Tuesday, December 7, 2010

Airing of the Grievances

So I haven't posted to my blog in over a year. There are many reasons for this, but they mostly boil down to laziness. If necessity is the mother of invention, then "vehement disagreement" is the mother of blogs. In the past couple of weeks, I have seen many, many things posted as the statuses of friends on facebook that I adamantly disagree with. In leiu of starting a back-and-forth that would have possibly led to who knows what, I am going to air it here.

Today, a friend (with whom I have polar opposite politcal views) posted, "Preserving a tax cut is fiscally the same as paying for an entitlement". While this may be technically true, it doesn't necessarily make it "fiscally responsible". Let's look at the ramifications of both actions.

Scenario: $100M spent on entitlements: Recipients of entitlements take the money that they are given and use it for whatever purpose they chose. In the end, the money will eventually be spent and the revenue from that spending for the government is sales tax. There will be movement of product, but no inherent economical growth.

Scenario: $100M in tax cuts: If recipients are middle income families, we have the same ecnomic growth as money spent on entitlements. If the recipients of the cuts are higher income families, they are likely to be small business owners. In this case a tax cut is the same as a lowered business expense and that lowered business expense allows that money to be used to grow their business. Growth is realized in a couple of ways (lower operating expenses leads to lower prices, which increases demand, which increases workforce needed). --- The end result: tax revenue from product movement, income taxes from new employment, product demand, real economic growth, ad infinitum.

Whew, glad that is off my chest.

I guess this means I'm back on the blogging wagon. Or is it "off" the blogging bandwagon....

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