Freedom creates optimal efficiencies because it demands the best from people and the best is always the outcome.  However, one of the byproducts of efficiency is creative destruction.

Take, for example, the typewriter.  At the height of the typewriter industry there were two notable typewriter manufacturers (there were more than two, but I am only referring to two in this example).  Both companies grew into large corporations and bought out competitors in an effort to ramp up growth.  Eventually the personal computer was invented and an entirely new degree of competition entered the typewriter industry.  One of these two companies did not have the foresight to adapt to the changing free market – it kept producing mainly typewriters.  The company eventually declared bankruptcy in 1995.  That company is Smith Corona – most of you have probably never heard of them.  The second company in our example decided to diversify and enter the high-tech world of manufacturing computers and computer parts as well as a number of other industries.  That company is still around today and recently it sold its computer manufacturing division in an effort to slowly exit the manufacturing industry and expand itself into the consulting industry.  That company is one of the largest American companies today – International Business Machines Corporation (IBM).  The point of this exercise is to point out that freedom demands the best and creates the best.  IBM boasts revenues of about $100 billion each year because it has provided some spectacular services and products to its customers.  Smith Corona declared bankruptcy and is still struggling producing only two models of type writers because they have failed to adapt to the market and are not providing their customers with the best products for the lowest prices.  Just take a look at the two companies’ websites (www.ibm.com and www.smithcorona.com) to get an idea of what I am referring to when I say “best.”  This example of how freedom fosters the best of all things and weeds out those things that are inefficient and unproductive ends with a happy ending – IBM continues to operate and has probably provided more for Corona Smith’s old customers and employees than they would have ever had if it had not been for IBM.  Most importantly, the government did not get involved.

Other endings are not so happy.  Let’s consider the example of our automobile industry.  Since the beginning of our automobile industry many automobile manufacturers have opened and closed their doors.  Some names include Pierce-Arrow, the American Motor Car Company, Hudson Motor Car Company (acquired by American Motors Corporation), American Motors Corporation (nearly bankrupt and acquired by Chrysler and rebranded as Eagle), and Eagle (defunct since 1998).  Despite all of these companies closing their doors, the American economy continued on and the people that used to manufacture these vehicles found new jobs.  The exits of these companies were at the hands of competitors that offered superior products at lower prices, just as the troubles of GM and Chrysler in today’s day are at the hands of competitors offering superior products at lower prices.  However, because people all have big hearts (or disgustingly crooked intentions, depending on your angle) and look out for their fellow man, the elected officials of the United States Government decided we simply could not put all of the GM and Chrysler employees out of work (even though most of us clearly did not like what they were producing).  As such, the government stepped in and decided to tax us all to “prop-up” these companies.

In the United States, our freedoms have been trampled by people with the very best of intentions.    Most of the United States citizens in favor of “bailing out” GM and Chrysler (excluding congressmen, senators, anyone in the executive branch, any employee of GM and Chrysler, and any UAW member or representative) believed we should spend tax dollars on taking over the companies and redistributing the equity how President Obama saw fit because it would help the employees of these companies.  Some even listened to the politicians’ nonsense and believed that taking over these companies would somehow improve the economy.  Either way, most people believed that it would help their fellow Americans to nationalize two thirds of the United States automobile industry.  They had good intentions; they just did not have the knowledge to foresee that their actions would actually harm most Americans.  Most tragically, it would harm innocent Americans that had previously had no stake in GM or Chrysler and would still pay the price of nationalizing them.

Each dollar you spend is a type of vote.  You are voting that the product or service you acquire is better than its competitors.  When you buy a ticket to The Hangover rather than Paul Blart: Mall Cop, you are voting that more movies be made like The Hangover than Paul Blart.  Similarly, when Americans went out and bought Toyotas, Hondas, and Fords, they were voting that more vehicles be produced like those they bought than those produced by GM and Chrysler.  Now we do not have the freedom to decide.  Now the government decides for us.  We are each taxed (some more than others) and we have all therefore given our money to GM and Chrysler, even though they created inferior products.  Furthermore, this occurrence puts a big vote in from all of us that it doesn’t matter what kind of filth you put out of your factories – if you employ enough people the government of the United States will tax its citizens more to pay for your company’s shortcomings.  What do you suppose this will do to the research and development of these companies?

