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| A Rational
Advocate REASONED VIEWS ON ISSUES OF THE DAY |
"The most formidable weapon against errors of any kind is
reason" Thomas Paine - 1776 |
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featuring MILTON FRIEDMAN |
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 The Wealth of Nations No book has done more to instruct, enlighten, and inform conservatives about economics than Adam Smith's classic
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The President of General Electric, Jeffrey Immelt recently said
the following in a letter to stockholders. This should scare the hell out
of freedom loving Americans everywhere. But will it?
"We are in a recession and, at
times like these, it is difficult to predict how bad and for how long. We
are running GE to 'weather the cycle'. However, I believe we are going
through more than a cycle. The global economy, and capitalism, will be
reset in several important ways. The interaction between government and
business will change forever. In a reset economy, the government will be a
regulator; and also an industry policy champion, a financier, and a key
partner."
Corporate America appears to be
on its way to becoming hung on the government narcotics being offered to
them. Those duped by these words will rue the day they passively accepted
them as a path to Utopia. Think about it, Public-Corporate partnerships
cannot be partnerships because the government by its very nature will be
in control. The shareholders interest will become subservient to the
government. Socialism will take over. Goodbye American freedom!
What kind of gobbledygook
is this? How can the Fed“cut interest rates” by a mere pronouncement.
Sounds like King Canute commanding the tide to stop coming
in...... play video Friedman Foundation On Education
The Economic Case for School Choice: Why the Public School Model Doesn't Work MILTON
FRIEDMAN HONORED AT WHITE HOUSE
 President George W. Bush
honors soon to be 90 years old Milton Friedman for his Lifetime
Achievements What Every American
Wants
By Milton Friedman I have long said, "I
never met a tax cut I didn't like" -- though I would go on to say that I
like some better than others. The reason for my flat unhedged statement is
neither the Keynesian attribution of an economic stimulus to a tax cut,
which I believe is generally wrong, nor the supply-side attribution of
favorable incentive effects to a tax cut, which I believe is generally
correct. It is, rather, the effect of tax cuts on government
spending......
By Arthur B. Laffer
The Laffer Curve illustrates the basic idea that
changes in tax rates have two effects on tax revenues:
the arithmetic effect and the economic
effect. The arithmetic effect is simply that if tax
rates are lowered, tax revenues (per dollar of tax
base) will be lowered by the amount of the
decrease in the rate. The reverse is true for an
increase in tax rates. The economic effect, however,
recognizes the positive impact that lower tax
rates have on work, output, and employment—
and thereby the tax base—by providing incentives
to increase these activities. Raising tax rates has
the opposite economic effect by penalizing participation
in the taxed activities. The arithmetic
effect always works in the opposite direction from
the economic effect. Therefore, when the economic
and the arithmetic effects of tax-rate
changes are combined, the consequences of the
change in tax rates on total tax revenues are no
longer quite so obvious. .......
By Thomas Sowell (townhall.com) Anyone who thinks that
business is gung ho for the free market has just not been paying attention
to business. Adam Smith knew better, back in the 18th century. Although he
was the patron saint of capitalism, Smith was no fan of capitalists. Any
policy advocated bybusinessmen, he said, "ought never to be adopted till
after having been long and carefully examined, not only with the most
scrupulous, but with the most suspicious attention."
Bruce Bartlett (TownHall.com) Recently, I discussed new
IRS data showing that the share of total income going to the richest 400
individuals has increased. However, income is an imprecise measure of
well-being. That is better measured by wealth. A new study by the Federal
Reserve sheds important light on the distribution of wealth in the United
States.....
| John Maynard Keynes once said: "Nor shall the argument seem strange, that taxation would be so high
as to defeat its object and that given sufficient time to gather the
fruits, a reduction of taxation will run a better chance than an increase
of balancing the budget. To take the opposite view today is to resemble a
manufacturer who, running at a loss, decides to raise his price. And when
his declining sales increase the loss, wrapping himself in the rectitude
of plain arithmetic, decides that prudence requires him to raise the price
still more. And who, when at last his account is balanced when naught on
both sides is still found righteously declares that it would have been the
act of a gamble to reduce the price when you were already making a loss."
click on titles to
read complete essay
Posing the question -
"what is the best way to increase tax revenue?" - there are some that
would say that the simple answer is to increase tax rates especially on
those earning higher incomes. Their reasoning being that this would
obviously increase tax revenue since it would direct more of the taxpayers
earnings to the government. In a world where the earnings were a constant
then this might be true - but - earnings do not stay constant and are
effected by what goes on in the country and world that affects the
economy. The fact is that increasing the tax rate could decrease tax
revenue if earnings taken out of the private sector caused business
activity to decline that then diminished the earnings of business and
individuals. There are those who
believe that to stimulate the economy it doesn’t matter whether it is the
government or the people who spend for goods and services as long as the
spending occurs. However, it does matter if one desires to stimulate the
economy in a way that at least maintains the nation’s standard of living.
Reason provides this conclusion... Whenever our economy
experiences a recession calls are made for fiscal action by the Executive
and Legislative branches to stimulate it. Unfortunately the proposals that
are proposed by those of different political persuasions fall far short of
what is truly required for a variety of reasons. Narrowed, the reasons
fall into two categories..... By John Linder (Member of Congress) In Robert Novak’s column
on Thursday, May 31st, he mentioned a revolutionary new tax proposal
called the FairTax. He cited the potential rewards of the FairTax as
“immense”and described the "impressive starting support in
Congress.”.....
By Anonymous Let's put tax cuts in terms everyone can understand. Suppose that
every day, ten men go out for dinner. The bill for all ten comes to $100.
They decide to pay their bill the way we they pay their respective taxes
and do so in the following manner. The first four men-the poorest-pay nothing; The fifth pays $1: The
sixth pays $3; The seventh $7; The eighth $12; The ninth $18. The tenth
man-the richest-pays $59. That's what they decided to do. The ten men ate dinner in the
restaurant every day and seemed quite happy with the arrangement-until one
day, the owner threw them a curve. "Since you are all such good
customers," he said, "I'm going to reduce the cost of your daily meal by
$20." So now dinner for the ten only cost $80. The group still wanted to
pay their bill the way we pay our taxes..(read more).. "Government
spending and economic growth are actually the primary determinants of
whether there will be a surplus or a deficit. If federal spending had
risen no faster than the rate of inflation, there would have been
surpluses in 28 of the 32 fiscal years since 1970." W. James Antle
III A civil
engineer, a chemist and an economist are traveling in the countryside.
Weary, they stop at a small country inn. "I only have two rooms, so one of
you will have to sleep in the barn," the innkeeper says. The civil
engineer volunteers to sleep in the barn, goes outside, and the others go
to bed.
In a short time they're awakened by a knock. It's the engineer, who says, "There's a cow in that barn. I'm a Hindu, and it would offend my beliefs to sleep next to a sacred animal." The chemist says that, OK, he'll sleep in the barn. The others go back to bed. Soon they are again awakened by another knock. It's the chemist who says, "There's a pig in that barn. I'm Jewish, and cannot sleep next to an unclean animal." So the economist is sent to the barn. It's getting late, the others are very tired and soon fall asleep. Again they are awakened shortly by an even louder knocking. They open the door and are surprised by what they see: It's the cow and the pig! Topic content, other
than that from linked websites, may not be published, broadcast, rewritten
or redistributed without the permission of A Rational Advocate
The Way the World Works Jude Wanniski and Robert Novak |
