('76 Contributor) Believing a free press to be a vital safeguard of liberty, Thomas Jefferson said, “Whenever the people are well-informed, they can be trusted with their own government.” Many believe the inverse of Jefferson's maxim — the people are uninformed, and therefore the government can't be trusted. After all, what well-informed American would knowingly allow politicians to lead us to the monumental economic and budgetary “cliffs” we face? Despite a proliferation of new media, it's increasingly difficult to separate fact from narrative. Combined with rancorous political discourse in which opponents are demonized in order to delegitimize competing arguments and render unnecessary the defense of one's own, it makes demoralized Americans struggle to discern the truth.When invited by The Aspen Times to help diversify its opinion page, I proposed my “Think Again” column as a fact-based, issue-oriented commentary that would challenge conventional wisdom and remind readers of the values that made America the freest and most prosperous nation in world history. Like “Ripley's Believe It or Not!” I attempt to expose readers to easily certifiable facts and perspectives they might not otherwise consider (see columns at www.thinkagainusa.com). The goal of “Think Again” is not to change minds but to open them, for civil discourse requires being informed and thoughtful, which is the essence of citizenship.Last month, a community member targeted me in the letters-to-the-editor section with an unusual level of hostility and mean-spiritedness — he accused me of being an egregious, bald-faced liar and an embarrassment to Americans. Declaring me guilty without any possibility of innocence (or trial), my accuser and those who defended him from criticism believe their claims are objectively true and mine are lies. Calling someone a liar is the ultimate character assassination. It means truth doesn't matter to that person and that lying is not only habitual — it's an indelible mark of a deceitful and immoral character. According to Jewish ethicist Rabbi Joseph Telushkin, author of “Words That Hurt, Words That Heal,” the most grievous violation of ethical speech is “giving another a bad name,” for words are like bullets whose damage is mortal. To fight fairly, he writes, “you have the right to state your case, express your opinion, explain why you think the other party is wrong, even make clear how passionately you feel. … You do not have a moral right to undercut your adversary's position by invalidating him personally.”In my columns, I've made the case that our undisciplined, indebted and special-interest-oriented government is a bipartisan problem that subverts everybody's interests. I've quoted Sen. Tom Coburn, member of the Simpson-Bowles fiscal commission, who said, “Our economy is on the brink of collapse not because politicians can't agree but because they have agreed for decades … to borrow and spend far beyond our means … to create or expand nearly 40 entitlement programs, carve out tax advantages for special interests, build bridges to nowhere and earmark tens of thousands of other pork projects.”I believe it is a moral travesty that we've mortgaged our children's futures because we're unable to live within our means and are more indebted than any other nation in world history. Mandatory spending on “entitlements” (such as Social Security, Medicare and Medicaid) is the single biggest financial problem we face, consuming 60 percent of our annual budget — up from 21 percent in 1955. As baby boomers retire and live longer, the current spending trajectory is unsustainable. Without reforms, it's unlikely that these vital programs will be available for people who need them in the future. One fact in particular irritated my accusers: We've spent less cumulatively on the Afghanistan and Iraq wars plus the 2008 TARP bailouts than we spend annually on mandatory programs. In contending that I'm a liar, and without citing sources, they claim the wars' total costs will exceed $5.8 trillion and that TARP exposure exceeds $15 trillion. It's not my goal to disprove their claims, only certify mine. According to the Congressional Budget Office — created by Congress in 1974 to “provide objective, impartial information about budgetary and economic issues” — federal spending (excluding interest expense) totaled $3.3 trillion in fiscal year 2012, of which $2.1 trillion were mandatory expenditures for entitlements. Meanwhile, the Budget Office reports that through October, a total of $1.4 trillion was spent on the Iraq and Afghanistan wars, while TARP has cost a net of $24 billion, after repayments. My accusers argue that “true” costs must project a decade's worth of related and longer-term expenses. Therefore, we'll have spent $29 trillion on mandatory expenditures through 2022, according to the president's fiscal year 2013 budget, while unfunded liabilities exceed $60 trillion, according to the trustees of Social Security and Medicare. To put these numbers in perspective, consider that 1 trillion hours ago, dinosaurs roamed the earth.No doubt, fighting fairly is difficult, especially given the personal narratives that inform how we see the world. But as F. Scott Fitzgerald wrote, “The test of a first-rate intelligence is the ability to hold two opposing ideas in mind at the same time and still retain the ability to function.” Unfortunately, the one thing on which die-hard partisans seem to agree is that only one party is at fault — and it isn't theirs. Unable to hold competing facts simultaneously in mind, it's not surprising that they consider inconvenient truths to be lies. But embedded within our First Amendment right to free speech is a responsibility not merely to tolerate others' perspectives but to listen. Imagine if my accusers and I were to summon the mutual respect necessary to listen to each other's concerns. I'm confident we'd discover that despite our differences, we're equally committed to a “more perfect union.” Think Again — instead of playing the “liar” card, we might each learn something new, informing us enough to elect leaders who can be “trusted with our government.”Melanie Sturm lives in Aspen. Her column runs every other Thursday. She reminds readers to Think Again. You might change your mind.