Because the auto-industry has been the focus this year it is easy to pick on, and I will continue picking.  Consider the subsidies the government gives buyers of hybrid vehicles.  These also come from the best of intentions (for most people).  Generally, the supporters of this subsidy want less vehicle emissions to enter our atmosphere in hopes of keeping the air clean and somehow (this is also bullshit . . .) cool our planet (apparently a cold planet is better than a warm one and I don’t think anybody knows why they feel that way).  No matter your politics, it is clear that most of these people have good intentions.  However, they are stripping the rest of us of our freedom and they are tampering with creative destruction.  They are effectively making each of us pay for part of a hybrid car, whether or not we want one.  Furthermore, they are making people that may not otherwise buy a certain model or brand of car, buy said car.  This creates a situation whereby people are voting for one type of car with their dollar because it is now cheaper (because we are all pitching in) than the car they would have otherwise purchased, even though the other car would otherwise be superior for that given price.  This then tells the automobile manufacturer to make more of the subsidized car and less of the car that is actually superior.  If the hybrid cars truly were superior cars for the price then people would naturally be lining up to buy them.  I can’t be certain because they are already subsidized, but I am confident that if there were not subsidies for hybrids that the Toyota Prius would still sell well because it gets great gas mileage for those people that are concerned with that.  We do not need the government to tell us (or “nudge” us as Cass Sunstein would say) what we should buy, sell, do, or believe.  If a product is better and cheaper then it will prevail.  If it is overpriced and lousy then it will be driven out of the market.  The same can be said for all things, not just automobiles.

These are but a couple small examples, but the lesson holds true to all things.  One of the most beautiful parts of a free society is that it embraces the best and discards the worst.  It is only when the government steps in to press its will upon the citizens of that society that things go wrong.  No matter the intentions of those people that push for new laws and regulations, one thing stands true about them: they feel they can run your life better than you can run it yourself.  I disagree.  I believe we are all capable of making decisions for ourselves.  Sometimes you and I will be wrong and we will pay our own price for being wrong and, likewise, we will reap our own benefits from being right.  But, no matter how often we are personally wrong, with enough people acting freely the world will inevitably improve and each and every one of us will be better off in the long run.

Please Comment: I’d like to hear if any of you can come up with a situation in which creative destruction is more destructive than creative.

We can hope that history records today as the start of the tax revolt of 2009 with the Vote Heard Around the World in San Francisco County.

For those of you who are unaware, today, May 19, 2009, the state of California held a special election with a bunch of propositions to increase fees and taxes in order to cover the state’s massive deficit, caused by out-of-control spending on behalf of the state government – Republicans and Democrats are all to blame for California’s huge budget mess.

Today, the citizens of California had a clear choice: Close the budget gap by enacting more fees and taxes, or close the budget gap by closing down government services. After all, Governor Schwarzenegger made it perfectly clear that the state was going to have to make serious cuts if these ballot propositions failed. One might make the argument that Californians also felt an option on the table was that if they didn’t fund it themselves, then the federal government would write them a check – but that is so despicable that I won’t even assume that the liberals out in CA would try to avoid paying taxes themselves, since they seem to think taxes for the rest of us are something we should be proud to pay.

Regardless of what motivated the voters to vote the way they did, I see glimmers of hope coming out of this election – true glimmers of hope, not the glimmers of hope Barrack Obama talks about in the economy. These are the glimmers of hope that show people are taking a stand – they have had enough, and they are saying “when.”

With 80.5 percent of the precincts reporting as of the time I write this, almost a full two-thirds of the people have voted against fees, taxes, and spending that will strap the backs of the citizens of California with so much weight that they will not be able to lift themselves out of the recession. (Note: This is important to the rest of us because CA’s economy is the 6th largest economy in the world – by itself! CA tanking is bad for us all.)

They voted no to the ridiculous propositions for the “Rainy Day” Budget Stabilization Fund, the Education Funding Payment Plan, the Lottery Modernization Act, the Children’s Services Funding, and the Mental Health Funding. All of these by more than 60%. And, to the proposition on whether or not elected officials salaries should be frozen, Californians voted approximately 75% that elected officials’ salaries should be frozen.

