DJH: I just read this unmitigated piece of crap by Paul Krugman in the New York Times — “The Flimflam Man.” It is essentially a hatchet job on Senator Paul Ryan’s “Roadmap for America’s Future.”
Krugman said the Ryan plan is a fraud that makes no useful contribution to the debate over America’s fiscal future.
Most honest economists of the left and the right say Ryan’s plan is the closest thing to a real solution for today’s economic mess. It calls for serious reductions in federal spending and a simpler tax plan that reverses the recent trend to fund the bloated government on the backs of the rich!
Krugman is Pushing the Flawed Liberal Kool-Aid
I know, I know, Krugman won the Nobel Prize in Economics; so according to them he’s no dope. Let me point out that Krugman won that award on October 13, 2008 — about a year before that same bunch of pious clowns gave Obama the Nobel Peace Prize!
As I discussed earlier in the week, Krugman is repeating the liberal lie that the rich can always pay more because they obviously have more, but it makes two monumental flaws with this line of thinking:
1. The Rich will not keep their money in the US until the liberals take it all; they’ll redeploy it other countries that appreciate private sector capital investment with little or no taxes.
2. When the government recklessly takes more and more from the rich, they starve the flow of private sector capital, which is the source of virtually all good jobs in America (i.e. jobs that contribute to the national wealth — not consume it, like most government jobs).
Krugman’s Flawed Answer
About 6 weeks ago, Krugman authored a piece The Third Depression. In it. he charged that Obama hadn’t spent nearly enough money and he should double down on the originally woefully flawed stimulus package.
So there you have it. The Nobel Laureate Krugman believes that the best way to save the US economy is to go deeper in debt and rob whatever life is left in private sector capital to further squander in the hands of the federal government — yeah right!
There Aren’t Enough Rich to Tax to Feed This Pig
As we start approaching multi-trillion deficits, we are also approaching the point where we couldn’t balance the budget even if it were possible to tax 100% of the rich’s income; according to an analysis done by The Heritage Foundation:
Congress would have to decide to raise top rates to levels most Americans would consider confiscatory. In 2006, the latest year of available data, there was $2.2 trillion of taxable income for taxpayers earning more than $200,000. Assuming the amount of income at that level is similar this year, Congress would need to tax 80 percent of that income in order to close the projected $1.8 trillion deficit. Tax rates at such levels would significantly decrease economic activity and taxpayers would likely avoid or evade paying them so the revenue gains would likely never materialize.
You Can’t Slash The Budget Enough to Close the Deficit
Although several conservative politicians, economists, and “yours truly” have laid out plans to close the deficit by slashing spending and entitlements, the fact is that we live in a political system that never actually does what it should do for it’s own good.
If we started to slash government spending to the level needed, the economy, job market, and the stock market would soar. As soon as this happened, people would assume that “we’re out of the woods,” and go back to electing liberal politicians who make promises they can’t keep. The end result would be a return to deficit spending.
The Rich Are the Only Ones Investing in Private Sector Jobs
Businesses need capital to exist; they need money to get off the ground, purchase facilities and equipment, and expand products and open new markets. The Government does not invest in private sector businesses and neither do the poor or the middle class. The only people who invest in private sector businesses are people who have money left over after they pay their bills and their taxes — also known as THE RICH. The more you tax the rich, the less money they have to invest in creating private sector businesses and jobs; in other words the longer you get a jobless recovery like the one Obama has created in 2010.
Tax Everyone But The Rich
The best way to jump start the job market and the economy would be to freeze all income, business, and capital gains taxes — they’re high enough; it’s time for the government to learn to live on a fixed income.
If we can’t tax the rich without losing jobs, and we can’t slash the budget deep enough to wipe out the deficit, what do we do? I say tax everyone but the rich.
The best way to do this is with a national sales tax or value-added tax. Everyone would pay according to their wealth (the wealthy buy more stuff than the poor), but this tax would not disrupt the flow of capital into the private sector. It would also tax people who make a living in the underground economy (gangsters, drug dealers, illegal aliens, and people who “work under the table”), as well as foreign tourists or visitors.
Perhaps most importantly, if everyone paid taxes, they’d be more concerned about how the government spent their money!
Like so many of my ideas, this one is a perfect solution to a unsolvable problem. Do you think any of our politicians will suggest something like this?
I doubt it, but I can still hope!
Dave
[…] August 11, 2010 by Dave Horne DJH: Yesterday, I did a story in response to Paul Krugman’s hatchet job on Senator Paul Ryan’s “Roadmap for America’s Future” in New York Times called: It’s Time To Tax the Poor (and the Middle Class). […]
I support the fair tax. There is some political capital behind it.
http://www.fairtax.org/site/
Dana