('76 Contributor) Beyond the realm of inconvenient truths, there's a dimension to which Bill Clinton occasionally retreats. It's a dimension of fertile imaginations, sound bites and mind games whose boundaries the gullible determine. In this wondrous land, tokes aren't inhaled, sex with interns isn't sex, and the meaning of “is” isn't always is. When Clinton wags his finger to punctuate a claim, like “no president — not me or any of my predecessors — could have repaired all the damage in just four years,” it's his poker “tell.” Next stop: the Twilight Zone. Ironically, the president who rode to victory in 1992 on the theme “It's the economy, stupid” now suggests it's stupid to examine the 39-month-old economic recovery, which, we were promised, would yield 4 percent gross-domestic-product growth and 5.6 percent unemployment — not the current 1.6 percent and 7.8 percent, respectively. Before crossing over to the land of suspended disbelief, Think Again. In fact, until now, all presidents over the past 75 years have performed better. As Milton Friedman observed, and a November 2011 Federal Reserve study verified, the worse the recession — even when caused by a financial crisis — the stronger the recovery, absent bad government policies like those that prolonged and deepened the Great Depression. Despite record levels of stimulation that exploded government spending to 25 percent of GDP (up from a 60-year 18 percent average) and four consecutive years of trillion-dollar deficits, an Associated Press study concluded that this is “the feeblest economic recovery since the Great Depression. … People who have jobs are hurting: Their paychecks have fallen behind inflation.” Consequently, income inequality has materially worsened, and as Vice President Joe Biden noted recently, “The middle class has been buried the last four years.”The annals of post-World War II economic recoveries show Biden is right. Never before have Americans suffered such poor prospects nor sought such refuge in safety-net programs. When counting the millions of discouraged Americans no longer in the labor force, true unemployment is 14.7 percent. Meanwhile, median household income has dropped nearly 5 percent amid exploding gas and food prices. Not surprisingly, a record number of Americans now claim federal disability checks and food stamps, up nearly 20 and 44 percent, respectively. President Reagan inherited the other “worst” post-World War II recession and, unlike the most recent, had to contend with double-digit inflation and interest rates in addition to double-digit unemployment. By this point in his presidency, Reagan's pro-growth policies had unleashed the economy, resulting in 7.1 percent unemployment, rising median incomes and 11 percent GDP growth. Most importantly, Reagan's work with Democratic House leader Tip O'Neill to implement historic tax, Social Security and immigration reforms — and Clinton's collaboration with Republican House leader Newt Gingrich to reduce government spending, lower taxes on investment, implement “consensus deregulation” and reform welfare — fueled the greatest economic boom in world history, from 1982 to 2007. As business investment grew, so did the job market and the number of Americans paying taxes, confirming what President Kennedy said “is a paradoxical truth that … the soundest way to raise (tax) revenues in the long run is to cut (tax) rates now.”If the current “recovery” had performed merely as well as the average of all post-World War II recoveries, current U.S. GDP would be $1.2 trillion larger, and 7.9 million more Americans would have jobs. Americans have been denied this prosperity because of unprecedented levels of government spending, job-killing regulation and crony capitalism — partisan policies that large majorities of business leaders in two recent surveys (Business Roundtable and National Federation of Independent Business) say hurt them.That 55 percent of small business owners surveyed wouldn't start their businesses today reflects a lack of confidence in the economy's future, imperiled as it is by $16 trillion in debt (up 50 percent since January 2009), a sum larger than the U.S. economy. When interest rates increase from historic lows, larger interest payments will necessitate draconian budget cuts and increased taxes. Absent rapid GDP growth to bring debt-to-GDP levels down to manageable norms, Americans can't be confident in a future that holds only two unacceptable alternatives — substantial tax increases or sustained inflation.As the president who declared the era of big government over, Clinton understands our perilous fiscal state. Were he to emerge from the Twilight Zone, he'd agree that government spending should be capped at 20 percent of GDP — the average during his presidency and a Romney campaign promise. He'd be opposed to increasing taxes in a fragile economy, as President Obama proposes. Most important, he'd be appalled at the lack of leadership evident in Obama's budget — no plan to address the looming fiscal crisis and trillion-dollar deficits into oblivion. Think Again — outside the Twilight Zone, it's the pro-growth policies, stupid!Melanie Sturm lives in Aspen. Her column runs every other Thursday. She reminds readers to Think Again. You might change your mind. Melanie welcomes comments at email@example.com.
