Friday, April 18, 2008

Myth of Fiscal Responsibility

I don't talk about economics much. My understanding is limited. I know that there's a supply curve and a demand curve and where those two points meet should be your price. Beyond that, pretty dumb.

But I'm thinking the entire capitalist no tax wing of the republiskunk party may be even worse at math. No matter what's going on, they've got one answer. Cut taxes. The economy is robust. Cut Taxes. The economy is in danger of recession. Cut Taxes. We've got trillions tied up in a war overseas. Cut taxes. Maybe they really just want to take the whole system into bankruptcy, but what they gain from that, I'm not sure.

I'm like everyone else. I don't really love paying taxes. And I'm happy to be getting a couple bucks in stimulus from the government into my pocket even though it seems they're really just borrowing this money again. (I guess it wouldn't make sense to raise taxes to pay for the stimulus.) But I'm still not getting their math.

Here are my thoughts.
1. I don't really by the argument that high taxes stifle innovation. Capitalism means everyone wants to make money, even if the government gets its piece.

2. There has got to be some optimum level of that produces optimum revenue for the government. Maybe this number changes very rapidly all the time. Or maybe this number would be a lot higher than the current tax rate. Or optimum revenue isn't a goal. Republicans argue that taxes should be lower, but never on this point. Not sure, why I've never heard this argued.

3. Doesn't anyone really worry about these deficits? In a couple years most of our taxes will be going to financing debt. That means no government services. Doesn't that seems like a bad thing.

4. It's already happened in California. No one will take on the topic of raising taxes even though the state is billions in debt. The once proud UC system is being dismantled, along with healthcare, park services and every other program.

Yeah. Not an expert on this stuff, but just some thoughts on a Friday afternoon.

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