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July 15, 2012 / janesezso

3 More Progressive Lies via R. Reich


Why would you want to work so hard if you couldn’t keep what you worked so hard for? ~Jane

“The harder the conflict the more glorious the triumph. What we obtain too cheap, we esteem too lightly.” Thomas Paine

“In order to stimulate growth there has to be an incentive associated with the risk, and that incentive is typically the generation of more funds.”

3 More Progressive Lies via R. Reich

“A blog by Robert Reich caught my attention. Reich has an impressive resume as he was a former Secretary of Labor under the Clinton Administration and was a member of the Ford and Carter administration who currently serves as the ‘Chancellor’s Professor of Public Policy’ at the University of California, Berkley. Nonetheless, the man couldn’t be more wrong about the economy. I picked my three favorite headlines from his blog post and pointed out the ignorance of his progressive statements.” J. Smiles

#1 – “Tax cuts for the rich trickle down to everyone else. Baloney.”

Tax cuts for the rich, or everyone, allows individuals to keep the money they earn, regardless of their income level. This allows individuals to have more financial security as they accumulate money at a faster rate – this security encourages them to purchase more goods and services, thus boosting the economy. If you allow the rich to have more money they will take it a step further and invest creating more jobs and therefore taxpayers – increasing the amount of revenue the government, will generate. The more money people (at any income level) earn, the more willing they are to purchase products and/or invest in future economy possibilities. The benefit of lower taxes improves the lives of people at EVERY LEVEL, not just the rich and allows for a greater chance for class mobility in the populous.

#2 – “Higher taxes on the rich would hurt the economy and slow job growth. False.”

This is my favorite – because it’s by far the most untrue. It directly correlates with number one, but deserves its own attention because increasing taxes hurts the economy. The less benefit there is to gain from an investment, the less incentive there is to invest. In order to stimulate growth there has to be an incentive associated with the risk, and that incentive is typically the generation of more funds.

The government has never, under any circumstance, jump-started the economy. Many will cite the Great Depression era as a rebuttal to this statement, but a closer examination shows this to be false. The origin of the great depression was stimulated not only by the influence of European Economists, but also by the artificial influence of increased regulations and rising tax rates.

Prior to the great depression there was a shorter depression that occurred in 1920 that only lasted 18 months, but was quickly averted. Wilson slowly raised the rates on the wealthiest Americans to 73% and began a movement towards massive regulations of business, which slowed the possibility for business to grow. These high end rates combined with stagnating regulations forced business to drastically slow production and people stopped investing, but this crisis was headed off as Harding and Coolidge took office and dropped the top rates to 25% and greatly reduced regulation on business. This produced the roaring the 20’s.

Hoover took office and began implementing progressive regulation. This regulation slowed business, which forced Hoover to raise taxes, and then he raised them again, and again, and then found himself as a direct influence in the Great Depression.

Markets will accommodate higher taxes rates when permitted to correct themselves without excessive regulations and higher profit margins; however, the more regulation placed on the markets the heavier the burden becomes – leading to “stagflation”, which occurred in the 1970’s under the Carter Administration. How was this fixed? By Ronald Regan and economic deregulation.

Obviously, you cannot cut all taxes and expect the government to operate. Some taxes are necessary; there is a point at which cutting taxes does nothing for the economy. Luckily, for us that the current tax rate forces a two parent middle class family making a combined $75,000 a year has to pay a quarter of their income to the government. I think that their kids would probably want that money to go to college on. Wait, I forgot the government now controls all loans to students, which they charge interest on, thus making them more money – and placing the future generation firmly in their pocket. Don’t be fooled by progressive lies, trickledown economics does work and has improved the lives of millions of Americans in the past, not just the rich.

#3 – “Cutting the budget deficit now is more important than boosting the economy. Untrue.”

This is just an asinine statement. Cutting the budget would boost the economy. Less money would be taken out of the pockets of the people who earned it. The government would spend less, allowing more money to be spent in the economy. Honestly, the budget deficit is the seminal question of our time period. We must fix the budget, we must reign in government spending, and we must examine closely how government spends money.

Or we could be like the progressives, ignore the deficit, and pass a health care law that is going to add 1.5 trillion dollars to the deficit in the next decade.

Progressive mindsets are boggling. How one can think we can run a Robin Hood government is beyond logical. Is there probably a little bit of both necessary to make a successful economy? Yes. But too much of anything is bad and currently we have too much progressivism in America.

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