Dear Friends,
It seems to me that any plan to balance the US budget that includes raising taxes is a betrayal of the Tea Party movement. Remember TEA stands for Taxed Enough Already? The reason for the Tea Party movement is that the American people, people that have been steeped in market theory, are rational self interested people.
Being Rationally self interested we understand that, even though the ride seems fine now, the rapidly approaching rock ledge will stop us far too quickly for our comfort. We have been asking our lawmakers to apply the brakes for awhile now but the music must be too high. Our increasingly frantic pleas for some slowing to our breakneck speed has been met with the driver stomping down on the pedal. Panicked the American people are reacting as anyone would in a life threatening situation. In this case economically life threatening.
The American people’s spending is measured every day and in every way. Daily reports come out, stressing that this or that sector, has seen a slipping of consumer spending. Whole industries stock value rise and fall on consumer sentiment for that afternoon. Fortunes are made and lost over a rumor about what Americans are going to buy next.
But what about the American consumer? That greedy, self absorbed, crass, purchaser of goods, what about her? Accumulator of stuff for no other reason than to… Shore up the world’s economy?
That gal is being stretched economically. Her husband has been laid off and there are no small startups to provide another, perhapse because the government has been propping up inefficient companies, at the expense of entrepreneurs, for political gain. Her cost of living is rising fast even as her disposable income is shrinking and she watches in horror at the mushroom cloud of government debt rising over her head.
The answer, according to the Elite, is to raise her taxes, say only $.15 a gallon. Or perhaps eliminate the exemption on mortgage interest? What is a few thousand dollars a year out of the American consumer? Nothing really, what, only 5% more taken from her.
What will she have to do to make up for that mere 5%? Lower her standard of living, (buy less stuff). That is the effect of the cause, i.e. raising her taxes. She is an American and knows this even if only on a subconscious level. She also understands that Wall Street is watching her every move. If she stops spending on this or that people will loose there jobs, maybe her. How will she pay taxes then? Oh… they will just go up more to make up for her loss…
When something burns it is really an oxidation reaction. The carbon compound is heated to a sufficient level to start reacting with the oxygen in the air around it. The nature of the reaction is such that sufficient heat is generated that it produces a surplus. That surplus heat then causes more of the combustible material to react with the surrounding oxygen. The reaction is said to be self sustaining. Put another way a feedback loop.
Many situations can cause a feedback loop or self sustaining reaction to occur. The scenario I have related is one. The funny thing is that the “ignorant” masses understand this, as I said, perhaps on a subconscious level, but they understand it. The droll part is that the Elite do not. They understand little of what is in front of their eyes. But we are the ignorant masses.
The Elite are like a crowd of hoodlums siphoning gas at night. Eyes stinging with gasoline fumes mouths dry from spitting out gas fumes hanging in the air, they can’t quite see, so one asks, “Gimme a light.” The guy behind flicks his bic…
The problem with spending is spending; not taxing.
