Monday, August 5, 2019

Tax the Rich!!!

A communist would gladly walk over the corpses of a hundred poor people to throw a rock at a rich man.

Watching snippets from the last set of Democratic debates, I conclude that every last one of them is a communist.

Tax the rich! Tax the rich! Tax the rich!

Punish those who would dare to work harder, delay gratification and be more successful in life.

So here is the joke: Our government's generosity is funded by debt, that is, by borrowing money.

When a person, business or government entity proves to be a poor credit risk, they must pay a higher interest rate to the person lending the money.

If you are a government, you have the option to print more money to pay past debts. More money chasing proportionately fewer goods results in prices going up and the value of savings going down. Everybody's money is worth less.

"Ha, ha, ha, ha" laughs the poor person. "I don't have any savings. The joke is on you."

The poor person's savings are hidden. Even though Social Security benefits are "indexed" to inflation, the indexing leaves out "the volatile fuel and food sector". Get that? Social Security is cost indexed to everything you DON'T need.

Furthermore, programs like Supplemental Nutrition Assistance Program (Food Stamps, EBT cards) play a shell-game where they substitute less expensive foods for more common, higher priced sources when determining periodic cost adjustments. This policy is hidden by giving it a weird name, Hedonic Regression. The thought process is that if the price of hamburger goes up then consumers will seamlessly switch to chicken thighs. When the price of thighs goes up, they will switch to chicken feet. When the cost of chicken feet goes up, they will switch to soybeans. When the price of beans goes up, they will switch to composted food waste. And so on, and so forth.

Getting back to the cost of borrowing money: When a state or city cannot borrow money then all of those pork-barrel projects disappear. No more 27 people paving a hundred meters of street. No more Americorps. No more artist-in-residence. No more old hippies getting paid to read to kiddies at the library. No more cops working second and third shift; you will have to file your own crime reports on-line. No more free stuff.

The rich people? Yeah, they will get bruised. But not like the slob who is surviving on SNAP benefits or counting on Medicaid. Not like Ralph Kramden who puts food on the table and pays the bills by driving a municipal bus.

The politics of envy leads to an evil place.

Bonus data
Official government interest rates from around the world

The ugliest of the ugly
Ugly. A sampling of larger countries that are showing economic distress
Our peer group. Again, many of the lesser known economies not shown.
Zero or almost zero
Negative interest rates


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