No comments needed. Thomas Sowell obliterates Obama and the rest of the lying government politicians.
Fiscal Cliff Notes
By Thomas Sowell Tuesday, December 04, 2012
Amid all the political and media hoopla about the “fiscal cliff” crisis, there are a few facts that are worth noting.
First of all, despite all the melodrama about raising taxes on “the rich,” even if that is done it will scarcely make a dent in the government’s financial problems. Raising the tax rates on everybody in the top two percent will not get enough additional tax revenue to run the government for ten days.
From a presentation by Texas Senator John Cornyn
And what will the government do to pay for the other 355 days in the year?
All the political angst and moral melodrama about getting “the rich” to pay “their fair share” is part of a big charade. This is not about economics, it is about politics. Taxing “the rich” will produce a drop in the bucket when compared to the staggering and unprecedented deficits of the Obama administration.
No previous administration in the entire history of the nation ever finished the year with a trillion dollar deficit. The Obama administration has done so every single year. Yet political and media discussions of the financial crisis have been focussed overwhelmingly on how to get more tax revenue to pay for past and future spending.
The very catchwords and phrases used by the Obama administration betray how phony this all is. For example, “We are just asking the rich to pay a little more.”
This is an insult to our intelligence. The government doesn’t “ask” anybody to pay anything. It orders you to pay the taxes they impose and you can go to prison if you don’t.
Then there are all the fancy substitute words for plain old spending— words like “stimulus” or “investing in the industries of the future.”
The theory about “stimulus” is that government spending will stimulate private businesses and financial institutions to put more of their money into the economy, speeding up the recovery. But the fact that you call something a “stimulus” does not make it a stimulus.
Stimulus spending began during the Bush administration and has continued full blast during the Obama administration. But the end result is that both businesses and financial institutions have had record amounts of their own money sitting idle. The rate of circulation of money slowed down. All this is the opposite of stimulus.
What about “investing in the industries of the future”? Does the White House come equipped with a crystal ball? Calling government spending “investment” does not make it investment any more than calling spending “stimulus” makes it stimulate anything.
What in the world would lead anyone to think that politicians have some magic way of knowing what the industries of the future are? Thus far the Obama administration has repeatedly “invested” in the bankruptcies of the present, such as Solyndra.
Using lofty words to obscure tawdry realities extends beyond the White House. Referring to the Federal Reserve System’s creation of hundreds of billions of new dollars out of thin air as “quantitative easing” makes it seem as if this is some soothing and esoteric process, rather than amounting essentially to nothing more than printing more money.
Debasing the value of money by creating more of it is nothing new or esoteric. Irresponsible governments have done this, not just for centuries, but for thousands of years.
It is a way to take people’s wealth from them without having to openly raise taxes. Inflation is the most universal tax of all.
All the pretty talk about how tax rates will be raised only on “the rich” hides the ugly fact that the poorest people in the country will see the value of their money decline, just like everybody else, and at the same rate as everybody else, when the government creates more money and spends it.
If you have $100 and, after inflation follows from “quantitative easing,” that $100 dollars will only buy what $80 bought before, then that is the same economically as if the government had taxed away one-fifth of your money and spent it.
But it is not the same politically, so long as gullible people don’t look beyond words to the reality that inflation taxes everybody, the poorest as well as the richest.
Thomas Sowell is a senior fellow at the Hoover Institution, Stanford University, Stanford, CA 94305. His Web site is www.tsowell.com.
David says:
I wonder if they will be surprised, when they pass this “Rich Man” tax how few rich men there will be at the end of the year. Idiots!
Politicians are not of the people for the people. They are now the ruling class and everything they do is about preserving their position, power, money. Why, because if they did what was right they would also go through pain and they refuse to volunarily sign up for that. So folks, enjoy life as much as you can as we march to the abyss. One year? Ten years? 50 years? Who knows, but we are now on a one way street.
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5th December 2012 at 10:14 am
wip says:
There is a social contract which must be adhered to. Like it or not resource/wealth/income inequality (if allowed to get too wide) will produce bad things man. Greed is as bad as envy. They are related.