The economy is one of the most important environments where Christians interact. It is where they find employment, provision food and shelter, derive savings for the future, create value, serve others, consume goods and services, contribute charity, and apply their imagination. It is the core instrument of civilization progress. God has a lot to say about the economy and Christians should engage in the economy with a Biblical worldview. Ethics and morality are indispensable supports for a sound economy. Christians should be actively engaged in economic policy matters.
A Christian worldview of business and the economy is essential if America is to recover its eroding economic leadership in the world. A Christian worldview of commerce is predicated upon the fact that man is born sinful (Ephesians 2:3) does not prosper by injustice (Ephesians 4:28) should work (2 Thessalonians 3:10) respects private property (Exodus 20:15) prospers through diligence (Proverbs 21:5) avoids the envy of other people's property (Exodus 20:17) and that righteousness can yield abundance (Proverbs 16:8).
Some liberal Christians, e.g., Jim Wallis, etc. believe that the Bible prescribes socialism (Acts 4:32-35) and social justice (redistribution of private property) but this represents a failure in hermeneutics. This is a failure in thinking because the example presented in Acts 4:32-35 is characterized by the volitional decision to share private property. The passage is explicit in that the property shared is privately owned (antipodal to the state owned model of socialism) and that the redistribution is not compulsory (also antipodal to state run socialism). There is no Biblical support for state run socialism.
Given the economic choices between capitalism and socialism, capitalism is the best expression of a Christian worldview with regard to economics. Dr. Ron Nash (1936-2006) said "One dominant feature of capitalism is economic freedom, the right of people to exchange things voluntarily, free from force, fraud, and theft...[while] socialism, on the other hand, seeks to replace the freedom of the market with a group of central planners who exercise control over essential market functions." Capitalism is an economic system where production, distribution, and trade are privately owned to yield a profit for those who have made the investment to support that objective. It is done in a largely free marketplace where the government respects private property and the legal system protects contractual law. Problems arise based upon the moral and ethical failure of owners (committing fraud) or the market (committing theft) or the government (limiting freedom and violating property rights).
Winston Churchill eloquently observed "The inherent vice of capitalism is the unequal sharing of blessings. The inherent virtue of socialism is the equal sharing of miseries."
Thomas Jefferson rebuked the notion of government control, "Were we directed from Washington when to sow, and when to reap, we should soon want bread." Margaret Thatcher said "Socialist governments traditionally do make a financial mess. They [socialists] always run out of other people's money. It's quite a characteristic of them."
God blesses people and nations according to His will (Psalm 67) and He is not accountable to man (Romans 11:33) and is sovereign (1 Chronicles 29:11-12). However, Christian stewardship requires a responsibility to God for decisions and behavior. "Biblical stewardship views God as owner of all things and man (individually and collectively) as his steward." When man abandons the authority of God in such affairs, he risks danger as Lord Acton stated "Power corrupts. Absolute power corrupts absolutely."
The status of the current American economy is precarious. One of the best measures of a country's economic health is the debt-to-GDP ratio, an indicator of the relationship between debt and production. The official US debt is approximately $15.7 trillion while the US GDP is approximately $13.5 trillion constituting a ratio of approximately 116%. The US ratio is considerably worse than France or Germany but not as bad as Greece or Japan. Further, the unfunded liabilities (obligations without funding sources) is well over $100T. This includes Medicare Part A at $36 trillion, Medicare Part B at $37 trillion, Medicare part D at $15 trillion, and Social Security at $17.5 trillion for a grand total of unfunded liabilities over $105T. America has economically fallen far in the past few years. This suggests that absent draconian measures to cut entitlements (currently above 60% of GDP and growing), the United States may face an environment of bankruptcy. We can not grow ourselves out of this mess without concomitant entitlement reform.
The US government spending as a percentage of GDP has reached an all-time high (excluding World War II). This has happened as more politicians promise more benefits to more people who vote themselves larger abundance. It is a failure of leadership and of the governed. It is both unsustainable and a moral failure of epic proportions. At the time of Jesus, Rome imposed a 5% inheritance tax and a 1% sales tax (compared to the average state sales tax in the US of 5.6%). The US government taxes estates at 35% for those with estates over $500,000. Suddenly, the oppression of Rome doesn't look so bad.
What is the Biblical worldview of economics? It is based on the Judeo-Christian principles of morality, freedom, and protection of private property. Capitalism is the economic system best suited to address the tenets of a Biblical worldview.
