Miles's blog

According to USA Today the infrastructure of America is deteriorating so badly that it not only adds billions of dollars of unnecessary shipping costs, but it actually threatens to restrict the economy.  Highways full of gaping holes, and waterways, railroads, and ports are in need of major repair.  However, with the political sentiment in this country prohibiting the raising of taxes, it appears very few of the repairs will be made. 

The drumbeat against raising taxes, of course, has always been present.  Currently it has been seized upon by primarily Republican legislators and their right-wing supporters.  Speaker of the House John Boehner recently said “taxes kill jobs.”   No one seemed to call him on that but I sincerely doubt that it is true.  The corollary of the no new tax pledge is the consistent wailing about the national debt and the burden it is placing on America’s youth, as if at some point in the future the premier of China will call in these debts and summarily throw out all 300 million Americans in some sort of super-foreclosure.  Of course, if you won’t raise taxes and you must eliminate debt the only way to do so is to cut expenditures.  Governments on all levels have been doing so for years.  Neverthless, the economy is not improving much and government services have become intolerably bad.  Meanwhile, politicians cannot even engage in a debate over the solutions contained in the Erskine-Bowles plan because to implement any of the suggestions would require compromise, which has become a sign of weakness.

Boehner may or may not be right that taxes kill jobs, but only in the private sector.  The theory goes, I guess, that when people (rich people in this case since the proposed new taxes fall primarily on the richest Americans) are required to turn more of their earnings over to the government, they stop buying things and investing in American businesses.  Even assuming that is true (I mean are you telling me that someone who makes over $1 million dollars a year will stop buying goods if forced to pay an extra $10,000 a year?) what exactly will they stop buying? American-made goods?  They might choose to buy imported cars, fancy stereo systems, and high-end furniture.  They might choose to buy paintings for $120 million. 

I doubt they will restrict investment in businesses which will make them money, but of course they will put less in the stock market.  So businesses like Apple, Exxon, and Facebook will have lower stock valuations.  Why is that a problem for the economy?  Wouldn’t you rather know your money is going to fix the bridge you drive over than to help create the iPad4?

Taxes create jobs in the public sector, and for those businesses which contract with the government.  For some reason, many people have a problem with government work.  They decry the size of government and insist the problems with America derive from too much of it.  I have written before about my feelings about reducing the regulation of food safety, drug safety, and law enforcement.  I saw on the news the other night that the federal government is financing a major study on Alzheimer’s.  Does Speaker Boehner feel that is a waste of money? 

Yale economics Professor Robert J. Shiller made a pretty compelling case in Sunday’s New York Times why austerity measures on behalf of governments sound good, but work badly.  His point, in part, was that thinking of government economics like family finance is a misleading analogy.  That while a family can pull in the purse strings, the government is not in the same position.  However, even using the analogy, if your family was hurting for money would you turn down a chance to make more?  Governments need revenues.  Taxes are the source. 

Shiller points out that economic theory since the 1940s has been that raising taxes and expenditures the same amount results in raising national income in that exact amount.  The economy grows without loss of income.  Why? Government workers.  They pay taxes for one thing.  They create the foundation—infrastructure, for example—that allows for growth in the private sector.  More government employees means shorter times to generate needed government paperwork.  More regulation might prevent stock fraud, Medicaid fraud, and increased tax collection.  Perhaps it would stimulate approval of new drugs.  Increased medical research could in the long-run reduce medical costs for treating illnesses.  After all, government expenditures eradicated smallpox.  Was that a waste of taxpayer money, Mr. Boehner?

The Great Depression was ended but increased government expenditures, first through New Deal Legislation, later to fight World War II.  Some of the new government employees are probably collecting money from the government anyway in the form of unemployment or food stamps (or both).  Putting them to work would be a far better use of the tax dollars.  More employed people mean more with health insurance, reducing premiums and allowing for hospitals to collect from more patients.

I know I sound more and more like a Democrat every day.  Believe me, that is not my intent.  But I do believe increased government expenditures, possible only with increased revenue, are necessary.  And I believe that a country whose citizens are willing to pay $194 to see Book of Mormon, thousands of dollars to have cancer surgery on their cats, and over $400 million a month on video games can afford it.

(You know, the more I read these types of blogs, the less interesting they are.  I think I will stick to more personal blogs and more funny ones and leave politics to the professionals.)