Stimulating Civics Lesson

, James F. Davis, Leave a comment

Most people seem to forget that the government cannot give one person money without taking it away from someone else.  Politicians seem to forget that they forcibly take money from persons who earned it and give it is someone who did not earn it.

All politics is about economics.  If one does not have a sound knowledge of economics and economic history, it is difficult for elected representatives to make informed decisions that will improve the quality of life of the people they represent rather than hurt them.  And many politicians do not care if it helps get them re-elected.

After all, the top 1% of income earners pays 40% of all income taxes. The top 10% pay 71%. The bottom 50% pays less than 3%.  Politicians naturally think if you take from the top 10% and give it to the bottom 50%, they will get reelected.

But these top tax payers are the ones who hire people. The more the government takes from them, the less inclined they are to expand their businesses and hire more people.

The so-called $787 billion stimulus bill has resulted in the loss of 4 million jobs in the private sector in the past year.  These are the people who worked to produce things of value that someone was willing to purchase voluntarily. It is mutually advantageous.  That is what gives us our standard of living. The only jobs the Stimulus bill saved are government jobs that need to be reduced to allow the economy to rebound.

During the first six years of the Bush administration unemployment was about 5%.  Then, in 2007, Liberal Democrats took control of both the House of Representatives and the Senate. We have had a net loss of jobs every month but one since then.  Last week another 469,000 people filed for unemployment yet the Labor Department says only 36,000 lost their jobs in February.  There was virtually no job loss in the government sector.

Officially unemployment is now about 10%.  Under employment is close to 20%, if you include those that have given up looking for jobs. We are in a Depression!

Ostensibly the Republicans controlled both the House and Senate (50 of 100 seats) during the first six years of the Bush administration.  But in reality there were five Liberal Republicans in the Senate who usually voted with the Liberal Democrats, three of whom have since left the Republican Party.  To get anything through the Congress, Republicans usually had to give pork to the Liberal opposition. And yes, to be fair, some Republicans pushed pork or ‘earmarks’. That’s why the Republicans lost control of both Houses.

Since Liberals won control of the Presidency, the Senate and the House of Representatives, the United States economy has continued to lose jobs.  One reason is that most people who create jobs realized that Liberals would introduce legislation to increase taxes, make more costly regulations and increase debt.  Knowing that this would probably have a negative effect on their business’s profitability, they stopped hiring.

Liberals have allowed the Bush tax cuts to expire which means everyone’s taxes will go up next year and purchasing power will decrease. Democrats have passed tax credits for businesses to hire people. That is not a tax cut. Why would anyone hire an extra employee to get a tax credit when the owner’s revenues are decreasing? Such legislation is propaganda for the economically illiterate.

In order to survive in the free enterprise sector, when costs go up, either through higher taxes, increased regulations, and/or mandated fringe benefits like the proposed health-care bill, business, owners know they have to reduce their costs to survive.  This usually means finding a way to be more efficient and/or lay off people. This is what has happened during the past three years. Unemployment has doubled.

When President Bush and the Liberal controlled Congress, including then Senator Obama, authorized the bailout of General Motors and Chrysler, essentially what happened was people making much lower salaries are taxed so that the union employees at General Motors and Chrysler continue to receive salary and benefits of approximately $75 an hour.  That is immoral! But as President Obama stated, “I owe the unions.”

Fully half of all stimulus money paid out thus far has gone to pay the salaries of bloated government bureaucracies and union employees and has created new non productive government and make work jobs.  Much of the balance of the stimulus money to North Carolina went for projects such as the following:

(1)    $71,623 for the study of monkeys using cocaine,

(2)     $492,940 to set up another government bureaucracy, the North Carolina Office of Economic Recovery and Investment for the purpose of propagandizing the benefits of the stimulus plan,

(3)    $762,372 to develop computer technology to digitally record the dance movements of performers,

(4)    $147,694 to see if yoga can reduce hot flashes.

So much for creating productive jobs.  These are all payoffs to friends of Democrats. They do not create permanent jobs.

For some reason, the thought that government workers should have their salaries and benefits reduced when tax revenues decrease has not been part of any recovery plan.  What most do not realize is that the reason there is a collapse in jobs in the private sector is because the government is consuming the money that might otherwise have been used to create new lasting productive jobs.  Our economy will not improve until government bureaucracies, taxes and onerous regulations are reduced.

James F. Davis is the President of Accuracy in Academia.


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