THE WAY I SEE ITby Don Polson: Economic recovery, abundance or demise

 THE WAY I SEE IT by Don Polson   Red Bluff Daily News 5/15/2012

Economic recovery, abundance or demise

In case you missed last week’s deadline to reserve a seat, seats or a table at the Republican Red, White and Blue banquet, you can still pick up the phone and call 529-1226 or 567-2323; tickets will not be sold at the door and are even now subject to availability.

Appearing at tonight’s Tea Party Patriots meeting, 6 PM at the Westside Grange, will be 3 candidates for the District 1 Congressional seat: Doug LaMalfa, Gregory Cheadle and Michael Dacquisto. They will each address the Tea Party Patriots and take questions.

I was fortunate to hear the president of the American Enterprise Institute (AEI), Arthur C. Brooks, talk on the radio about his new book, “The Road to Freedom,” intended to complement the seminal work by Austrian economist and philosopher Friedrich Hayek, “The Road to Serfdom.” Hayek “warned of the danger of tyranny that inevitably results from government control of economic decision-making through central planning, and argued that the abandonment of individualism, classical liberalism, and freedom inevitably leads to socialist or fascist oppression and tyranny and the serfdom of the individual.” (Wikipedia)

Brooks’ “The Road to Freedom” lays out the political, legal, cultural and economic measures necessary to reverse trends, policies and laws that have, over the last century, effectively neutralized the power and freedom of the individual and the branches of government closest to the individual. It is very relevant to the elections facing us, which will potentially cement the quasi-tyrannical federal tax and regulatory status quo, or begin to restore the vision of our founders and Framers of the Declaration of Independence and Constitution. Their vision placed the freedom and happiness of the individual American at the core of all law and philosophy, which vision has sadly been eroded by liberals and progressives of both political parties.

The leftist, socialist model has inexorably smothered the individual-based model, almost without our seeing the extent of tyranny and despotism as it happens, much as people in a crowded room are unaware of the stuffiness and diminishing oxygen about to suffocate them. “The Road to Freedom” will be in my vacation-reading stack, and I recommend it for your edification and enlightenment before November.

It is primarily our economic freedom – retaining as much of the monetary fruits of our labor, while providing to governments only that which is legitimately and lawfully authorized by the various constitutions – that determines our happiness and wealth. We now face, as a nation, such financial ruin through wanton, profligate spending that coming generations of Americans are truly in jeopardy of such deprivation and misery as has never been visited upon America, even in the depths of the Great Depression. It is the inevitable, predictable result of debt, deficits and borrowing beyond the ability of future generations to ever pay off, and beyond the willingness of any other nation or people to continue to finance.

Mr. Brooks and the AEI have evaluated every example of massive financial debt in modern times, and have quantified the success or failure of various tax and/or spending responses by different nations, including the United States. Their research can be summarized as follows: Countries that balanced their budgets with a mix of tax increases and spending cuts successfully reduced their debt only in relation to the reliance on cutting spending. The more they relied on raising taxes, the less likely they were to reduce their debt. Countries that reduced spending and cut taxes invariably paid down their debts and achieved economic abundance.

It’s not rocket science to understand why. Government spending is, by definition, a burden on the economy, to be blunt about it. That is why its allowed functions are limited by constitutions. The lighter the burden, up to a certain point (enforcing laws and contracts for a level economic playing field), the easier it is for individuals and businesses to thrive and grow the economic base upon which taxes are paid.

Governments at all levels in America consume over one-third of our entire economic output. We are already at or above the levels of government found in, for instance, Spain or France, and are effectively strangling our own economic output as has already happened in such European nations.

According the IRS, the total taxable income earned by Americans breaks down like this: The total income of all Americans who earn over $75,000 is about $4 trillion. Taking every dollar they earn wouldn’t sustain the federal budget for one year, including the deficit, leaving nothing for any state or local government, and leaving nothing for the next year because no one will work for nothing. The total taxable income of those earning less than $75,000 is a little over $1.3 trillion and most of them will have no jobs after the government seizes the income of the first group.

America grew its economic way out of the debts of WWII. In the 1980s federal revenues almost doubled from Reagan’s growing economy; Congressional Democrats tripled spending and deficits resulted. With a Republican Congress holding spending in check, Clinton ultimately presided over surpluses. The Bush tax cuts grew the economy, lowered unemployment, raised tax revenue, and produced lowered deficits – only $160 billion in 2006. Democrats came to town, immediately created a $460 billion deficit and the rest is debt history.