The democrats’ notion that we can solve the budget crisis by cutting military spending and increasing taxes on the wealthy is misplaced.
I can disprove this notion by using some simple logic.
While the drastic cutting of military spending would definitely make a large dent in the budget deficit, ultimately the military budget only comprises around 20% of the US Federal budget. The vast majority of the spending takes place in the Medicare and Socialist Security programs, which account for 43% of spending as of 2010.
To cover a deficit of 1.5 trillion, more than just military spending needs to be cut. And of course, the president is a democrat and he shows no signs of halting any military interventionism any time soon. Thus, any claims that democrats, if they were to regain power, would halt military spending, are a joke.
This leaves us with tax hikes. While it is true that the uber rich have sucked up absolutely insane levels of wealth over the past ten years, leading to the largest wealth disparity ever, we must look at just how taxes work and the uber-wealthy’s response to them.
My argument for why tax increases will not work is quite simple, the rich already have their booty and are simply going to ride out the economic chaos caused by a collapsing dollar and bloated government.
An income tax taxes INCOME, not wealth already owned. If someone is a billionaire and the income tax rises to 100%, unless the billionaire blows his wad at the casino, he’s still going to be a billionaire. No matter what the billionaire buys with his money, no income taxes will be collected on him unless he sells off his investments. However, a 100% income tax would prevent any other person from ever becoming a billionaire.
Further, when someone is a billionaire, they aren’t restricted to earning wealth in dollars or even keeping their cash in the US. The most prudent thing for a billionaire to do if taxes were raised to 100% is simply move to a different country with a lower tax rate. – which is exactly what happens in real life. Historical records show us that no matter what the tax rate, the US government almost never collects more than 20% of GDP in taxes.
Further, we must consider how billionaires become billionaires in the first place – largely through obtaining tax breaks, government contracts, bailouts, and other fascist interactions with government politicians who they own.
Any projected revenue gains from tax increases are a fantasy. The rich will simply move their money out of the US, and the jobs they create with their investment capital along with them.
The rich are not the problem, nor are the rich the solution. The problem strictly lies with government spending and regulations. I think we can all agree that running a 1.5 trillion dollar deficit forever will ultimately lead to the total destruction of the dollar and the implosion of the US economy; so the budget must, at the least, be balanced.
Along with the misplaced notion that tax increases on the rich will somehow save the budget is the notion that government spending can produce sustainable jobs. Of course, government spending can produce jobs, but not jobs that actually improve economic conditions.
In order to improve economic conditions a nation must actually produce things that improve the standard of living for society. The people then use their money to buy those things from each other, there by improving their lives. The more stuff a country produces, the better off its people can live.
So how do we get a country to actually produce stuff? All that is needed is to simply leave people alone.
People naturally want to work, investors naturally want to make money, and people naturally want to buy the things each of them produce from each other. No intervention from government is required to make this happen.
If we think about all of the things required to make a simple ham sandwich, the nature of the free market becomes incredibly clear. There is no possible way the government could coordinate and plan the production of wheat, mustard seed, hog feed, barns, butcher shops, hogs, tomatoes, etc.. etc.. etc.. Only free people acting in their own self-interest can produce the coordination required to bring a ham sandwich to market.
The more bureaucrats that are created to manage the private sector and the more taxes that are taken in profits from the private sector, the less productive the private sector becomes.
The less productive the private sector becomes, the less well off the people of that nation will be.
This is a simple economic law that is irrefutable.