What should the Christian do in response to the precarious nature of the US economy and the increasing role of the state? The Christian should recognize that there are seasons of feast/famine where saving is essential to survive the bad times (Genesis 41:34-36) that debt can create bondage (Proverbs 22:7) that ignoring the signs of the times can bring disaster (Proverbs 22:3) and to trust in the Lord (Proverbs 3:5-6). Finally, the Christian should not run to the state (man) for rescue but to God (Jeremiah 17:5). Therefore, it is prudent to prepare for difficulties ahead, restrain spending and borrowing, strengthen savings behavior, embrace the morality of individual responsibility in uncertain times, and get involved in the culture (the recent Wisconsin vote is a perfect example) to assure we have righteous leaders and economic practices. Ethics and engagement matter. We are called to redeem the culture (Acts 15:1-31, Colossians 3:17, and Genesis 1:28).
Those that seek state solutions first may jeopardize their own freedom. Karl Marx said "There is only one way to kill capitalism- by taxes, taxes, and more taxes." Abraham Lincoln said "You can not help men permanently by doing for them what they could do and should do for themselves." Thomas Jefferson said "A government big enough to give you everything you want, is big enough to take away everything you have."
Christians must remember that God is more interested in our character than our comfort. In fact, our historical national character has been abundantly blessed by God and has led to the greatest comforts any nation has enjoyed throughout recorded history. Sadly, the dependence on the comfort of state provisioned solutions has effectuated national character decline. Christians must be salt and light to the culture and the economy. A national repentance of pursuing secular statism will certainly precede a national blessing of recovery. Our nation's economy is ultimately contingent upon the character of our people. The road we choose as individuals will determine the road we take as a nation.
 David Noebel, Understanding the Times, Manitou Springs, Summit Press, 2006, p.354.
 Calvin Beisner "Understanding the Times" Manitou Springs, Summit Press, 2006, p.355.
 Charles Adams, The Good and Evil. First Madison Books, Lanham, MD, 2001, p.101
 James Cook, The Free Market and its Enemies; a Book of Quotes, IRI, Minneapolis, p.108.
 Ibid. p.100
(CCU Student) Economic freedom in the USA is unmatched, right? Wrong, according to a policy briefing given today at The Heritage Foundation, which I attended as part of my CCU Washington semester.
Ambassador Terry Miller, Director of Heritage's Center for International Trade and Economics, spoke on the 2012 Index of Economic Freedom, co-published by Heritage and the Wall Street Journal. The Index scores 179 economies from around the world on ten factors in four major areas: rule of law (property rights and freedom from corruption), limited government (fiscal freedom and government spending), regulatory efficiency (business freedom, labor freedom, and monetary freedom), and open markets (trade freedom, investment freedom, and financial freedom). The Index is in its eighteenth publication this year. The Index in its entirety can be found at www.heritage.org/index.
The Index indicated that the United States actually fell from ninth to tenth in the global rankings. According to the data provided in the back of the index, the U.S has not enjoyed a status of "free" since 2009, when our rating was an 80.7. Since then, the rating has dropped 4.4 points to a 76.3, placing us squarely in the "mostly free" category, along with other countries such as Japan, Qatar, and Austria. This shift downwards comes not only from the recession itself; the economic policy choices made as a result of the recession have hindered economic freedom and growth. If we want our ranking to begin returning to a status of "free", we need to remove burdensome regulations and limit federal spending on failed stimulus packages.
On a global scale, economic freedom has been on the decline. Much of this is due to the recession policies, where governments attempting to spend their way out of the recession generally tend to limit free enterprise practices. There has also been a rise in federal government corruption and a general lack of the rule of law, which also tends to lessen economic freedoms. On the positive side, many countries are now lowering their corporate tax rates or converting to a flat tax system. This tax reform is a great way to entice businesses to start or remain in-country and has created competition between countries of who can have the best business-friendly environment. Inflation is also declining as markets are beginning to slowly recover from the recession.
The biggest gainer was Zimbabwe. Currently, Zimbabwe places next to last in the ratings, ahead of only North Korea, but they improved 4.2 points from last year to a 26.3. Key areas of growth were business, labor, and trade freedom, government spending, and property rights. Obviously, there is still much room for improvement, but it proves that with the right policies in place, everyone can move up in the world.
The biggest loser was Greece. This year, Greece placed 119 with a 55.4, dropping 4.9 points from last year. The two key areas of decline? Government spending and labor freedom. This correlates very well with the current debt crisis that has recently caused Greece to pass an austerity plan with the hopes of receiving more loans from the EU.