But we can’t count our chickens before they’re hatched. 19.8 percent of the votes still need to be counted. However, what struck me was not so much the total vote count as the count in one particular county.

San Francisco County, recognized around the nation, if not around the world, as one of the most liberal, if not THE most liberal, counties in the United States, with 100% of its votes counted, has voted against taxation (with the exception of education), and in favor of freezing the elected officials’ salaries.

I would have voted against all of the propositions to raise taxes, including education; however, if education is the one place where San Franciscans waivered, then I salute them. They voted against taxation (except for education) with “No” votes ranging from 53% to 58%. That is ASTOUNDING for this counting. Absolutely astounding, and a true glimmer of hope.

The education proposition passed 52 to 48, but in the liberal’s shining city by the bay, this is not a dramatic victory. After all, Barrack Obama received 84% of the vote only 6 short months ago.

Winning 52 to 48 is not really a victory when you consider how badly Barrack Obama beat John McCain in this county. The propositions that did fail with “No” votes ranging from 53 to 58% of the vote, however, should be hailed as the “vote heard around the world.”

No matter what the final statewide outcome, today was a fantastic day for America because of the results of the voting in San Francisco County.

Friedrich Hayek in The Road to Serfdom warned us that the road to fascism and serfdom is paved with liberal (note: “liberal” here in the classical sense of the word – of and pertaining to freedom) rhetoric, just as the road to Hell is paved with good intentions.

According to Hayek, it was De Tocqueville who succinctly put that “while democracy seeks equality in liberty, socialism seeks equality in restraint and servitude.” It was suspicions of socialism such as the ones expressed here by De Tocqueville which forced the rise of a new kind of socialism: “democratic socialism.” However, this socialism, according to Hayek, came wrapped in the language of freedom, and, in fact, promised a “new freedom.”

This new freedom was not “freedom” as we have come to understand it from the principles of the American Revolution: freedom from taxation without representation; freedom from a tyrannical government; freedom of the press; and any of the freedoms guaranteed by the US Constitution and Bill of Rights. No, it was not this type of freedom, but, instead, an “economic freedom.” In essence, it was a promise of freedom from the toils of everyday life that are required to put a roof over your head and food in your belly. Democratic socialism promised freedom from economic hardship.

These promises of freedom from economic hardship ultimately lead to harsh fascist rule, where a person’s true freedoms (i.e. the freedoms guaranteed to us, as Americans, in the US Constitution and Bill of Rights) came to an end in pursuit of bringing about economic freedom. As anyone who has been educated in even the historical events of the last one or two generations of Americans should know, the fascist rules brought about by these promises of freedom from economic hardship brought about no such thing. In fact, poverty among the common people in the Soviet Union ran rampant. The Soviets were unable to afford enough to cover even the very most basic human needs, and this has been shown to be a direct result of communism, which everyone agrees does not work.

In the 1980s, the United States ended what had become a full fledged war against communism under the leadership of President Ronald Reagan, who, as Margaret Thatcher said, “…ended the Cold War without firing a shot.” Ronald Reagan took the reigns from Jimmy Carter, and quickly put an end to high taxation, government intervention, and the energy rationing of the 1970s which were thought to be a fact of American life that would exist into the foreseeable future.  Reaganomics, which, as Reagan once humorously pointed out, the media stopped using as a moniker the program once it started working, was responsible for the tremendous growth in the United States throughout the 80s, and for igniting anew the flame of passion for individualism, freedom, and a nationalism rooted in pride for the principles of individualism and freedom in the United States.

Now, less than a generation later, we are again facing the battle of collectivism versus individualism, and the collectivists are represented by a revered man who speaks with great eloquence: Barrack Obama. Barrack Obama, much in the way that collectivists before him took control of liberal (note: again, classical liberal) economies throughout the world, has wrapped his package of socialism in the rhetoric of freedom.

On May 23, 2008, Barrack Obama said this on the campaign trail:

“What all of us strive for is freedom as FDR described it. Political freedom. Religious freedom. But also freedom from want, and freedom from fear.”

“Freedom from want” is precisely the kind of perversion of freedom that was used in the past to bring collectivism into individualistic societies – the collectivism that destroyed the true freedoms of the people who inhabited those societies.

