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All government spending is a tax

Discussion in 'Culture & Religion' started by Dr.Who, Apr 21, 2009.

  1. Dr.Who

    Dr.Who Well-Known Member

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    AS the title says: A;;; government spending is a tax. Whatever they spend they must eventually get the means to pay for it from us. That is just the way it works there is no way around it. Government does not produce anything, they don't generate their own income, they are beauracrats, managers and nothing else. They are just like the corporate CEO's who run companies except that the company they run has a monopoly and is in control of all of us.

    So here is an article about that:

    "July 17, 2006

    All government spending represents a tax. The inflation tax, while largely ignored, hurts middle-class and low-income Americans the most. Simply put, printing money to pay for federal spending dilutes the value of the dollar, which causes higher prices for goods and services. Inflation may be an indirect tax, but it is very real- the individuals who suffer most from cost of living increases certainly pay a “tax.”

    Unfortunately no one in Washington, especially those who defend the poor and the middle class, cares about this subject. Instead, all we hear is that tax cuts for the rich are the source of every economic ill in the country. Anyone truly concerned about the middle class suffering from falling real wages, under-employment, a rising cost of living, and a decreasing standard of living should pay a lot more attention to monetary policy. Federal spending, deficits, and Federal Reserve mischief hurt the poor while transferring wealth to the already rich. This is the real problem, and raising taxes on those who produce wealth will only make conditions worse.


    Borrowing money to cut the deficit is only marginally better than raising taxes. It may delay the pain for a while, but the cost of government eventually must be paid. Federal borrowing means the cost of interest is added, shifting the burden to a different group than those who benefited and possibly even to another generation. Eventually borrowing is always paid for through taxation.

    The third option is for the Federal Reserve to create credit to pay the bills Congress runs up. Nobody objects, and most Members hope that deficits don’t really matter if the Fed accommodates Congress by creating more money. Besides, interest payments to the Fed are lower than they would be if funds were borrowed from the public, and payments can be delayed indefinitely merely by creating more credit out of thin air to buy U.S. treasuries. No need to soak the rich. A good deal, it seems, for everyone. But is it?

    The “tax” is paid when prices rise as the result of a depreciating dollar. Savers and those living on fixed or low incomes are hardest hit as the cost of living rises. Low and middle incomes families suffer the most as they struggle to make ends meet while wealth is literally transferred from the middle class to the wealthy. Government officials stick to their claim that no significant inflation exists, even as certain necessary costs are skyrocketing and incomes are stagnating.

    The transfer of wealth comes as savers and fixed income families lose purchasing power, large banks benefit, and corporations receive plush contracts from the government-- as is the case with military contractors. These companies use the newly printed money before it circulates, while the middle class is forced to accept it at face value later on. This becomes a huge hidden tax on the middle class, many of whom never object to government spending in hopes that the political promises will be fulfilled and they will receive some of the goodies. But surprise- it doesn’t happen. The result instead is higher prices for prescription drugs, energy, and other necessities. The freebies never come.


    The moral of the story is that spending is always a tax. The inflation tax, though hidden, only makes things worse. Taxing, borrowing, and inflating to satisfy wealth transfers from the middle class to the rich in an effort to pay for profligate government spending, can never make a nation wealthier. But it certainly can make it poorer."

    http://www.house.gov/paul/tst/tst2006/tst071706.htm
     
  2. dahermit

    dahermit New Member

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    I agree. All this spending is a tax that will result in a very bad outcome. Obama should just let this country spiral into a depression worse that the one that started in 1929. Do nothing to try to stop it. Because the only people that it will hurt are those who do not have huge amounts of money saved (the working class). Their wealth will still be intact if we enter a depression by means of their cash reserves (Dick DeVoss, former Republican contender for Michigan Governor, is an example...account in Cayman Islands).

    All this spending may not stop a huge depression, but sitting around and doing nothing to try and stop it is surely not the answer either. A huge national debt is only slightly better than doing nothing...but it is better.
     
  3. Dr.Who

    Dr.Who Well-Known Member

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    The damage to every single American in terms of economic loss due to a bad recession would have been far less than the damage due to each persons share of the "recovery." (right now each Americans share of the debt is about $50K, do you have a family of four? Then call it $200k and you know that while we have been told the rich will pay that the reality is that we do actually share it)

    There was never a likelihood that this unremarkable recession was ever going to spiral into a depression. contrary to what our president has said it is neither longer than all previous recessions, worse, or different by any measure of GDP, employment, or whatever. When one cherry picks one can show that it is longer than at least one other recession, or worse than at least one other, or different than at least one other - but who cares. All that shows is that recessions are not all built alike.

    The next problem of course is that while doing something may seem like a better idea than doing nothing there is actually no evidence from any of the many past recessions that government action ever makes them better and there is some evidence that gov actions can make them worse.

