Monday, November 19, 2012


As the ongoing "fiscal cliff" debate goes on and on, the Democrats are getting more shrill about raising taxes on the "rich" to solve the deficit/debt problem.  The more the Dems trot out people like Dick Durbin to argue that point (using well scripted Obama talking points) the sillier they sound.  EVEN JOHN MAYNARD KEYNES DID NOT BELIEVE IN RAISING TAXES IN A STRUGGLING ECONOMY!

Think about it!  How much revenue would be raised under the Obama obsession to have the rich pay for their "fair share"?  The answer is a very small amount compared to the size of the deficit and debt level.  I am sure the Democrats remember that great economist, Nancy Pelosi, expounding the merits of the "multiplier" in defending increased transfer (welfare) payments...that $1 of spending by the consuming public would result in $3 of additional growth in the economy.  Well, that hasn't happened and, as importantly, taxing the "rich" will not cure the spending problem and will not magically create a "surplus" to pay down the debt.  In fact, the debt will continue to RISE unless spending is curtailed and REAL economic growth is encouraged.

Now consider what happens when taxes are raised (from any source) is taken OUT of the economy.  Do the Democrats expect us to believe that money put into the economy is subject to the multiplier effect but money taken out of the economy is not subject to the multiplier effect in reverse? Herein lies the problem...the process by which the multiplier effect works is not a simple thing to understand and communicate to the voting politicians like Nancy Pelosi and Dick Durbin can use the process to support their spending argument and ignore it when it suits their populist "tax the rich" argument.

The only way this country will ever have an election decided on the "issues" is when each and every voter has some basic understanding of how an economy really works.  Unfortunately, that is not a concept embraced by politicians.  If it were they would all be on the streets looking for a job like all the other jobless citizens.

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