On May 13, 2009, speaking to ASU graduates at Sun Devil Stadium, President Barrack Obama exposed his socialism for the world, if they were listening:

“In the face of these challenges, it may be tempting to fall back on the formulas for success that have dominated these recent years. Many of you have been taught to chase after the usual brass rings: being on this “who’s who” list or that top 100 list; how much money you make and how big your corner office is; whether you have a fancy enough title or a nice enough car.”

…

“The leaders we revere, the businesses that last – they are not the result of narrow pursuit of popularity or personal advancement, but of devotion to some bigger purpose….”

Later in his speech, Obama talks about setbacks and how we shouldn’t let setbacks stop us. After all, he points out, “look to history…. Colonel Sanders didn’t open up his first Kentucky Fried Chicken until he was in his sixties.”

There is no question about what Obama is saying here: forget about your own success, at least in the terms of success as a capitalist society like the United States would define success, and instead devote yourself to a “bigger purpose” or common good. He would prefer that people are devoted to the collective US population above themselves. This, by definition, is collectivism.

And what “great purpose” was Colonel Sanders after? Did he want to make sure everyone in America got to have some of his fried chicken? Did Sanders sell his chicken at cost, or even at a loss to help those in need? No. Colonel Sanders started KFC because he wanted to make money. He was chasing one of the “usual brass rings.” And he was successful. Rumor has it that KFC – after nothing more than profit – has lasted. Obama’s own example refutes his point.

This, my friends, is the face of socialism. Friendly and magnanimous as this face of socialism may seem, the belly of socialism would like nothing more than for this face of socialism to take you into its mouth, grind you up (stripping you of your freedom) and consume you in its bile.

It is said that “those who forget the lessons of history are doomed to repeat it.” I, for one, do not want to be sitting in one of the gas lines of the 1970s, and don’t want to be ruled by a fascist government like we have seen around the world after this family-friendly face of socialism has reared its ugly head.

Beware of what is to come. Socialism may sound appealing, but we know where it ends.

One of the greatest lessons of economics that is simple, yet so often misunderstood, is something that Art Laffer put to me very succinctly: “Whatever you tax, you get less of.”

In general, people seem to understand this.

We tax cigarettes because, at the margins, less people will smoke if smoking costs more. We, as a society, recognize that smoking will cause death; however, even though we know that every cigarette marginally diminishes the smoker’s health, we don’t criminalize smoking. Instead, we just tax cigarettes in hopes that this “sin tax” will help to influence some people not to smoke. Of course, economists also recognize that the demand for cigarettes, especially to a nicotine-addicted person, is relatively inelastic, and therefore a cigarette tax is a good source of government revenue. However, demand elasticity aside, we do recognize that when we tax cigarettes, less cigarettes are smoked. Whatever you tax, you get less of.

When it comes to income, it would seem that people understand the concept, but their application of the concept isn’t well thought out.

Given the class warfare that seems to dominate today’s political conversations – and, with 5% of the population paying the bulk of the taxes, it’s politically expedient for politicians to promise the other 95% benefits at no cost to them, but for which the other 5% will be forced to pay – I think it’s safe to say that there is a fair amount of the “have nots” thinking that there are too few “haves” and too many “have nots” and that by increasing taxes on the “haves” we will simply get less “haves” and we will, to quote Barrack Obama, “level the playing field.” Oh, but that were true.

Here’s the problem with that line of thinking: Remember, whatever you tax, you get less of. What, exactly, are we taxing when we tax those “rich” people? Are we taxing their assets, or are we taxing their current year income? We tax current year income. So, what do we get less of? We get less high income earners.

In the short term, we get less high income earners because the government takes some of their earnings and redistributes it (through direct redistribution and indirect redistribution in the form of government operations and projects) to those who earned less income, giving a whole new definition to the term “unearned income”, as defined by the IRS currently anyway.

In the long term, we get less high income earners because people substitute away from those activities that earn higher incomes. Earning a lot of money is hard work: there’s greater responsibility, greater stress, greater risk, and more years of hard work on the front end to be able to take on everything that comes along with activities that generate more income. It’s far easier to earn less money: anyone can flip a burger. Also, dual income families where income is roughly equal between the husband and wife may decide that if they are going to lose 50% of their income to taxes, they would be better off having one of the two stay home, thus decreasing the output of the economy as a whole because less people are producing goods and services.