    Next, I would point out that doing nothing is not doing nothing. Every single American doing their best to better their situation in life is an awful lot of economic activity that all adds up to us doing an awful lot to fix this. Yet too many of this admins actions work contrary to encouraging people to work hard and be productive. Too many policies reward those who did not run their banks right, or make the mortgage payment on their investment home, or go to school, or be a good employee by doing the basics of just showing up and working an honest days work.

    We were warned however, P. Obama told us in the campaign that he wanted to remake America in his own socialist way and that it didn't matter if it hurt the economy he was going to do it. (If you want the quote I am sure someone can find it because it is a lot more damaging than what I just wrote).

    And yes there is no doubt at all that what is being done now will help banker and hurt regular folks - hurting the poor the most. Inflation is a dangerous dangerous tax and there is no getting around the fact that printing money by the fed devalues the dollar of every single American (and in fact any person who actually holds a dollar).

    Do you have a house? Do you have a savings account? Do you have a retirement account? Do you have a job? Do you plan to buy anything with US dollars?

    If you answered yes to any of those consider that the policies that are happening today have already made all those things worth less by a significant amount and are going to devalue them a lot more in the next few years.
     
  4. dahermit

    dahermit New Member

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    I feel so much better now that we, the American people have your personal assurance that we are not in the process of spiraling down further into a depression. What did you say your field of expertise is?...psychology? Well...that is almost the same as world economics isn't it? So glad to hear that it is an "unremarkable recession"(you must be one of those rich folks with a lot of money saved up).
     
  5. Dr.Who

    Dr.Who Well-Known Member

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    Feel free to show how this recession is remarkable. Feel free to share one compelling statistic showing that it might have spiraled down into a recession strong enough to justify spending billions of dollars on social programs that have not made one iota of difference yet.
     
  6. dahermit

    dahermit New Member

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    The following do not have your credentials of being a psychologist but the net best thing, they do have expertise in economics:
    http://www.neurope.eu/articles/91020.php
    http://aotearoaawiderperspective.wo...dicts-worst-recession-since-great-depression/
    http://www.reuters.com/article/newsOne/idUSTRE5090QL20090110
    http://www.huffingtonpost.com/2008/12/09/world-bank-chief-economis_n_149759.html
    http://www.telegraph.co.uk/finance/...-World-War-II-Darling-to-admit-in-Budget.html
     
  7. Dr.Who

    Dr.Who Well-Known Member

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    This one says

    "The world could go through its worst recession since the Great Depression as a massive financial crisis has slashed global investment and sharp drops in commodity prices severely hurt poor-country exports, the World Bank warned."

    One would note that saying it could go through something is different than saying it is going through something.

    It also says:

    "The global development bank slashed its previous estimates for global growth to 2.5 percent in 2008 and 0.9 percent in 2009"

    Which means that there is growth. A recession is typically when there is contraction or the opposite of growth. (except when people change the rules)

    It also says:

    "The current economic slowdown has lasted longer and been spread wider than recessions in past decades.."

    An economic slowdown is far different than a recession. Clearly the article indicates that this COULD be a recession but IS a downturn.

    A downturn is less severe than a recession. And a long downturn is not as bad as a short recession. In fact since downturns are unpleasant it is better to spread the pain out over a longer period of time than to experience it all at once.
     
  8. Dr.Who

    Dr.Who Well-Known Member

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    This one I could not get to open. But based on the title it seems that it is saying there is a recession PREDICTED. Which of course implies that it is not yet a recession at the time of writing. Or maybe there is a recession but they were just predicting it would be bad.

    Since I could not open it feel free to quote the section that shows the recession possesses any remarkable characteristic right now other than the fear of bankers.
     
  9. Dr.Who

    Dr.Who Well-Known Member

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    This one too only talks about the fears of what COULD happen but no where does it demonstrate that there is anything remarkable about this recession right now to justify those fears.

    I think it is worth noting that the panelists of economists in that article are on a government panel that is charged with finding the results the government wants them to find. What they have done is changed the definition of a recession so that a downturn can be called a recession. They were calling this a recession long before we had two consecutive quarters of negative growth which is the traditional definition of a recession.

    I have already predicted that in some time the economy will "recover' as soon as they go back to using the old definition.
     
  10. Dr.Who

    Dr.Who Well-Known Member

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    This one says:

    "The increasing likelihood of a prolonged global economic downturn..."

    Again it is not talking about a recession that is in any way remarkable. This one rightly names it a downturn and then only talks about the likelihood of what may happen in the future.

    How is this recession remarkable? What measurement of it is scary?

    This recession is not longer than most others. It is not more severe than most others. It is not more of anything than most others, except that it is apparently scarier to fearmongers who are hired by the government to spread fear.
     
  11. Dr.Who

    Dr.Who Well-Known Member

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    This one I also could not open. (seems to be a problem with my router)

    But based on the title that Britain is "facing" a recession it would appear that it is also not talking about anything real we are experiencing.

    Because you see if the recession were bad or long or whatever then the headlines would say things like "Britain experiencing worst recession..." instead of "facing" it.
     
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