Boeing Posts Record Revenue but U.S. Defense Spending Cuts, Rising Pension Costs and Higher Taxes are on the Horizon

Posted by PITHOCRATES - January 29th, 2012

Week in Review

In Keynesian economics the government plays a large role in the economy.  By buying a lot of stuff.  And by hiring lots of government workers at all levels of government who buy lots of consumer goods.  Keynesians say these government expenditures are important.  Especially during bad economic times.  For when no one else is spending only the government can step in and sustain spending.  Even if it’s paying someone to dig a ditch.  And then fill it back in.  Because the wages for that person doing that useless activity will be used to buy consumer goods.  And it will stimulate the economy.

Interestingly, this love of government spending does not extend to military personnel.  Or defense spending.  Which, according to Keynesian economics, are just what the economic doctor ordered.  But, alas, they are always the first government spending to be cut to pay for other government spending.  Why?  Well, military personnel tend to vote Republican.  And defense spending tends to feed a lot of money to large corporations (see Boeing faced with strong headwinds by Tim Devaney posted 1/25/2012 on The Washington Times).

The Chicago-based plane-maker announced a 20 percent increase in earnings and record revenue gains in 2011…

But Boeing now faces likely cuts in U.S. defense spending, rising pension costs and a higher tax rate…

The company’s tax rate is expected to increase to 35 percent in 2012 from 33 percent last year, which will cost the company an additional $92 million, or 12 cents per share.

The Democrats use class warfare.  For they have little success with their policies and can’t run on successful track records during elections.  And in class warfare you need enemies.  Old rich people.  And, of course, evil corporations.  Hence the attacks on the industrial military complex.  Which Democrats are all in favor of.

And note that increase in their taxes.  That’s not an increase to $92 million.  That’s an additional $92 million.  Here I thought Boeing’s job was to build and sell airplanes.  When apparently they are nothing more than a cash piñata for the government to whack open to pay for more government spending.  That isn’t spent on, of course, defense spending.  Or Republicans.


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