Now, the question is do we really want to have less high income earners? Is that really what those who want to level the playing field want? I posit that those who vote to level the playing field often think of people like Warren Buffet and Bill Gates as those who should contribute more in order to level the playing field.

I’ve got news for you: Warren Buffet and Bill Gates could both not earn a dime for the rest of their lives, not pay any income taxes, and live perfectly comfortable lives. In fact, they could not earn another dime and be wealthier the day they die than almost any other American. Why? Because they are wealthy today. What’s worse is that if we enacted high taxes, we would probably find that their wealth would increase compared to the rest of the population. If their relative wealth were to increase, that would be precisely the opposite of the “level the playing field” crowd’s goal. This is what we in economics refer to as secondary effects, or unintended consequences.

When we tax income, we just ensure that we have less high income earners. Let’s think about what that means; let’s examine the secondary effects.

Average Joe is a hardworking American. He has been working at a fast food chain since he was 16, and has worked his way up to a district manager. He’s 40 years old, making $65,000.00 per year, has a decent amount of debt like a lot of Americans, and he desperately wants to take his experience to open his own restaurant, but he needs to save around $250,000.00. Given that Joe is carrying about $30,000.00 of credit card debt, trying to save that money is difficult, and taking on even more debt in loans is a substantial risk at his age.

Joe has worked so hard over the years, and distinguished himself as such a stand-out in the organization, that he’s asked to take on a vice president role in the company. Joe will be paid a salary of $150,000.00 per year, with a bonus potential of 200% of his salary, depending on company performance. In his first year, Joe earns a 100% bonus, but is let go because of budget cutbacks in the organization.

Guess what: Joe is now rich. That’s right, according to the tax code, Joe is in the top 5% of income earners, and we’re going to tax him to level the playing field. Joe will probably pay well over $100,000.00 in taxes. Joe was finally getting to a point in life when he unloaded the burden of credit card debt that straps so many Americans, and he could have established a base of savings that would have begun to accrue interest so that interest was finally working for him. Joe could have used that savings towards starting his own restaurant, which would have employed more people and brought more diversity of restaurants to the community.

Joe’s hard work could have finally made him just barely self-sustaining and finally put him in the black, but because he’s now “rich”, he’s going to have to give a substantial amount of his earnings to Uncle Sam. So much for leveling the playing field. Now that he was finally getting to a point where he could start caching up to the truly wealthy, his tax burden is making it more difficult for him. We’re leveling the playing field by keeping Joe in relative poverty.

Meanwhile, Warren Buffet and Bill Gates will pay roughly $45,000.00 per $300,000.00 of income because their incomes come predominately in the form of dividends, interest, and long-term capital gains.

That’s right: the “income gap” between Average Joe and the Warren Buffets (net of tax) of the world is actually widening. The wealth gap is widening at an even faster pace because of the power of compounding interest. And, to make matters worse, people like Average Joe have an even more difficult time attaining the level of wealth of Buffet and Gates because the government classifies them as “rich” the second they actually are in a position to make their lives better and earn their way out of relative poverty.

By taxing the “rich”, so long as we classify rich as those who earn a lot of W-2 or 1099 income (for those not familiar with the tax system, these are “earned income” or wages as opposed to “unearned income” such as interest, dividends, and capital gains), we actually ensure that we get less rich people in the future. Those with wealth continue to have wealth, and those who aspire to become wealthy by working hard will be kept down by the tax system.

In the long term, less people will work towards the American Dream, because we will have taxed away the opportunity for those who would only be moderately successful in comparison to the few notables such as Henry Ford, Sam Walton, Bill Gates, Warren Buffet, and those whose work commands compensation on the order of magnitude the likes of which most Americans will likely never achieve. So, not only will we have made it more difficult to become wealthy, we will, at the margins, reduce the number of people who put in the necessary work to become wealthy, and that only reduces our production as a whole.

Whatever you tax, you get less of. If you tax high income, you’ll get less high income, and that will keep the wealthy wealthy, and the poor poor. Do we really want to level the playing field by forcing poverty on future generations?

