| VISIT RANDOM NOTES |
| The Catch
A Rabbit Theory PART 1 - The Tax Cut Lie |
The time has come to revisit the "Catch A Rabbit Theory" There is a whole lot of conversation concerning the economy right now, so it seemed the most logical place to start. You'll hear a lot of numbers being tossed out there. Big numbers. Scary numbers. Million Dollar budgets. Billion dollar shortfalls. Trillion dollar debts. It's all smoke and mirrors. If you want to understand the economy, you only need to understand the One Dollar Bill. Everything else is being expressed in multiples of that single unit.
Much of today's economics chatter is centered around the idea of tax cuts. Tax cuts are the hallmark of GOP mantras. The other day I heard one of the conservative mouth pieces on the radio, trying to help sell the plan. The conservative idea is that if you cut taxes, that "honest, hard working, highly motivated" people armed with their own money will reinvest their cash windfalls back into their companies, employ more people, and get the economy going again. This is commonly called the "Trickle Down Theory", and it seems logical at the corporate level. I believe that if corporations are allowed tax breaks, that trickle down might work (if the windfalls don't find themselves grafted to a big bonus for upper management) Once the cash swells in the corporate coffers, they will begin to increase construction, and infrastructure updating. This alone would bring some workers back into the work place, and that would help the economy. Even if the beneficiaries of large tax cuts do as they did with the Regan tax cuts, and spend the windfalls on new boats, and Cadillac's, jobs would still be generated eventually. Barnacle removal services will surge, as well as the earnings of automotive detailers, but would the economy actually be more stimulated in this case than it would be if we handed the same windfalls over to the indigent community. They would immediately spend the money at 7-11 or at a local bar or with a corner drug dealer, and the economy would benefit far more quickly than it would if we have to wait for the barnacles to accumulate.
So. The tax cut proponents are at least disingenuous, and at most they are flat out lying. The Government holds the money that it collects from taxes, and it does not magically disappear. They can give it back to people, or keep it as graft for themselves. Both options will generate extra money for people who will spend it on toys. That's cool the toys are either being made by or served on a tray by minimum wage employees, so the economy is eventually therefore stimulated. Otherwise the government can redistribute the tax booty to FEMA, Farm subsidy or welfare recipients. They will eat the windfall, or use it to pay for housing necessities, and the economy will be immediately stimulated.
RANDOM NOTES™
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