Conservative News & Commentary

from November 2012, Economics

Nov 20, 2012 — by: P. Henry
Categories: Economics

This 90 second video says it all.

When will the people take back control of a government that has become out of control?

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Nov 14, 2012 — by: A. Smith
Categories: Economics

Barack-obamaPresident Obama just announced he wants to solve the "fiscal cliff" by raising taxes on Americans (and American businesses) that earn over $250,000 annually. Mr. Obama estimates this will create $1.6 trillion in revenue over the next ten years. However, as with most Left of center politicians, he is wrong in thinking that raising tax rates will lead to the same kind of increase in Treasury revenue. His error is thinking that Americans will behave the same way before and after a tax increase. Americans rarely do. Most Americans, when faced with an expense change behaviors to avoid that expense or to lessen its impact. "Rich people" are notorious for this, and are rich because they are smart money managers. 

Changing behaviors can also be seen on the other side of the fence. When tax rates have been lowered, private savings and investment has boomed, causing an economic surge. Why? Because Americans and American businesses have more money, and most Americans change their behavior and do something good with that money. Money in private hands is always more efficient than in public hands. And that efficiency leads to productivity and productivity to growth. 

However, the main problem with the President's solution is that he has misdiagnosed the problem. The Federal Government's problem is not that Washington does not have enough money. The problem is that Federal Government is spending too much. In other words, the Federal Government has a spending problem. Tax increases do nothing to fix that. Nothing. 

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