Overall, there is hope. As economies become more globally integrated, more opportunities for economic flourishing are created. Competition for markets will increase, driving governments all around the world to create better and freer environments for business. As such, poverty worldwide will decline, and quality of life will increase for everyone.
(Denver Post, Jan. 29) So now we’ve heard the State of the Union according to Obama and the State of the State according to Hickenlooper. We’ve seen Gingrich’s debating prowess and Romney’s tax returns, Santorum’s sweaters and Ron Paul’s scowl. But how much does that really tell us about the shape America is in? If we’re not the land of the free, we’re nothing, right? Economists James Gwartney, Robert Lawson, and Joshua Hall, like a team of doctors taking your vitals before surgery – the operation in this case being the potential removal of elected officials across the land – bring grim news that Americans’ freedom to better ourselves economically has slid drastically in this decade. Hardly the change we hoped for.The authors’ “Economic Freedom of the World 2011,” a data-rich report from the Fraser Institute in Vancouver, BC, uses five indicators to rank 141 countries on how well they allow you and me to work toward affluence, keep what we earn, and use it as we choose, free from government interference. Since 2000, our country fell down the scale faster than almost any nation on earth.Notice that this occurred under various combinations of unified and divided control in Washington. The unrelenting trend, with bipartisan culpability, has been “liberty yielding and government gaining ground,” as Thomas Jefferson warned. Notice too that the report’s data end in 2009. The humongous deficits and health-care takeover since then have only worsened our score.America still ranks 10th in the Fraser global index (exactly where we place in another valuable economic-freedom scorecard just updated by the Heritage Foundation). But look who’s ahead of us: Hong Kong, Singapore, New Zealand, Switzerland, Australia, Canada, Chile, the United Kingdom, and tiny Mauritius. Then blush to see the company we’re in among the getting-less-free-fastest club: only the Latin caudillo regimes of Venezuela and Argentina, and the North Atlantic basket cases of Iceland and Ireland, have regressed as badly as Uncle Sam did in recent years. No wonder big majorities are now telling pollsters they believe we’re in decline and will leave our kids a narrower horizon of opportunity.But not all the tidings are bad. Colorado as a state, when ranked against our 49 sisters and the 10 Canadian provinces by another team of Fraser Institute scholars in “Economic Freedom of North America 2011,” trails only Alberta (the oil-rich neighbor whom Obama spurned with his Keystone pipeline veto), Delaware, Texas, and Nevada. We actually gained one place over the previous year, 2008 to 2009.This result again, paralleling the experience in Washington, has been achieved even as party control seesawed at the state capitol. You can be sure that’s mostly because our Colorado constitution, unlike the federal constitution, has a Taxpayer’s Bill of Rights to restrain government growth. And partisans on both sides shouldn’t forget that the North America scorecard (EFNA) has a two-year data lag exactly as the world rankings do. Hence it doesn’t reflect the Democrats’ “dirty dozen” tax increases in 2010, nor the Republicans’ sad 2011 performance with a state enabling bill for Obamacare and no effort to repeal Bill Ritter’s car tax – er, fee.Fraser rates the 60 states and provinces on 10 criteria under the headings of size of government, takings and discriminatory taxation, and labor market freedom. If Colorado had passed Right to Work in 2008, we’d rank even higher. And that’s not just a bragging point. EFNA includes statistical proof that living standards rise in a state with almost 1:1 correlation to the rise of economic freedom. Occupying the best cabin on a sinking ship counts for little, however. If the Canadians, Brits, and Aussies continue outdistancing the U.S. in that precious freedom Jeb Bush has called “the right to rise,” all of our red- and blue-state political cheering will be just so much white noise.
(Centennial Fellow) Class warfare is alive and healthy in elite parts of America today. Yes, elite. Only elites — a tiny fraction of a fraction of the American public — are able to camp in public parks denouncing businesses, while other elites in high government offices and the media discuss them. The rest of us have to work.
So what do the elites want? From the repeated assertions of our president that the "rich" pay too little in taxes, to the anti-capitalism chorus of Occupy Wall Street, the echo chamber refrain seems to be that those who've earned less deserve what those who've earned more have. But in the idiom of Marxist political economy — the haves vs. have-nots — what do the haves, have?
It's not money, simply. It's wealth, of which money is merely a measurement. Money and wealth are commonly confused, but their differences are important if we're to respond persuasively to the unjust demands of some for the property of others and explain why the creation of wealth solves, rather than creates, the problem of poverty.
Imagine several people shipwrecked on an uninhabited island. Nothing survives the wreck, save only one item: a printing press filled with paper. As the people crawl to safety, they're exhausted. They stare in disbelief and shock.
