Someone does NOT have to Pay for Wasteful Government Spending

Posted by PITHOCRATES - November 27th, 2011

Week in Review

The Keynesian economists are out again saying that we need to tax the rich more.  Because lower tax rates for the rich don’t have a net economic benefit.  Just as lower tax rates for the poor and middle class don’t have a net economic benefit.  Because if a higher tax rate makes them work one hour less, they get one less hour of pay.  And have one less hour of pay to spend in the market place.  Ergo, it is a wash.  For rich and poor alike.  But the rich can afford it more easily so we should tax them instead of the poor and middle class.

This is macroeconomics groupthink.  By a bunch of elitist who think they know better than everyone else in the world.  They do understand some economic basics (see Somebody has to pay for government posted 11/23/2011 on The Economist).

If you tax rich people less, you tax regular and poor people more. And when you tax them, they, like rich people, have a certain propensity to work less (“deadweight loss”). Also like rich people, the money they pay in taxes is money they cannot spend, which leads to lower economic activity and lower GDP in the short run.

But make all the wrong conclusions.

Higher taxes mean people have less money to spend.  They got that right.  But all their theory is based on one great fallacy.  And that fallacy is this:  All government spending is necessary.  And therefore must be paid for with taxes.

Contrary to Keynesian belief, all government spending is not necessary.  In fact, most of their spending is not necessary.  And should be cut.  The intent of the Founding Fathers is clear.  The federal government was not to be a nanny state.  Being a nanny state is nowhere enumerated in the Constitution.  This growth of the federal government has only created a privilege class.  And they have risen to rule us by getting as many of us as possible dependent on their ‘generosity’.  Which, ironically, was the point of the Revolution.  To end rule by a privileged class.

So when you look at federal spending in this light the argument of who should pay the taxes is a moot point.  Spending should be cut.  Meaning taxes should be cut.  Not increased.  On anyone.

Arguing not to increase taxes on anyone is a good argument to make.  Because it transfers the argument past the veneer of fairness to what it actually is.  An out of control federal government spending money wastefully and recklessly to buy votes.

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