Tags: budget | tax | free-market | economy

President's 2015 Budget on Wrong Side of Economics

By
Monday, 10 Mar 2014 06:56 AM Current | Bio | Archive

Usually writers who are not economists start out an article on economics by first noting, "While I am not an economist . . ."

The truth is that a great many, if not most, professional economists know little to nothing about economics. Particularly those in academia like Robert Reich or newspapers like Paul Krugman.

Nearly anyone with a rudimentary background in financial affairs, basic behavioral psychology and experience putting his or her own money into investments is more qualified than a Nobel Prize winner or PhD of economics with none of these qualifications is.

I was thinking about this when reviewing some articles on President Obama's 2015 budget proposal. Well, it's not really a budget, but more like a campaign piece to rally the troops.

I printed the whole thing out, my secretary binding it, and promptly used it as a doorstop just like I have with Hillary's autobiography. Bill's too.

The budget consists of three parts: taxing, spending and borrowing.

In 2015, the president proposes that all three go up.

The budget and its impact on the economy are not at all complicated.

What the president proposes is to take a lot more money out of your hands and give it to the people who will vote for politicians that support the president taking more of your money to give it to them.

The government will need to borrow more money from the Federal Reserve and China. Interest on the debt goes up, thereby requiring more money to be borrowed by future budgets. The value of the dollar (its purchasing power) goes down. The stock market responds by going up to offset the loss of the dollar's value.

As a matter of economics, the government is stealing the value of your hard work and redistributing it to keep voters happy.

Who gets that money?

Part of these transfer payments go to the so-called poor, but most if it goes as transfers to the middle class.

Hence the need for the top 1 percent to pay for 50 percent of the new tax increases.

When money — capital — is in the hands of those earning it, then it gets allocated as each individual thinks best in their own self-interest. That is what is known as a free-market economy.

When the government decides on how to allocate capital, then that is called socialism.

The United States has a hybrid socialist-free market economy that is rapidly becoming more socialist and less free-market.

Capital put to work by those who actually busted their butt to get it or took the investment risk in investing it create something called productivity.

The national economy grows only when there is productivity.

When the government takes a dollar from a taxpayer and spends it, there is no productivity. The claim that there is a multiplier effect is a complete lie. Government spending does not work like nuclear fusion, where more comes out than goes in.

Taxation is nothing more than legalized robbery that funds the dominant problem with the American economy. That problem is a matter of just too much government.

A capitalist, free-market economy is on the right side of economics. The president's 2015 budget proposal is on the wrong side.

© 2017 Newsmax Finance. All rights reserved.

 
1Like our page
2Share
Kleinfeld
The truth is that a great many, if not most, professional economists know little to nothing about economics. Particularly those in academia like Robert Reich or newspapers like Paul Krugman.
budget,tax,free-market,economy
534
2014-56-10
Monday, 10 Mar 2014 06:56 AM
Newsmax Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved