Wednesday, April 3, 2013

Economics For Dummies and Socialists

This Blogger is convinced that President Obama, all his Socialist pals in government and his PEEP's really need to buy and read the book Economics For Dummies.   It is not that I am plugging any one book; but clearly anything more complicated is probably beyond their ability to comprehend and attention span so we have to start with the basics.   Let me see if I can help with some basic Economics.

1.  Higher taxes result in less government tax revenues, not more, because job creators immediately change their behaviors to avoid those taxes.   As Ronald Reagan always said, they vote with their feet.   This is the reason Socialist blue states have lost jobs and companies for years to more business friendly Red States.  It is also the reason companies have moved many jobs overseas to lower tax countries.  Well dah!

2.  While some regulations are needed to create the rules of the road, burdensome regulations kill jobs and some times whole industries in the US.   It is the reason that many industries like textiles, steel, furniture production, manufacture of electronics and many others no longer exist in the US. 

3.   Lack of competition, as in our public schools, or any business usually leads to mediocrity as there is no real incentive to improve since for the most part customers are locked in. 

4.  Socialist Command and Control Economies always implode because they are predicated on Crony Capitalism, with government attempting to pick winners and losers, instead of free market decision making that rewards innovation. 

5.  Private Sector unions ultimately kill jobs as companies look for better, faster, cheaper ways of doing business anywhere in the world to increase profits.  Public Sector unions bankrupt countries in a vicious circle of corruption.  Hello!!

6.  Bail outs of industries, like the auto industry in particular, distorts markets propping up weak companies at the expense of stronger companies and the consumer. 

7.   Welfare lead to more Welfare and people on the dole as the Takers in society have no incentive to work to better their condition. 

8.  Supply and demand determine price in a free market.  Government intervention, taxes and regulations, however, distort the free market generally driving up prices regardless of demand.  The mortgage interest deduction is a classic example as people factor in the after tax cost of debt causing them to pay more for a home than would otherwise be the case.   The same is true for the cost of carbon and nuclear based energy and many other products and services that are higher than necessary because of government policy.

9. Government grows at the expense of the private sector.  The bigger the government, the smaller the private sector, which results in less tax revenues to government, since though some government employees pay taxes, government pays no taxes.  That one is pretty obvious.   Hence the bigger the government, the greater the National Debt.   We certainly see this one in practice all over the world. 

These 9 basic tenets are about all anyone needs to know to understand  Economics.  It is pretty obvious that Socialist President Obama and his pals in government, both in Washington and at the state level, never took and passed Economics 101, which is the reason they practice Class Warfare and continue to call for bigger government, higher taxes and more regulations.  The end result is little or no economic growth or real job creation, a lower standard of living for the American people, more people on the dole and more and more government debt.   It is what it is just basic Economics For Dummies, Socialists and their PEEP's. 

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