Dear Friends,
It seems to me this idea about instituting a value added tax in the US is insane. The economic recovery is shaky at best and may be faltering. To add more tax burden to the American citizen is a recipe for disaster.
2011 will amount to the biggest tax increase in history when the Bush tax cuts expire. The marginal tax rate for almost everyone will go up. Not to mention the taxes the new healthcare law will institute over the next five years. The tax burden of the American citizen will go up at an unprecedented rate.
While at the same time we productive citizens, who pays taxes, have seen our income go down. We have witnessed our ability to change jobs or simply get a job evaporate and we are poised to go into a huge inflationary cycle, (especially when it comes to energy). Raising taxes will only further denude us of the largess to fund any possible economic recovery.
Small business is the main driver of job growth anywhere. We see empirically that where there are road blocks to getting into business there is less economic growth. The more impediments to starting a business the higher the natural rate of unemployment, lower GDP growth and decreasing standards of living.
We have Greece as a model to conceptualize an economy where the people have become dependant on government. There is no real GDP growth in Greece. The only industry there is Government and some agriculture (that is subsidized by the State). Greece exports nothing. Greece builds nothing, it only taxes and spends. It is apparent that, using the Greek model, it is not feasible to tax and spend into wealth. Every nation every time it has been tried has failed.
The Roman empire was taken down by the dole. The dependant proletariat was the destruction of Rome. The Weimar Republic was crushed under the weight of runaway inflation caused by foolish monetary policy. The Soviet Union collapsed under the mass of spending without GDP growth to back it up. The list is endless. These are only a few of the strongest to succumb to the siren call of taxing and spending. But the Obama administration is determined to try it again.
One thing we can always count on is that politicians are liars. They lie like we breath. It is natural to them. Those that don’t quickly have to find other employment. People simply will not tolerate an honest politician.
So when politicians say, they want to create a new tax to offset some other, I know I am being lied to. To believe otherwise is to deny reality. Fantasy can be fun but is not very productive. Today politicians are claiming they want to create a new tax in the US to offset some other taxes. Knowing their nature only a fool or an accomplice would believe it.
The moral to the story is… Watch and see. History will have another fallen nation to add to the list of nations that have been caught in the trap of government spending. Maybe this time people will learn from history… but probably not.
I have never seen a science teacher apologize that I would be dashed against rocks if I stepped off a cliff. I have never seen a math teacher apologize that 6 divided by 2 equals 3. I have also never witnessed a shop teacher apologize that a spinning chain saw cannot be safely dragged across a person’s throat. But I have seen many economics teachers apologize about economic principles.
In a few hundred years people and economists will open their eyes. Maybe then they will see that it isn’t evil that if a person steps off a cliff they will fall. Or if they spend all their retirement of jelly beans they will be broke.
God holds both to their actions but Society lets the one be responsible… but not the other.
I am sure the administration feels it has more wisdom on the subject…