Sticky, what does the bible say?
Hot debate. What do you think?
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5th December 2012 at 10:23 am
David says:
What would that social contract be. Two words do not make a contract, they imply a contract. So, what is the contract?
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5th December 2012 at 10:29 am
Steve Hogan says:
I find all of this bickering about the looming fiscal cliff tiresome. The sociopaths in Washington must think we’re all fools.
Regardless of what “plan” these morons concoct, our unavoidable fate is to default. When it happens and what form it takes are unknown, but it is coming. No tweaking of tax rates will change this outcome.
How I would love to hear the truth for once from these pack of liars.
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5th December 2012 at 10:39 am
card802 says:
I keep coming back the the fourth turning when I read all this fiscal cliff fear, and the laughable solutions by both parties.
Libertarians at this point don’t have a chance of holding any powerful position in government, the republican party for all intents is dead or they will morph even more into the democrat party. The FSA is the majority now and they will keep voting for more of the same. If we are five years into this turning we have fifteen or so more to go. Change will only come from the will of the people not politicians, and the will of the people must be changed because of crisis.
How bad is this going to get before the will of the people demand change? And what change?
Most today have no idea what the Constitution was even written for, they have no concept of what real freedom is, or a free market.
In the next fifteen years will a new generation be created that only understands turning in your family and friends results in government favors? The entire boot stomping on your face forever thing.
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5th December 2012 at 11:14 am
fool on the hill says:
Odumbo is a javelin thrower.
He couldn’t lead a one car funeral.
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5th December 2012 at 11:33 am
sangell says:
Politically the Republicans ought to give Obama his tax increase on high incomes. It doesn’t impact GOP voters anymore than Democrats ( maybe even less since a lot of those $250,000 incomes are in New York, LA, SF, DC, Miami, Chicago that vote consistently and heavily Democrat) and as Sowell
notes, it won’t raise enough revenue to matter. It probably won’t even raise as much revenue as expected for a lot of reasons.
I’ve often wondered why government chose ‘income’ as its primary tax revenue source. People who are paid a lot tend to be very productive and or educated people. Yes, it lends itself to progressivity more than sales or VAT revenue but a couple making $250,000 or even $500,000 per year are not the true ‘rich’. If they made that much and saved 50% of their income for 30 years ( which is unlikely as most people don’t make ultra high incomes for that long a period) they would only have a few million dollars saved and in Obama’s ZIRPED America they won’t even benefit from any compounding on their savings.
The real fortunes are made on capital gains and it is here that tax progressivity would do the most to prevent concentration of wealth and raise as much revenue as taxing high incomes. There is simply no good reason to allow anyone, much less a twentysomething kid like Mark Zuckerberg accumulate $20 billion dollars. Yes, he created Facebook and the market says his shares are worth that much and he only realizes that money if he sells his shares but as Oracle’s Larry Ellison admitted about himself ‘no one should have this much money’.
Does it make sense to tax the bejesus out of a doctor, engineer or other professional who, after years of hard work building a practice or firm, finally starts to earn some good money while we let some incompetent CEO walk away with tens of millions for destroying a company . Does Larry Ellison really need to have $35 billion dollars to run his company? Might he still be willing to do that and have a very nice life with a tenth or even a hundredth of that fortune?
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5th December 2012 at 11:34 am
card802 says:
Sangell, I was with you until your idea of who “deserves” any amount of wealth, and the taxes required so the government can claim that wealth.
We all keep falling back on who to tax more, how to tax more, and what new taxes we can create to keep pace with the governments SPENDING.
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5th December 2012 at 11:50 am
wip says:
David,
I believe the social contract is called “Survival of the fittest”.
Many of those who thought they were the fittest ended up being out-voted or ended up on the scrap pile of history. I have been watching “Mankind: The Story of all of us”. Good stuff. History repeats?
