job stimulation? It makes me so angry!! When I wrote to my representatives and senators I told them to look into your blog and others I follow who speak the same message you do. Let’s hope they actually do some research and figure out what is going on. A person in power who has no idea how things work is the most dangerous person of all!!
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Rodger–Excellent post.
Keep in mind though that some (probably many now) in congress feel that they can better spend money into the economy than can businesses. So, perhaps they don’t mind taxing businesses just to prove that government always has the answer.
Congressmen do need to be re-elected, but the way to do that is to spend other people’s money. Money that was donated to their campaign and the endless supply of money that this country has.
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TheInterest,
Federal spending good; federal taxing bad. Always.
Rodger Malcolm Mitchell
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Federal spending on bombs, good?
Federal spending on eavesdropping devices, good?
Federal spending on jack-booted national socialistic police, good?
Federal spending on pro-vegan programs, good?
Federal spending on hog farm programs, good?
No, not all government spending is good. Depending on your values.
Taxes on alcohol, good?
Taxes on gasoline, good?
Taxes on yachts, good?
Taxes on inheritance good?
And although I would agree all federal taxes are bad, some would argue that one can use taxes to reduce use or consumption and to “equalize” society.
Federal spending a good impact on the economy (money supply)? Perhaps, but using the examples above, someone got hurt.
Federal taxes a bad impact on the economy (money supply)? Perhaps, but someone lost freedom at the hands of a faceless bureaucracy.
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Sidnee,
It occurs to me that among the most valuable professions are scientists, teachers and medical doctors. So the federal government wishes to cut the pay to doctors, while forcing the states to cut teachers’ pay and ignoring scientists.
Among the least valuable professions are professional athletes, entertainers and investment bankers. They are vastly overpaid, and the government is fine with that.
Rodger Malcolm Mitchell
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The Interest,
I was discussing affects on the economy. You may not like bombs, but defense spending boosts the economy. You may like taxes on cigarettes, but all taxes remove money from the economy.
One could spend years debating the value of various spending and taxing initiatives, but fundamentally, all federal taxes hurt the economy and all federal spending stimulates it.
Rodger Malcolm Mitchell
Rodger Malcolm Mitchell
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