But soon they begin to realize that they're hungry, thirsty, cold, unprotected from the elements. They're in dire poverty. They must think and act, or die. What shall they do?
Suppose one of them happens to be a member of the Obama economic team. He eyes the printing press and gets an idea: An economic stimulus plan of the kind he learned from his days in government.
He quickly prints lots of dollar bills and distributes them (unevenly) to his fellow castaways. They now have more money than they did before, true. But has any wealth been created? No. They still have no food, no water, no heat, no shelter, no anything. They remain as poor as they were before receiving the dollars. The stimulus plan stimulated nothing.
Suppose another castaway surveys the surroundings and figures out how to catch fish.
By ingenuity and sweat, he catches lots of fish, more than he can eat. Another sets out on her own to find fresh drinking water, collecting and storing more than she needs, while someone else gathers firewood, and another designs a shelter while yet another builds it.
Unlike the government economic advisor, these entrepreneurial castaways are not making, i.e. printing, money. Instead, they're creating new wealth by producing things that others find valuable.
But how will the others obtain some of the valuable things being produced? Unless they resort to stealing, they must produce something of value themselves in order to engage in exchange. Production of wealth stimulates production of more wealth.
Our motley crew of imaginary castaways began desperately poor, but now they are wealthy, relatively speaking. They prove an economic truth of human life: Production precedes consumption. Contra Keynesianism, it makes no more sense to "stimulate" consumption by printing more dollars than it does to hand a starving, dehydrated castaway a crisp new dollar bill. They also prove that the creation of new wealth is the solution to problem of poverty.
The genesis of all new wealth is the mind, not money. Wealth is born as an idea, and made real through work, whether physical or intellectual.
Wealth does not grow on trees — even apples remain worthless for human beings until someone thinks to pick them, eat them, and cultivate the growth of more. Wealth must be produced, and production requires work.
But people are unlikely to work productively if they have good reason to believe they'll be punished for their work product (say, in the form of progressive taxation), or it will be taken away (whether by force or regulations).
In world historical terms, the total amount of wealth on Earth remained relatively flat — and world poverty remained relatively constant — until the Enlightenment, when the global stock of wealth began to skyrocket. Why?
Individual freedom, property rights that allow a person to keep what he acquires, the rule of knowable, fair, stable laws that provide equal protection for all who live under them, and minimal government interference in the economy led to increases in the production of new wealth, living standards, and levels of philanthropic aid for the poor unknown in the annals of history.
Occupying Wall Street and envying the "rich" for not paying their "fair share" creates no wealth. It does not alleviate the plight of the poor.
But we know what does: Let's restore the conditions that stimulate the creation of wealth and provide have-nots an opportunity to become haves.
• Krannawitter teaches politics at Colorado Christian University and is a Centennial Institute Fellow. This article originally appeared in Investor's Business Daily.
(CCU Faculty) President Obama’s proposal to increase taxes by 1.5 trillion over the next 10 years in the name of “fairness” is merely a smokescreen for increasing revenue to temporarily maintain what is ultimately unsustainable government spending. As many conservatives have stated: “we don’t have a revenue problem; it’s a spending crisis.” A massive tax increase is not the solution to this problem.
President Obama is of the opinion that if he can just get some more money from America’s rich people, he can continue to spend at the record pace he directed from the beginning of his administration. He is also of the opinion that the government has greater wisdom when it comes to people’s money, greater than the very people who earned it. He is convinced that if government directs the economy, it will lead to a reduction in American unemployment. There are three major problems with Obama’s view of economics and his plan to reduce the deficit:
First, even if he could obtain all of the capital of America’s wealthy people, it would only temporarily suspend our deficit spending. Andrew Stiles at National Review Online summarizes the limited impact that even a 100% tax on our nation’s millionaires or even a complete confiscation of the wealth of nation’s 400 wealthiest citizens would have:
(1) The federal government will spend about $3.6 trillion this year (a rate of $300 billion per month), running an annual deficit of about $1.3 trillion. So, even if the IRS decided to confiscate every cent earned by millionaires in a given year, it would amount to less than half of the new debt we are taking on each year, and would barely be enough to fund the government for two months.
(2) According to Forbes, the 400 wealthiest individuals in U.S. are worth a combined $1.37 trillion. Confiscating all their wealth (not just annual earnings) would buy us another 4.5 months.
So even a tax scheme exaggerated beyond the levels proposed by President Obama and an even more unrealistic confiscation of wealth would do no more than keep us going at current spending levels for a few months!