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5th December 2012 at 12:05 pm
sangell says:
Its not a matter of who ‘deserves’ the wealth, as I freely admit guys like Gates, Ellison and Zuckerberg created the companies their wealth derives from. The problem is I see no useful economic purpose in concentrating so much wealth in their hands. If, for example, Jobs and Wozniak had been a bit wealthier when they formed Apple and kept the company private their wealth, today, would be in the hundreds of billions of dollars. Such concentration of wealth is not a matter of it being fair or legal it is a matter of it being good economically
One way of looking at the problem is to imagine a person’s wealth in terms of their height. If we say the average American is 6 feet tall and has a net worth of $100,000 ( I’m being generous) then Bill Gates stands over 680 miles tall. Do we really want this kind of disparity in economic power in a free society? I’m all for people getting rich I just think there is a point beyond which wealth becomes absurd and even dangerous.
Remember Howard Hughes? He was certifiably insane for years but his vast wealth allowed him to keep that secret. He didn’t do anything particularly horrible save for having his stools kept in jars and labeled as to date and time of their creation and let his finger nails grow to grotesque lengths but it could have been otherwise. Do we really want to allow people to have so much wealth and power that if they go crazy they could become real life James Bond movie villains?
Hot debate. What do you think?
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5th December 2012 at 12:26 pm
AWD says:
Dateline Washington D.C., December 4, 2012
Today, finally – a meeting of minds – serious minds – great minds – on the tax predicament now facing America: President B. Hussein Obama met with the Reverend Al Sharpton and television journalist extraordinaire Rachel Maddow to discuss taxes and the best way to deal with America’s current tax quagmire (which is largely because, Bush, and the Republicans).
While there hasn’t yet been an announcement on what decision was reached, those in the know say that America can rest easier tonight, knowing that the three greatest minds in the country have no doubt determined the proper course for the great ship The United States, through Republican-infested waters and storms of unrepentant Teabaggers, to that appropriately and equally taxed grand utopia some call NextTuesday™.
Presidential spokesunit Jay “Carney” Carney barked that, “The President (PBUH) in His wisdom has joined together today in a meeting of progressive minds with two of America’s deepest thinkers – and as a result, when he gets back from His three-week Hawaiian vacation He will be clear with the American public, as He always is, being the President and leader of the most transparent administration in the history of the known universe. That is all”.
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5th December 2012 at 12:32 pm
AWD says:
Well-loved. Like or Dislike:
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5th December 2012 at 12:35 pm
platoplubius says:
I wonder if Obama will let the tax breaks expire since “forced austerity” seems to be the norm in the Western World as of late. What better excuse can be used than “no bipartisanship teamwork” to solve the problem. This will benefit Obama later and will hurt the rest of America while helping Wall St. so why wouldn’t the tax breaks be allowed to expire?!
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5th December 2012 at 12:50 pm
Eddie says:
I’m fucking doomed. Lower revenue. Much higher taxes if i get trapped by the AMT. Ten good working years left. And my wife wonders why I’m depressed.
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5th December 2012 at 2:00 pm
AWD says:
O little town of Washington
What evil webs you weave
Your political denizens
Work ceaselessly to deceive
To control the citizens
Is your only desire,
Eliminating liberties
Consumes your ev’ry hour
Mass insanity’s what got us
To this abhorrent place,
0bama claps his hands in glee
And kicks us in our face
“What you’ve got you owe to me”,
The trickster screams with joy,
“The Shining City on the Hill
Is just my broken toy!”
Yes in your dull mind lurketh
Pure diabolism,
To enslave all o’er you claim pow’r
You won’t be done ‘til then
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5th December 2012 at 2:02 pm
ASIG says:
Political theater that’s all it is. There are no real solutions being considered. Obama has only one goal in all of this. He needs a new scapegoat. He’s worn out the “It’s bush’s fault” and needs someone to blame as thing get progressively worse and the republican congress is the new scapegoat. And this will work since the liberal MSM will support that image of Obama doing everything possible to improve the economy and the evil republican congress hell bent to destroy the economy just to benefit the rich.
