It's Time to Gut, Not Cut, the Federal Government

I think people like Ron Paul and others have proposed over and over- the government needs to be returned to it's original functions described in the constitution.

It needs to get out of the business of taking care of people- as PS has suggested- return this function back to the states- back to local government that is closer to the people.

Snatching more money out of the hands of the American taxpayer will not work- the economy is at a knife's edge now- removing more of the taxpayers money will have direct negative effects on the economy. Taxing the richest 5% will result in more lost jobs- many of those jobs will be middle class jobs.

Assuming you have a real job- you do not need the federal government to be anywhere near the size it is now- unless you work for the government- in which case you should get a private sector job that creates actual wealth.

The government does not create wealth- it is the world's largest consumer of wealth- a destroyer of wealth. The old economics theorem has the following proofs- despite what Obama says.....

That which you want more of - you tax less. That which you want less of- you tax more. Do you want more rich people- or more poor people? Anytime the government taxes somthing- it provides less incentive to save, spend and invest.

If this were not true we could just tax ourselves into prosperity- set the tax rate at 90% for everyone and expect that this would not have a negative impact on ecomonic activity.

It lowers the profit one can expect- and therefore lowers the motivation and incentive for businesses & individual investors resulting in less spending- less investment and less economic activity.

Have we all completely lost our minds?

More Taxes result in less investment- and less economic activity overall- is that what we want? Therefore the only solution to our massive government problem is to cut back on the only thing we have too much of right now- and that is government!

If we cut it back enough- there will be no need to raise taxes- we can start to pay back the debt with the increased revenue that a better economy will bring us.

That's the truth.

Yes yoyo, it would be better to pay off the debt now and take the steps necessary to allow that to happen. The problem we have at the moment is that even with a dedicated tax for paying off the existing debt, no headway will be made even if that tax is exactly what the current income tax levy is because our annual federal deficit is greater than the amount of money raised by taxing the income of the citizens of the States.

There is no hope of paying down the obscene federal debt while the federal government keeps all of the power it has chosen for itself. The self labeled "mandatory" spending items themselves are in excess of the annual revenues from all taxes at the moment and these programs are on a mandatory baseline increase each and every year that is in excess of both the annual growth of GDP and the annual growth in tax revenues collected by the federal government. There is no balancing this budget as long as the federal government has declared itself to be the central collection and distribution hub of the union's charitable activities. That's what happens when you bottom your social experiments on a Ponzi foundation. Ponzi schemes fail because no matter how high the promised return, eventually you will exceed the number of new investors that you can enroll that are necessary to keep the Ponzi going.

My grandparents and their employers contributed around 6% in total on a maximum of around $40K in inflation adjusted earnings. You and I and our employers are paying 15.3% on the first $106K and 3% on every dollar beyond that. If your grandparents were self employed, they were only paying 3% on the first $40K. If you are self employed today you are paying the entire 15.3% on the first $106K and 3% on every dollar after that. That's over a 500% increase in tax rate on 250% more income for the self employed small business person today than when we had a strong middle class - and we wonder why we no longer have a vibrant middle class? It's as plain as the nose on Jimmy Durante's face to me what happened to the middle class - they've been taxed into virtual extinction. Even that erstwhile blue collar laborer working for someone else has seen their tax burden skyrocket to pay for all these "mandatory" social experiments even though their taxation has only increased by a factor of 6.375 - not 6.375% more, 6.375 times more. They are only having their labor taxed at a 255% higher rate on 250% more income - lucky them, right?

The government does not create wealth- it is the world's largest consumer of wealth- a destroyer of wealth.

Ever take a look at house values in Washington metro area????

Housing prices* have declined in every metro area in the country --- except Washington, DC - which went up. In fact - over the past decade, prices in DC have nearly doubled.

So - Washington does create wealth --- in Washington (I'm guessing it devours wealth for the rest of us).

Source:
* Wall Stree Journal reprint of Case-Shiller index, May 31, 2011.

bailey bud wrote:

The government does not create wealth- it is the world's largest consumer of wealth- a destroyer of wealth.

Ever take a look at house values in Washington metro area????

Housing prices have declined in every metro area in the country --- except Washington, DC - which went up. In fact - over the past decade, prices in DC have nearly doubled.

So - Washington does create wealth --- in Washington (I'm guessing it devours wealth for the rest of us).

Government only gets it's money by one of two ways. Every dollar it spends must first be removed from the private sector- where it is used the most efficiently to create wealth- or second- it borrows that money out of thin air- which dilutes the value of all the other dollars. In addition - this borrowed dollar must be paid back with interest. This is the most in-efficient use of a dollar known to man.

Those houses in DC- they come at the expense of the rest of us- they are better off while the rest of us wonder why we are having problems making ends meet.

The reason why many businesses are not creating jobs is directly related to a government that is anti-business. If a business thought it could make a decent profit- it would take that risk and invest.

They do not see an environment where the risk is worth taking right now.

posteryoyo wrote:

BearMtnHIB wrote: She dosn't care PS- she would rather see government grow until it's completely destroys this country.

She dosn't care what it's doing to the middle class- that our government is so big now that the country can not prosper anymore.

Just keep raising taxes- that's the answer.

Does someone have a proposal of how to pay off the hundreds of thousands of dollars of debt each working American owes on behalf of his or her country without asking for more money from the people. SS or not whatever, isn't raising taxes part of the solution eventually. I don't want them to go up and I will do my best to make sure the rest of you pay more than me, but aren't they going up on everyone pretty soon?

Even if you get rid of a bunch of programs, won't most of them be left, even if you tax a bunch of rich Americans, won't you still have the tax the crap out of everyone else more and more anyway. If you are fiscally conservative, isn't it better to pay off our debt now vs. later if interest rates on borrowing are high (or consequences like wars).

I don't want taxes to go up now for selfish reasons, esp income taxes, thinking if I can make more now while taxes are low, I will be able to pawn more off on future generations (I paid to educate them and they did not even say thinks once, so). I am curious about those that are arguing they want the best for the country in stead of themselves, why they want to put off paying off our national debt by not paying taxes. Are you waiting on inflation to wipe it away or what is the patriotic strategy? Would the typical self proclaimed conservative be ok with an across the board increase in taxes if it ALL went to paying down debt or alternatively how does one pay it? Would the typical self proclaimed liberal be ok with an across the board reduction in services funding to fund a pay down of debt? Both with the goal of giving us a few more years of debating how to get our neighbor's wealth without trading for it (which is the goal right?)

I can't think of one way to pay off the debt without it eventually reaching the pocketbooks of American taxpayers. Add import duties? Consumers will pay. Increase corporate taxes? They will be passed onto consumers. Increase taxes on the 1%?
They will find better ways to hide their money, or stash it in low risk/low reward goverment bonds, taking money away from small businesses and consumers.

True- any tax will hurt middle class America.

And if more Government spending actually resulted in a better economy- more jobs and more prosperity, then the last 4 years should have resulted in the biggest economic boom the USA has ever seen- because the government has spent more in the last 4 years than at any time in history!

The truth is - the opposite. The more it spends- the worse off we all are.