Second, President Obama continues to argue that our wealthiest citizens aren’t paying their “fair share.” Fairness is a subjective standard. Nevertheless, when you consider that between 47% and 51% of Americans are paying ZERO in federal income tax (depending on which measurement is being used), that the top 1% of earners pay 38% of all federal income taxes, and that the top 10% of earners pay 70%, there may indeed be a fairness issue, but is probably that the rich are paying too much as a percentage of total revenues.
Finally, the issue must come back to who knows what best to do with money earned. I doubt that Warren Buffet has always felt that he was taxed too little. While he was an ambitious young businessman, seeking to turn small investments into large gains, Buffet, like most businessmen, must have known that with every dollar he possessed, there was an opportunity to make more. And in the process of turning his thousands of dollars in investment into billions, he would be making possible new businesses: businesses that hired one, ten, one hundred or perhaps thousands of new employees.
With each of these employees having new spending power that would have generated new economic activity. And in some cases moving people off of government assistance; and, yes, creating new taxpayers. Warren Buffet used to know that this is the key to growing an economy, reducing unemployment, and creating new wealth. Unfortunately his sidekick, President Obama, never did. Combined, the two are a danger to American prosperity.
We don’t need new taxes and new government spending. We need businessmen like the old Warren Buffett to use their talents and their entrepreneurial energy to grow the economy, in an environment with will minimal government interference.
(Centennial Fellow) President Barack Obama, who has been working like the devil to wipe out jobs in America, finally said he was going to give us less government to help more, although he soon enough was pledging more government to help less. Union members cheered him while one of their bosses went a step further. "President Obama, this is your army," Teamsters President Jimmy Hoffa said in introducing the commander in chief at a Detroit rally on Labor Day. After asserting the Tea Party was waging a war on workers, he yelled, "We are ready to march. Let's take those sons of guns out and give America back to an America where we belong." He was not quoted as saying "guns," of course, and neither, in their more sober moments, have unions been saying how much they love all the president has been doing for them. Unions representing miners, electrical workers, mechanists and more were reported in one recent compilation as agonizing over various EPA regulations and other interventions that will cost them not just a few jobs, but tens of thousands. Have mercy, sir, they have pleaded. And suddenly, after news stories that unbelievable misery had just become worse, there Obama was, giving us at long last a more angelic, less leftist, reasonable persona, announcing he would stop his EPA's smog assault sure to cost the economy billions in employment opportunities. Environmentalists wailed that unconscionable pain and suffering would result. That's less likely than a drought-caused flood. The ozone in the smog is too itsy bitty to hurt, and convincing evidence proving otherwise is zero. But in Detroit, Obama transmogrified into Mr. Hyde again, talking about spending more to create more jobs with more infrastructure projects. You remember all the good that did us the last time - increasing debt and its threat while shovels weren't ready? Does he really want to repeat policies diminishing America? That's exactly what those policies have been doing, and if you think differently consider these few items taken from a longer list of Obama's failures by Peter Wehner of the Ethics and Public Policy Center: losing 2.2 million jobs; a 9.1 percent unemployment rate up from 7.7 percent; three years of trillion dollar deficits in a country that never had one before; a two-and-a-half year $4 trillion debt increase that is greater than what George W. Bush was able to give us in eight years -- and a record increase in poverty. This is what he meant by hope and change? None of this came easily. It first off required disbelieving the libertarian-preached truth that virtually all that borrowed money was less likely to help the economy than if left to free market decisions. It required juvenile anti-corporate cursing, negligent and worse energy policies, tax threats and growling at states trying to tame public union extravagance. It required the future-threatening encumbrance of already malfunctioning Obamacare, a National Labor Relations Board mistaking the United States for the expired Soviet Union and a vast, near despotic array of EPA and other regulations that were death to both existing jobs and entrepreneurial ambition to no discernible avail. This president, who is forever playing blame games while taking reckless, un-presidential pot shots at the opposition, has had opportunities for compromise, maybe the best being a plan from leaders of his own debt commission on both revenue-raising tax reforms and serious spending limits. But no, that would keep in place the old America he promised he would fundamentally transform. He kept thinking of big time redistribution, colossal projects, a country of, by and for the state, all those joys. Give it up and get real, Mr. President. You are setting the middle class back like it has only once has been set back before, and demolishing the working class. Get back on the deregulation track, quit the spending, start compromising, forget bold new adventures in Europeanizing us and offer up some competence and leadership.
('76 Contributor) The definition of insanity is doing the same thing repeatedly, and expecting a different result. Are the President and his administration insane to repeat their failed policies?
* Grants to states to prevent the layoff of public employees is no more than the Democrats taking care of a key constituency: not stimulative! Government jobs don't count.
* Continually extending the unemployment benefits only incentivizes people to not look for work and increases the deficit. Not stimulative!
