BlackTerrel
06-03-2010, 06:21 PM
I wrote the following to my cousin who was arguing that Obama has not increased taxes and has actually given more money to the people by way of bailouts and tax credits. My cousin serves in the navy and is a bright guy, but not so much when it comes to economics or quantitative problems.
I realize this may be a simplistic explanation to many here who are well versed in economics. But I think this is a good breakdown for the uninitiated and thought I would share.
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When a company spends money, the use money that they have earned due to production. So if Apple spend a billion dollars on research, they are using the money they earned selling a million iPads.
The government doesn’t produce anything. So when they spend money it comes from the people. From you, from me, and from Apple. That’s ok. I’m not a strict libertarian. I believe in some government and am willing to be taxed to provide national defense, police, fire departments, roads, and other essential needs for a civilized society. But how much money should that cost and how much are we willing to give them?
You are right that Obama did not increase taxes. But there are two ways the government “makes money” and both of those ways are by taking money from the people. The first way is taxes, the second way is by printing money. What Obama is doing (and he is just following Bush) is printing lots and lots of money. That doesn’t feel like a tax immediately, because he is not physically taking the money from your bank account – but it has the exact same effect nonetheless. Because the money in your bank account is now worth less than it was 6 months ago. It is an indirect tax and in many ways much more egregious than an actual tax because it is hidden – and most people don’t know about it. I’d rather a guy come in and say “hey I want 70% of your money” cause then at least he is being honest about it. If people knew how much they were being taxed they'd be a lot more pissed off about it. Which is why they do it like this.
So we are actually being taxed at an extraordinary amount. No one knows how high that is yet because the inflationary effects are not yet being felt or measured. But it is much higher than the 20% you mentioned. It is far more likely that we are being taxed at 70%, 80%, or even 90%. And the effects of inflation mean you are not just being taxed that on your income but you are also being taxed on the money you have just sitting in your bank account or sitting on your dresser.
In short we are being screwed. And in many ways we are fucked. What is the solution? I don’t know – whatever it is it is going to be really really fucking painful and it is going to get worse before it gets better. There is only one politician who really gets it on this matter and that is Ron Paul out of Texas. But he is one of many. His son Rand out of Kentucky will hopefully soon be joining him and he seems to get it as well. That is still only two of many – but it’s a start.
Anyway enough politics bullshit. Talk soon and stay safe,
T
I realize this may be a simplistic explanation to many here who are well versed in economics. But I think this is a good breakdown for the uninitiated and thought I would share.
--------------------------------------------------------
When a company spends money, the use money that they have earned due to production. So if Apple spend a billion dollars on research, they are using the money they earned selling a million iPads.
The government doesn’t produce anything. So when they spend money it comes from the people. From you, from me, and from Apple. That’s ok. I’m not a strict libertarian. I believe in some government and am willing to be taxed to provide national defense, police, fire departments, roads, and other essential needs for a civilized society. But how much money should that cost and how much are we willing to give them?
You are right that Obama did not increase taxes. But there are two ways the government “makes money” and both of those ways are by taking money from the people. The first way is taxes, the second way is by printing money. What Obama is doing (and he is just following Bush) is printing lots and lots of money. That doesn’t feel like a tax immediately, because he is not physically taking the money from your bank account – but it has the exact same effect nonetheless. Because the money in your bank account is now worth less than it was 6 months ago. It is an indirect tax and in many ways much more egregious than an actual tax because it is hidden – and most people don’t know about it. I’d rather a guy come in and say “hey I want 70% of your money” cause then at least he is being honest about it. If people knew how much they were being taxed they'd be a lot more pissed off about it. Which is why they do it like this.
So we are actually being taxed at an extraordinary amount. No one knows how high that is yet because the inflationary effects are not yet being felt or measured. But it is much higher than the 20% you mentioned. It is far more likely that we are being taxed at 70%, 80%, or even 90%. And the effects of inflation mean you are not just being taxed that on your income but you are also being taxed on the money you have just sitting in your bank account or sitting on your dresser.
In short we are being screwed. And in many ways we are fucked. What is the solution? I don’t know – whatever it is it is going to be really really fucking painful and it is going to get worse before it gets better. There is only one politician who really gets it on this matter and that is Ron Paul out of Texas. But he is one of many. His son Rand out of Kentucky will hopefully soon be joining him and he seems to get it as well. That is still only two of many – but it’s a start.
Anyway enough politics bullshit. Talk soon and stay safe,
T