Posted by: James Atticus Bowden | October 22, 2009

Choose Which America You Want To Live In

Making the pie smaller or bigger with taxesChoose between the two Americas.  See which one is better.  President Obama proposes an American of hope and change based on income redistribution.  See what happens to the income of Americans under his socialist economics. Even if you support Liberal class warfare, look what happens to the poor and middle classes.  I named my vision of America, which is shared by millions of Conservatives and Libertarians, our Munificent Destiny.  See how capital growth provides more dignity, justice and hope for all individuals.

The starting stats came from a Heritage Organization posting on the web.  The multipliers are those I recall from graduate school economics (JFK School of Government, Harvard University, CL ‘81).  The unemployment factors are extrapolated from the latest Labor Department Bureau of Statistics on the web. 

Here is how to see the two Americas.

Say the total income of the U.S. in one year = $100.00.  (Note that income is much different than wealth).   The distribution of income has the same starting point for the Blue Socialism and Red Free Markets.  It’s very skewed.  The rich are getting much more income than the poor. 

So, going down the blue side, BHO and the Dems raise taxes.  Less than half of American workers actually pay income taxes.  Lower income workers pay social security, healthcare, and sales taxes.  Many of them get the money back plus a bonus, but it isn’t called ‘welfare’, in unearned tax ‘credits.’

Every dollar that goes into government produces less than 28 cents in services.  Estimate 25% in transfer payments, government jobs and contracts.

Then, adjust for the loss of jobs.  Every $150m in taxes kills 5,000 jobs.  Those workers drop out of all quintiles and lower the sum of the wages of the lowest two quintiles.  The result is that the bottom two quintiles don’t get ahead.  Some individuals will make more money from their government job or contract.  But, a greater number of individuals will lose their jobs and move down the income ladder.

 Going the down the red side, we as a Nation create capital.  It’s what Milton Friedman described as the engine of our national economy.  Capital growth increased the per capita income ninetyfold (90 times larger per person) from 1870 to 1960. 

If Constitutional Republicans swept Establishment Republicans and Democrats out of office in 2010 and 2012 in large enough numbers, then taxes could be cut as much as BHO wants to raise them. 

Three quintiles get an immediate increase in income.  This fuels a 10% increase in the economy.  (If nothing is done – including no new taxes – the economy should grow by 3% or so).  The 10% increase was computed from the original income distribution – pre-taxes.

The growth of capital in the economy grows jobs.

Compare and contrast the results across the bottom row.  Note that the total U.S. income falls to $84 under BHO for the same population that has $124 with capital growth.  Which America do you choose?

I described the Munificent Destiny in http://www.americancivilization.net/articles/2005/Americas_Munificent_Destiny.pdf

Likewise, I describe the cumulative effect of small increases in the overall rate of taxes  http://www.americancivilization.net/articles/2006/Harvard_Tells_the_Truth_on_Taxes.htm

I suggest how to follow the U.S. Constitution and move the federal failures of social security, healthcare and welfare to the states – in the example of healthcare for Virginia -http://www.americancivilization.net/articles/Virginia06/Putting_Taxes_To_Work_Commonwealth_Trust_Accounts.pdf

Finally, when I was a politician for 3 weeks in 2007, my watchwords were ‘Dignity, Justice, and Hope.’  There is a way to make these more real for many, more individuals.  Class warfare and socialism isn’t the way. Growing capital is the path to a Munificent Destiny.   A destiny as important for this century as Magnificent Destiny was for 19th Century America.

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Responses

  1. Good expoition. I would expect nothing less from a Harvard, JFK School of Government Graduate.

    How anyone can believe that raising taxes in a recesiion will bring prosperity is engaged in several actions:

    Lying. Taxes have never brought prosperity to anyone except for government elites and their Apparatchik cronies.

    Mis-direction. Defy common sense though sophistry in order to keep our eye off of the ball.

    Demagouguery and Class Warfare Rhetoric. Self-explanatory

  2. Hey! No fair! You’re using logic and reasoning!

    Actually, sadly, no one will listen. EMOTION sells. Reasoning rationalizes the sale.

    As a former financial salesman (EPIC FAIL), my boss would show people that, on THIS hand, they stay indebted or at best break even.
    On the other hand, follow the plan, DOUBLE THE MONEY.

    They would consistently say, “wellllll, I don’t know…..come back next week…..We’ll call you.”

    He failed because, while he was passionate, he couldn’t engage THEIR emotions.

    Logic and reasoning are not the tools to convince people, especially people that are not critical thinkers. You know….Americans.

  3. Nice job! Of course, you are forgetting that the government creates jobs. 😀


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