Tuesday, December 7, 2010

Dems Flunk Econ 101

The reaction by the left to President Obama’s deal to extend the Bush tax cuts has been predictably bad. His base is sorely disappointed that he didn’t fight to increase taxes and their posts prove it. Another thing they prove is that those on the left are economic illiterates.

I am amazed by the comments in forums about Obama maintaining our current tax rates and extending UE benefits for another 13 months. Check them out here and here. The level of misunderstanding of basic economics is astounding.

In our free market economy, each new mandate is a burden on business. It imposes a cost on the business that the average employee never sees, but is paid anyway. Yet this basic economic law is lost on them. Also lost on them are the basics of wealth generation. Check out this quote from none other than Nancy Pelosi concerning the impact of unemployment benefits:

"...Unemployment insurance returns $2 to the economy for every $1 spent," said Pelosi last week. "This is money that is needed by families to buy necessities, to heat their homes... and immediately injects demand into the economy, creating jobs."
Now, I’m not sure where to start on her statement other than to say that every word of it is wrong, including the “and’s” and “the’s.”

How can she dictate national economic policy correctly if she fails to understand the basics of a free market economy? Oh, wait, our current unemployment rate of 9.8% is proof enough that she doesn’t know what she’s doing. Remarkably so, this woman is allegedly worth a great deal of money.

There are some on the right who aren’t too up on economic theory, either. Check out this comment from Foxnews.com’s Bradley Blakeman concerning the debate over Obama’s recent deal to keep our current tax rates:

“Republicans believe that the way to get people back to work is by incentivizing the private sector not penalizing them and paying citizens to be idle and unproductive.”

“Republicans believe?” We’re not talking beliefs here. We’re talking about economic laws and what happens under a repressive structure of government that is openly hostile to the creation of wealth.

Washington is the main reason our economy is in the sorry shape it's in today. Too many rules, regulations, and high tax rates have finally caught up to us, resulting in the closest thing to a depression that most of us have witnessed in our lifetime. There is a root cause for our current situation: the Community Reinvestment Act. This single piece of legislation forced banks to make loans to those who were bad credit risks and could not otherwise afford a home. Under the penalty of law, banks started losing money, which they attempted to bundle into other financial packages to offset this new federal requirement. And it worked for a while, right up until the presidential election of 2008. That’s when the excrement struck the air-moving device and our economy tumbled into the deepest recession in modern American history. We’re still in it because of the economic ignorance of those we’ve managed to elect to high office in Washington.

We can't keep putting restrictions on the "evil rich" and expect to maintain our economic power, it's that simple. Yet, we keep on voting for economically illiterate politicians who know nothing about how our free market economy works. In addition, those same politicians cater to their left-wing base, which insists upon punishing those in society that provide us with the money to maintain our way of life. The same way of life that is the envy of the world, the same way of life that has people from far away lining up to become Americans.

If you're still confused as to how this works and your eyes glaze over when the talk comes to economics, mathematics, percentages and tax rates, watch this video from Lee Doran entitled "Bar Stool Economics" (courtesy of The Right Scoop.com) and glaze no more.

If we want to keep our good paying jobs, we need to start electing pols with real-world experience. There is a reason why we're suffering needlessly under Obamanomics: he and his advisors have no experience in the business world and have never run a business. I'll give them the benefit of the doubt for a while, but their continued insistence upon more and more federal intrusion into our daily lives is hurting our ability to do business and generate wealth.

Also, don't buy into the class warfare that the Dems are always spouting. It takes a certain type of psychosis for a rich person in Congress to divide Americans along economic lines. Don't you want to be rich someday too?

If you side with them and you later become rich, how do you think you'll be treated?

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