The process of critical thinking is far too easily overlooked among the people of the United States.  It is especially crucial to use critical thinking in times like this when the freedom for which our country stands for is being jeopardized. It is our responsibility as citizens to be concerned with the decisions which are being made by our politicians and to use cognitive skills to assess the actions.  Lack of critical thinking among our leaders and the people of America is becoming increasingly prominent and must be addressed.

To make things simple, I am going to focus on the recently passed $757 billion “economic stimulus package.”  The name of the bill sounds very promising, but it does not exactly portray what it really is.  The term for describing this is called ‘Euphemism,’ which takes place when the substitution of a desirable term is made for a less desirable or offensive one, a very common habit among politicians (Thought and Knowledge, pg. 112).  Although the bill is two parts spending, it is not called the “spending package,” because of course, that does not sound very appealing; “economic stimulus package” gives the illusion that the package will save the economy (key word being “illusion”).  The process of thinking about even the name of the package and how there may be some deception in it is a part of critical thinking.

Critical thinking is going beyond the surface in order to solve problems, such as those having to do with our failing economy.  By using skills and strategies, critical thinking helps us to make desirable outcomes more likely.  The intentions of the economic recovery package are, according to President Obama, “particularly aimed towards provid[ing] jobs to reduce unemployment in order stimulate the economy to help us get out of the current ‘crisis.’”  Unfortunately, I find it hard to believe that it was possible for critical thinking to really take place while making decisions on this nearly trillion dollar bill.

The stimulus package was constructed in just over four weeks, which is an extraordinary pace for Congress considering major bills can sometimes take years to become law.  In addition, the bill itself is over 1,000 pages, which the House of Representatives was given less than 24 hours to read and comprehend before being rushed into placing a vote.  Considering the situation, I can confidently say that I do not believe one Congressman or Congresswoman really read nor understood every provision in the bill.  The lack of time put into creating the bill and the extreme haste of passing the bill shows a dire lack of reasoning in order to obtain well-thought-out conclusions.  Reasoning and critical thinking are important in every aspect of life, but critical thinking among our leaders carries the utmost importance because their actions have the power to affect each and every American life.

One of the most defining aspects of critical thinking is the willingness to change conclusions when sound evidence warrants a change.  I am disappointed in President Obama’s ability to do this.  When a final passage of the stimulus bill was still awaiting approval by the Senate, Obama stated clearly in a speech that he did not want to hear the reasons as to why some people felt that the best option was to actually do nothing at all.  This lack of consideration shows that Obama is closed-minded to alternate options, a hazardous trait for a leader to possess.

While working to receive approval for the stimulus package, Obama came off more as a dictator or preacher than a President.  He was exposing obvious partisanship, and had little to no sympathy for any concern relating to the problems in the plan.  Mr. Obama made it clear that his plan was to convince the members of the Congress and the American people that the stimulus package is absolutely needed in order to survive from the “crisis” (a term terribly overused as a tactic for creating fear).  Instead of listening to Obama’s convincing words and believing them right off the bat, the American people can learn to detect deliberate pressure by understanding how to recognize propaganda through clear thinking.  It is absolutely essential that the American people do not fall prey to information that is blown out of proportion by realizing deliberate deception, analyzing unstated assumptions in arguments, and considering the credibility of an information source (Thought and Knowledge, pg. 8).  By doing this, people can equip themselves with the tools needed to think a problem or decision through in the best way possible in order to have the best chance in reaching the most desirable outcome.

While many politicians are outraged by the lack of thought put into such a huge bill and the consequences that may come out of it, others believe it is absolutely essential to the survival of our economy.  For instance, in an article from Wall Street Journal, Martin O’Malley, the governor of Maryland, made it clear that the Democrats are committed “to pulling our national economy out of the ditch that George Bush ran it into.”  He went on to state that “If some of the fringe governors don’t want to help us do that, they need to step aside and not stand in the way.”  I found this statement to be concerning because the whole point of a democracy is to make sure one side does not have too much power over the other.  The “fringe governors” are actually very important in evening the waters and providing a different perspective and should therefore absolutely not be pushed aside.

