Random Economic Thoughts

When other state’s lawmakers give you such a low grade that they openly ridicule your efforts, to the unprecedented extent of naming a bill after your state, perhaps you should pay attention. Perhaps the other 48 states should pay attention, too. **polite cough** Perhaps that attention should extend to DC. Texas lawmakers State Rep. Ken Paxton (R-McKinney) and State Sen. Dan Patrick (R-Houston) dubbed their bill, aimed at limiting Government’s ability to spend, “The California Disaster Avoidance Plan”. As my friends at Americans for Tax Reform note, no state is totally worthless, it can always serve as a bad example!

Perhaps the recent Economic commentary questioning the “Savior” role FDR’s New Deal played in ending the Depression isn’t all horse dookey. For those excited about such things, it’s an Economic Smackdown in the WFF (Worldwide Fiscal Federation) between Keynes da Killa’ and The Austrian Animal! Unfortunately Keynes’ response to the Animal’s ascendancy seems mostly limited to the O so persuasive, “Nuh-uh!”, when confronted with evidence he not only failed to pull the world out of the Depression but actually made it deeper and longer. From the 30s to the 70s, there was little measurable evidence of the impact Centrally Planned Economies and Government Controlled Spending had. But from the 70s to today, watching former Soviet states and European countries try, and then largely abandon, da Killa’s recommendations as less than optimal in outcome while fans of the Animal cut taxes and Government expansion to achieve more satisfying Economic outcomes, FDR ain’t looking so good.

Please don’t ask me to expound on why the current administration seems blissfully unaware of this.

If you made $190,000 a year in 2002 and $280,000 in 2008, would you be happy? If, due to difficult Economic times you were asked to make do with just $275,000 in 2009, who couldn’t find $5,000 to cut? Not the state of Tennessee. When Governor Phil Bredesen (D) took office Tennessee’s budget was $19,000,000,000. In 6 years, Bredesen and a Democratic General Assembly, ballooned it to $28,000,000,000. Faced with a projected shortfall of $500,000,000, the Governor couldn’t find Fraud, Waste or Abuse; Departmental Duplication; Outdated or Unnecessary Spending to cut. Nope! Workers will be laid off! Services will deteriorate! Education will suffer! A 47% increase in just 6 years but he can’t find 2% to cut without the joining in the tradtional, public and highly entertaining “Democrat and GOP Statists as Chicken Little” routine. This despite the fact that my friends at the Tennessee Center for Policy Research publish an annual Pork Report featuring over $250,000,000 in unnecessary spending in 2008 alone.

Why do Big Government Politicians seem to believe an Economy can be, or even should be, an unending stream of Growth and Increase? Why are they terrified of Recessions and Market Corrections and any of the other expected, healthy and naturally ocurring events in a robust and vibrant Economy? Why do they oppose letting failures fail so there is room for new ideas and players? Why the incessant need to muck about with things they are ignorant of and won’t take the time to read to understand? More to the point – why do we let this continue? Is this the meaning behind the wry statement that we get the Government we deserve?

Increasing taxes on something results in getting less of the thing you tax. That is part of the rationale behind “Sin” or “Vice” taxes. It’s also why, at least until recently, smart politicians didn’t use Sin and Vice Taxes to fund recurring expenses. Funding ongoing programs with a shrinking revenue base is stupid since other taxes must later be raised to make up the shortfall everyone knows is coming. Yes, I’m thinking of the Tennessee pols who funded health care for kids by increasing taxes on cigarettes. In a related question – since Income Taxes are taxes on Labor and Productivity, why do politicians ever raise or adopt them? Doesn’t that seem to work against the end they say they want – increased prosperity and productivity? Perhaps their motives aren’t as “of the people, by the people and for the people” as they’d like us to believe.

Blue Collar Muse