At some point it will be presented as a logical solution that congress needs to go. We need to give Obama complete control so that he can fix all problems without congress standing in the way.
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5th December 2012 at 3:45 pm
DaveL says:
Sangell says: “Does Larry Ellison really need to have $35 billion dollars to run his company? Might he still be willing to do that and have a very nice life with a tenth or even a hundredth of that fortune?”
“Such concentration of wealth is not a matter of it being fair or legal it is a matter of it being good economically.”
What do you suggest be done with that wealth? Would you have any problem with them just donating it all to charity, or burning it?
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5th December 2012 at 6:10 pm
llpoh says:
Sangell – many times I agree with you. But your last post was ridiculous.
It has everything to do with being fair – those folks you mentioned built their businesses out of nothing. What is fair about stealing their wealth from them? It is theirs – they earned it. If they did something illegal in the building of their wealth, that is another matter. What you propose is theft pure and simple, and would eliminate all rights to personal property. Who decides what is too much? You? Someone with less than you, who decides you have too much, and thus takes it?
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5th December 2012 at 6:30 pm
Colma Rising says:
Sangell:
I haven’t agreed with you much lately, but I think your last post was fabulous.
While you didn’t advocate taxation, you did bring up a glaring inefficiency with regards to alleged monopolist tendency…..
They did earn their money, but that doesn’t mean we don’t have to call them douche bags.
If I was as rich as Ellison, I’d totally buy an island…. maybe somewhere cool like Lanai, and make it my Dr. Evilesque island lair.
Oh shit, dude basically did that!
Nyah fuck those clowns.
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5th December 2012 at 8:27 pm
Colma Rising says:
“Fiscal Cliff”
Lol
For some reason, I don’t give a rat’s ass…
I’m just wondering what else fucknuggets will come up with to distract from the recession we entered Q3 2012….
Fiscal Cill My But They Sniff…. take a whiff, media, I got something ripe for your candy asses.
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5th December 2012 at 8:40 pm
Novista says:
sangell
“Do we really want to allow people … ”
WE? You apparently inherited the wisdom of Solomon … or God … there is a reason no income tax was justified in early America — and getting one is why we are here today with some people certain they know how to decide for others.
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5th December 2012 at 8:42 pm
Colma Rising says:
Dammit, my stupid ass typed. “Fiscal Cill” instead of “Cliff”
The ryhme was hellsa dumb anyway
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5th December 2012 at 8:42 pm
sangell says:
Novista, if you allow a handful of people to grow too wealthy ( and like pornography its hard to define but you’ll know it when you see it ) then you won’t have the wisdom of Solomon deciding but the wisdom of the mob. The top .0001% can’t have everything even if they got if fair and square. Say’s law notwithstanding a nation that only exists to service the whims and pleasures of a few will not endure.
Then there is the Dr. Evil scenario. I’ve mentioned Howard Hughes as being a nut with billions. I think Warren Buffett is losing his mind too. It happens when you get old. Buffett’s megalomania may be harmless now but that doesn’t mean it will always be. There is a company called Sandia. Lockheed owns it now. It services America’s nuclear arsenal. That’s how we do it in America. Private companies undertake the most sensitive programs for the government. Their shares are publicly traded. That means a demented billionaire can come to control them. That means a Buffett or Ellison could acquire Sandia and by putting their people in key positions come to control a nuclear arsenal. Not a bomb or two but dozens or even hundreds. Dr. Strangelove was an unlikely scenario because military officers don’t wield the kind of absolute authority a billionaire can. A mentally ill general is unable to conceal his illness in the same way Howard Hughes concealed his. BTW Howard Hughes was a major Defense Department contractor. His Glomar Explorer was used to raise a Soviet nuclear sub and Hughes Aerospace built satellites and other stuff for the military.
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5th December 2012 at 9:53 pm
wip says:
Sangell
Very good response. Too much of anything is a bad thing. Too much power, money, military might, economic control etc. leads to tyranny of one kind or another. It’s the dark side of human nature.
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5th December 2012 at 8:09 am