* Infrastructure work was supposed to be underway by now from that last "stimulus"! Where is it? Why would another tranche now be any different? Even so, infrastructure work is done by contractors with few employees and lots of machinery. They descend on a community for a few weeks and then they are gone, leaving a fresh bridge or a newly paved stretch of highway. Nothing sustainable about that!
* Repairing public schools, building community centers, etc, are not simulative: they produce no sustainable demand for goods and services. Once the work is done, the economic activity dwindles to its former stagnated level.
The only result of the last "stimulus" I see in my own life is a repaired barb wire fence around Roxborough State Park. The fence looks good. But now that it's up, it's just sitting there. Yet I see more empty store fronts in my local Roxborough Village shopping mall, the result of more government taxes and regulation.
The Administration ideologically can't face the option of cutting taxes (it would be rewarding "fat cats") or cutting regulations ("leaving the people and the environment unprotected from evil greedy businessmen!") and encouraging people to build their own businesses! When a business starts, it creates an ongoing self-sustainable demand for goods and services, and jobs! Government jobs, on the other hand, can only be sustained by confiscating resources from more productive areas of the economy or by printing money. Both are detrimental and unsustainable.
To pay half a million morons to rake leaves in National Parks isn't job creation! It's a temporary redirection of welfare money, affecting no change whatsoever in the GNP!
The reason the government persists in these failed policies is that the Progressive Marxist-Leninists in the White House want the money (and the power that goes with it) to flow through their hands in Washington! They apparently don't care if the economy suffers! (Better to rule in hell than serve in heaven!)
And it's telling that when the President has a "job summit" he sits down with the CEO's of BIG BUSINESS (who for the most part are laying off and closing plants in the US owing to burdensome regulation and taxes and opening plants and hiring employees in China or India!) The President seems to despise small business, the real engine of job creation, because he can't have one of his Czars sit down at a table with thousands of small businessmen and tell them what to do like he can Big Bank CEO's!
To close, I don't believe the President and his administration are insane. But apparently, their long term plan for disaster is to eliminate small business with taxes and regulation, and to leave to remain only controllable big business.
(CCU Faculty) We often hear from President Obama that “the rich should give back.” But what have they taken? Nothing!What have they given?
** Jobs: if you have a job, thank an entrepreneur.
** Goods and services: things we all need to survive are provided by these entrepreneurs.
** More than their fair share of taxes: the richest 20% of Americans pay over 86% of the taxes, while the poorest half of Americans pay no income taxes at all.(Heritage Foundation)
** Charitable Giving: the richgive the lion’s share to charity, while Liberals have a poor record of giving to charity, believing it is the government’s job.(NicholasKristof, N.Y. Times)
Take Steven Jobs, for example. What has he taken from the rest of us? Nothing. What has he given? Tens of thousands of jobs, an expanded tax-base, the latest high-tech innovations making all of us more efficient and driving down prices.
Yet President Obama said recently that Steven Jobs has not adequately“given back”.What has Steven Jobs taken that he should “give back”? The jobs Steven Jobs provided are not the unproductive ones Obama claims he will provide in his many speeches. In fact,these “jobs” have not even been produced, as unemployment continues to rise.
Who are those who have taken?
** Government takes from the paychecks of the productive to fund theirunproductive schemes.
** Politicians take from tax payers to fund their pork projects, which buy them votes for reelection.
** The indolent take “entitlements” from the government. What “entitles” them to take from the rest of us who produce? “Entitlement” means getting what you deserve. What did they do to deserve the money others earned? Call it government enforced charity, not “entitlement”.
On Thursday night President Obama will tell us his plans to provide more jobs. Can he really create jobs? When the government hires someone, where does the money to pay these new government employees come from? From taxing the rest of us, from government borrowing more and driving us deeper in debt, or from printing up more paper money causing inflation down the road.
Each job saved or created by the Obama administration has cost us $533,000. (Dan Farber, CBS News) Jobs created by the private sector cost us nothing. In fact, for each unproductive job the government creates, two productive jobs in the private sector are destroyed. (Rick Santorum)
The best jobs program would be for the government to get out of the way of those who really produce jobs, by no longer punishing the productive to reward the unproductive, by lessening the regulatory burden on the productive, by providing the economic stability so that the real job-creators can anticipate future costs, plan the expansion of their companies, and hire more people.
If a government continually tries to soak the rich, they lose the very people who made their country productive. Millions in recent centuries came to America for opportunity. If our government now limits this opportunity, people will leave in droves. Millions fled the Socialist experiments of the 20th century to seek freedom and opportunity in the West. Why abandon what has proven successful, only to copy the failed policies of failed regimes which we thought were on the ash heap of history?