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Originally posted by rsbiomedical
...Of coarse higher taxes will not stop me from earning more money, but higher taxes prevent me from investing money in places that create growth unlike the government.
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Why is it always assumed that government spending is bad? That it never creates growth or contributes to economic prosperity? Economists in the 1940's recognized the strong role that government spending during the war played in boosting the economy. They had to take on HUGE amounts of debt to do it (in 1946 US national debt was 120% of GDP, much greater than today) but the economic boom of the post war period allowed the economy to rapidly outgrow the debt.
Governments spend money on infrastructure. Use roads as an example. How is building roads not contributing to economic growth? Private companies are often employed during the construction, maintenance and repairs. Even in cases where governments themselves do the construction, they still employ people, often at good wages. What do those people do with their money? Buy T-Bills? Nope. They buy cars and TV's and other consumer goods, contributing to economic growth and prosperity. It is a form of ecnomic redistribution, but we get roads and economic growth.
Quote:
Originally posted by rsbiomedical
...John your trading places analogy is poppy cock; we have a delicate balance between investing in social infrastructure and maintaining or improving our way of life.
Compare us to the Middle East? How can you compare a regions economics with the US when it has 1 export. If the oil is no longer needed you will be reading about unicef for the Middle East. In the Middle East you either have the money or you don't, I don't hear you discussing their class inequities or France, Germany ect ect ect.
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Exactly. Do we want to be like the middle east? Their class inequalities are precisely my point. Not sure what Germany and France have to do with it. All I'm saying is that a balance of capitalism, democracy, and stabilizing welfare state have allowed North America to become the dominant economic force. Why upset the apple cart? Instead of wrecking it, let's fine tune it and enhance it.
It is not a coincidence that the rise of Western Culture to the top of economic might has been built through the welfare compromise and the intervention of goverments in fiscal and monetary policy. We learned from the lack of intervention and the terrible result: the 1930's depression.