It Needs Saying!

Can we talk? I mean common sense economics, that boring subject that eludes our elected officials. I'll keep it simple so even they can understand...

There are two economic outlooks, one is practical and is used everyday, the other is the government model. If you as an individual want to increase your spending capital, you cut expenses. When business wants to be more "profitable" they lower overhead, It's easier and more efficient to cut costs putting more money in your pocket, than it is to increase your income level.

When the government wants more money it raises taxes, thereby increasing revenue, ( or so they assume). They don't understand lowering overhead as they've never had to be profitable. So as taxes go up, so do expenses. Not an efficient set up.To justify it they point to economists theories. The problem is....

Economics is haunted by more fallacies than any other study know to man. While certain public policies will benefit everybody in the long run, other policies will one group only at the expense of the other groups. Those that are benefited will argue plausibly and persistently . It will hire the best buyable minds to devote their time to presenting their case. It's easy to plead the immediate effect of the policy, overlooking the long term consequence. Politicians always focus on the short term as that's what wins votes.

Christina Romer, the President's chief economic policy advisor is resigning for just this reason. Her "theories" have not worked. She has never had any practical experience in business as listed above, so the idea of cutting costs never crossed her mind. Where do people who've failed like this go? Back to teaching economics. Those who know, do...Those who don't, teach! Is it a wonder after generations of this that our economy isn't in worse condition?

Meanwhile, the demagogues and bad economists are presenting 1/2 truths, ignoring a long complicated chain of reasoning. Let's look back on history for the results of raising taxes on the wealthy.

Senator Ted Kennedy pushed through an increase on capitol gains tax back in 1969, which raised the top marginal tax to it's highest level in US history, 49%. Almost 1/2 of your investment profit went back to the government. The results were immediately destructive. Tax revenue plummeted to levels lower than pre- 1968 . Not only did it contract job growth, it halted all investment. Keynesian economic at it's best.

We need to remove career politicians, book taught in economics. Our country needs leaders schooled in business 101 and profit. Practical experience in operation of a business, turning a profit, and meeting a payroll is critical in the here and now. America must live within it's means.....

God Bless!
Capt. Bill