I'm no economist, but even I can see that some of the economic theories and plans getting thrown around by the various pundits and administration advisers are just full of crap.
The biggest fact that is presented in any report on the economy is that two thirds of the economy, at least the US economy, is driven by consumer spending. That's fine, and not too much of a surprise, since there are a lot of consumers, and everyone needs to eat. But, given that one statistic, the rest of the policies just make no sense.
For example, the push to shift the tax burden from the current income tax to more of a consumption tax that rewards savings and investment. Huh? If 65%+ of the economy is driven by people spending stuff, a shift to consumption taxation is stupid, since all it'll do is slow down consumption. If you want the economy larger, money needs to flow faster, and that just won't happen if there's less money flowing. Duh.
Then there's the dismantling of taxes paid by folks with vast amounts of cash, including the inheritance and dividend taxes, not to mention lowering of the income taxes in the top bracket. The point of these taxes is, in part, to prevent the buildup of capital in non-circulating places, which is generally what wealth is--capital that's not circulating. Not universally true, certainly, but commonly true, and in many cases much of the remaining wealth is used in a way to siphon money out of the economy. (In the form of rents, leases, and interest charged on loaned money)
And lets not mention the policies that encourage moving the production jobs--those jobs that actually make something, or do something useful--out of the US economy. Tell me again--how's the economy, the one driven by consumer spending, supposed to grow if there are fewer consumers with cash?
Methinks that its been so long since the folks in power have actually done anything useful that they've forgotten how things work. Or perhaps everyone's just working on moving back to a more feudal system, which works just fine (for some versions of fine) regardless of how poorly off most of the population is.
Posted by Dan at March 2, 2003 10:29 AM | TrackBack (0)