No one can say for sure what will be best for the well-being of the United States in the future.  This is because there can never be guarantees about the future, even for the best of thinkers.  The greatest power we do have is substantially increasing the likelihood of a desirable outcome through critical thinking; this is the best hope for the future anyone can offer (Thought and Knowledge, pg. 7).  We think critically about different situations each and every day, and in order to improve the state our country and salvage our true freedom, politicians and citizens alike should begin to asses different issues that arise and think critically about the best way to solve the problems that are placed before us, particularly during this time of turmoil.

Sources:
http://online.wsj.com/article/SB123453885966183349.html
http://online.wsj.com/article/SB123525505653141087.html
Thought & Knowledge, an Introduction to Critical Thinking; Diane F. Halpern

US House approves stimulus plan

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Just like that, nearly $800 billion is taken away from the American people and redistributed by a small group of people that know nothing more than you or me; they probably know a good deal less than you or me.  Much to the celebration of most media outlets and seemingly most Americans, the United States took another giant leap in the direction of socialism with the passing of this bill.  $800 billion would be enough to give each working American nearly $5,500.  Those of you that gain $5,500 from this action please notify me.  $800 billion to stimulate the growth or saving of four million jobs equates to $200,000 per job.  Anyone willing to offer me $200,000 can have my job immediately.  All arrogance aside, it will be a good investment because I am paid more than the men and women they will hire to lay pavement on new interstates or sod on new Frisbee fields.

As if this $800 billion stimulus plan after a $700 billion bailout plan is not enough, the U.S. government announced this week that the first $1.5 trillion they want to spend is not enough.  No, they want to double it.

US unveils new $1.5 trillion plan

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$1.5 trillion more dollars.  $1,500,000,000,000.  Thirteen figures.  This IN ADDITON TO the $1.5 trillion they have already allotted for a grand total of $3 trillion.  This doesn’t even include the annual budget of around $3 trillion.  With this bailout/stimulus/whatever else money that they intend to spend, the government could issue each working American over $20,500.  For the 4 million jobs that have been lost they could simply pay each of those people $750,000 each, or $150,000 per year for the next five years!  The money to be allocated in 2009, bailouts, stimuli, and the budget will top $6 trillion.  To keep beating a dead horse, that means the government could give out over $41,000 per working person!  The median income for American workers is well below $30,000!

Unfortunately this money is not simply given back to the American people; it is spent in completely wasteful ways.  Even worse, we must reverse the figures to see what is really going on.  This money does not appear out of thin air, Americans pay for this.  You pay for this.  I pay for this.  You may say, “My taxes haven’t gone up, so I’m not paying for it.”  Your taxes will go up, rest assured.  If they don’t go up then you will be taxed via inflation.  You will pay for this.  “Tax the rich,” you say.  The entirety of the United States only creates a GDP (essentially income) of $13 trillion per year.  $6 trillion of that will be spent on our lovely government.  Obama says he wants to tax everyone that makes more than about $200,000 and give everyone else a tax break.  Less than 1% of Americans make more than $200,000 per year.  For these 1% to pay for this $6 trillion, each working rich person making over $200,000 per year would have to average paying about $2 million in taxes per year.  That does not add up.  Even if the top 1% of American income earners gave their entire incomes to taxes in 2009 we would still fall well short!  We are all paying for this, not just the wealthy people of America.

Furthermore, this spending does not even include state and municipal spending, which has shot through the roof.  California has said that it may have to issue IOUs on tax refunds to its citizens because they have no more money and nobody is willing to lend them anymore money.  Many states are billions of dollars in debt, including my home state of Arizona.  Arizona recently spent $1.2 billion on a light rail that goes in a straight line and stops at red lights.  A 25 minute drive will now take you 50 minutes on the light rail, go ride it!  Furthermore, Arizona has no way of collecting payment from riders.  It is essentially an honor system.  There may be no such thing as a free lunch, but I know that most people won’t turn down a free ride.

We are facing a serious foe.  I am not necessarily a republican, but I am more republican than democrat and not one republican in the house voted for this stimulus plan and presumably not one will vote for the extra $1.5 trillion for the Fed to disperse.  Democrat has come to mean socialist and they are making our nation into a socialist one.  Freedom and capitalism are dying before our eyes.  It is time to debate, it is time to educate, and it is time to encourage our friends, family, and neighbors to open their eyes to what is happening in our world.  We cannot stand by and watch as we are stripped of our freedom and thrown into serfdom (thank you Hayek).