Re: Obamanomics
You know better than that. A growing economy always brings in more tax revenue. Everytime money changes hands in the marketplace, the government gets a piece.
And as the money transacts through the economy, in each transaction if the gov't takes a cut, then over time the gov't ends up with it all. What becomes the political theater is in deciding who is allowed for political favor to by-pass the gov't cut process which in effect lowers the public cost and by market intervention, those market inputs enjoy favored status. I found it interesting in the hysteria leading up to the so-called fiscal cliff that it was said without gov't action that a gallon of milk would rise to $7. Yet milk from so-called organic or non-pasteurized sources are already at that price and have been because they don't enjoy the same gov't subsidy. This market intervention has given rise to a huge Washington lobby with economic consequences far beyond just milk. Ending said subsidy would level the floor so to speak and then let actual markets determine what is best or that maybe milk itself is overinflated in importance to society as a whole.
The other part of this equation is that said favors are enjoyed at a point in the economic chain that favor both business and gov't and not always the claims of people they are out to help. Much screaming here about the people taking food stamps but rarely do any of these screamers ever look beyond and see how Corp. America ultimately end up with the dollars from food stamps and that food stamps were about them in the first place. If there was no food stamp program, who would mop up the excess surplus which in truth acts as a price support? Behind the appearance of charity are blood sucking fangs and one would be wise to remember that.
As to a continuous growth economy, could this really be a fiction we've been sold and bought? Jeremy Rifkin, a senior lecturer with the Wharton School of Business gave a lecture called, "Empathic Civilization" in which he demonstrated a very thought provoking idea. That is, what if $147 per barrel of oil is an absolute economic ceiling for growth? He points out how this ceiling occurred but also that in the future we may well see it again. Richard Heinberg, author of "The Party's Over" among others has raised serious questions about future oil production going forward and when you actually look at the industry's own production numbers and prediction models going forward, both Heinberg and Rifkin are making a point that the growth economy as we know it will hit a immovable wall if it's not already. Others argue that the economic state we are in using current economic theory and based on current resource availability is about what we will have going forward. Heinberg uses rare earth magnets as an example and how China, major principle source of these, controls this market but as of now, rare earth magnets may well be a diminishing resource so what happens for example to the cost of electrical generators going forward? The cost of power? Do we see a day when we invade China like we've invade the Middle East and Africa for resource control? What if continued economic growth requires it? What then?
As much as I'd like to say they are full of
, I also have to concede that they do have a point. That being the case, using an economic model of growth to project tax policy may in fact be faulty and therefore the end results be wrong, bad and maybe even horrific. I might also add that neither Heinberg nor Rifkin are what I would call libertarian/free market types so this is not about using 2 people to feed a personal bias. I would suspect both men to be a bit contrarian to the whole libertarian/free market ideal at least in the sense that it's so badly asserted amongst political circles and even often by many of it's own. But that's another thread I guess.
And where does money itself come into this growth model? All money that comes into existence does so by the means of the creation of a debt. I refer you to the Federal Reserve publication, "Modern Money Mechanics" among many others to assert that as fact. Being that money can only come into existence by means of debt creation, even this ultimately has a ceiling as we saw in 2008' when the private part of society had reached it's debt limit and could no longer keep the debt machine growing which is what primed the economic growth pump. Even the gov't admitted it was stepping in as the borrower of last resort because had they not, money in the form of Federal Reserve Notes would in due course dry up from circulation thus fueling the fear of all fears and that is deflation. Why do you think every time we hit the debt ceiling there is a crisis to increase it and regardless of the political theater by both sides, they always do increase it?
I do think there is an argument that the United States is at it's limit, both in debt and resources and we may bump along for a few more decades but in time it will become most evident to those willing to look. Hope I'm wrong, hope I'm badly wrong but I'm not feeling warm and fuzzy right now. Consumption based finance capitalism has run it's course, more and more people are understanding this and many are choosing means and methods to work around and beyond it. Where we end up is anyone's guess but I do think the age of growth has seen it's day. The nabobs who run this country are just serving themselves and feeding the rest of us fictional stories so we don't yet abandon the hampster wheels but at some point we will turn around behind us and see those free riders and begin to looks for the means and the way off said wheels. Fact is, it's already happening.
