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When it comes to economics, liberals consistently remind us that we need a “safety net” to keep people on their toes in bad economic times. While I agree that a safety net is preferred to nothing at all, I believe the safety net should come from private organizations or individuals, NOT from a tyrannous government. Unfortunately, liberals believe government needs to be running everything and coming to everyone’s aid, even though America is the most generous nation in the world. In recent months, I’ve come to the conclusion this safety net mindset has gone a bit too far with modern day liberals in charge. Why do I think that? Because of their out-of-date, “utopian” economic model:

Tax the rich + subsidize the poor = equal middle class for all (i.e. equal mediocrity in tyranny)

Conservatives and libertarians know economics doesn’t work that way. To understand how economics works is to understand how personal incentive and the will to meet your own needs moves the hidden hand of the economy. Where there is less incentive, there is less growth. Where there is more taken from you, there is less incentive to be productive. On the other hand, the liberal mindset is exactly what Karl Marx came up with in 1875:

From each according to their ability, to each according to their needs.

Is it really any surprise that Communists love this Obama guy?

‘Nuff said.

H/T to HotAir

During the recent presidential debates between Barack Obama and John McCain, I keep hearing rhetoric from both sides concerning either “working Americans” or “middle-income Americans.” Their rhetoric seems to be focused on what is considered the “middle-class” in this country, though this country has never really had a tradition of “class” as seen through Marxist ideology found elsewhere. It is argued that America’s middle-class is what makes America great - hard working folks earning a day’s pay for a day’s labor. Politicians continue to scream at us that the American middle-class is dying; the rich are getting richer, the poor are getting poorer, and it’s the worst time to be an American since the Great Depression. Many believe tacking more taxes on those making over $200,000 is a good idea, that paying higher taxes is “patriotic.” Many believe fundamental “fairness” should be invoked in tax policy, and that rich people should pay their “fair share.” However, I think those that put forth such ridiculous arguments really have it wrong and refuse to actually look at reality for proof of their economic beliefs. A few thoughts of relevance:

1. I’ve never seen a poor person create a job: By definition, poor people don’t have money. They don’t have money to start a business, keep a business, or invest in a business. Therefore, poor people won’t create jobs. It’s that simple. Now, rich people have money. They have money to start a business, they have the money to keep a business. They even have money to invest back into their business, whether it be hire more workers, buy new equipment, or keep their employees through tangible benefits. Why victimize rich people when its rich people (or people with money) who create jobs? Without rich people, the poor wouldn’t have any chance at getting a job.

2. What is “middle-income?” : Both Republicans and Democrats have pushed for middle-class tax relief for decades. It’s somewhat surprising however, that their definitions of middle-income have changed. Taking into account inflation, real income growth, cost of living, and other criteria, it seems ironic to me that definitions of middle-income have gone down, while real costs have gone up. For example, during the 2008 campaign, I’ve heard Mitt Romney and Barack Obama both point to a $250,000 dividing line between middle-class and rich. Now, you hear Barack Obama defining the dividing line as $200,000. It’s funny - if one keeps reducing the definition of middle-income while inflationary pressures make things more expensive, the middle-class will shrink automatically.

3. What is “fair share?” : The easy answer is that one’s fair share is whatever the government defines it as in terms of marginal tax rates. Through the promotion of class envy, Democrats have allowed themselves to capture the power to define what is “fair.” Working people (or people with lower incomes than millionaires) have blamed the rich for many of the economic problems in this country, but have clearly forgotten that this economy does not run if rich people don’t work to make a profit. Btw, if the government can decide what is fair, it may also decide what isn’t fair. Both result in freedom being taken away, no matter what tax bracket you’re in.

4. Taxation is slavery: John Locke said that one obtains property by putting their labor into it. For example, if Bob picks an apple off an apple tree, the apple in Bob’s hand becomes his property because he labored to pick it. Further, one’s labor is an extension of oneself. For example, if one is forced to work for the government, the government has taken away one’s property. People work for money. When a person’s income is taxed, government uses its coercive power to take the person’s money. The person’s money is by extension, the person’s labor. Therefore, if the government has forcefully taken one’s money through taxes, the government has taken away one’s property. Thus, the government has forced you into a type of involuntary servitude. The lesson here is that taxes should be kept at the lowest possible level - not just for supply-side economics, but to reduce the slavery involved with turning over money to the government for fear of the government’s monopoly on the legitimate use of force.

A personal rant for today:

As much as conservatives claim to care about the constitution, the economy, the military, or other issues, all I’m hearing these days, especially on the blogosphere is anti-Obama rhetoric. I’m not against such rhetoric on it’s own (I think Obama is a socialist in Democratic clothing), but I think it really ignores a real issue conservatives have been pretty darn silent on as of late: the role of the constitution in terms of the domestic economy and discussion about the economic “crisis” in our midst.

For the last couple months, we’ve all seen that most mainstream news coverage has been dedicated to financial turmoil. The drop in housing prices, home foreclosures, Fannie and Freddie, economic bailout, and global economics have taken the news media by storm. And yet, it seems that major conservative outlets only really care to talk about why you shouldn’t vote for Barack Obama. They’ve blatantly ignored what brought this financial mess to begin with, refusing to discuss why things happened the way they did. Conservatives have continuously sought to discuss why John McCain should be elected, instead of focusing on tearing apart the details about why there is global financial instability. Part of this it seems, is the lack of education about the issue. Conservatives continuously proclaim that the free market is the best mechanism for economic growth. This I don’t deny, and I agree with it. But along with that discussion, conservatives have forgotten that a government bailout is a contradiction of free market principles. What I’ve found ironic is that conservatives have praised a Bush home ownership record (which he’s been so proud of in previous State of the Union addresses) that has improved home ownership rates through sub-prime lending practices and manipulated, “unnatural” credit requirements in some areas. They’ve ignored that there is much risk with placing assets in mortgage-backed securities, which were sure to drop in value once capital dried out because of home foreclosures.

It is troubling to me that major conservative outlets have simply skipped town on this issue and frankly, I’d like to hear more discussion. I have been educating myself about the “crisis” in an effort to understand what went wrong. Instead of simply deferring to government for reasons why things happened, I wish conservative commentators would educate themselves on the issue.

Not to mention, not once have a heard a conservative commentator ask if a government bailout of private investment firms is constitutional. Seems conservatives have once again ignored the constitution they so proudly claim to defend.

Enough said.

I think this is something worth taking a look at. In my opinion, Ron Paul is the only presidential candidate speaking the truth about the United States’ fiscal problems, including the disadvantages of using a paper money system that is not backed up by gold or silver and the hidden costs associated with inflation:

The more I read about him and his political beliefs, the more I can’t get past the idea that Ron Paul could do great things for the Unites States - specifically, putting traditional Goldwater conservatism and the principle idea of federalism back on the map. Unfortunately, the last few years have seen the rise of “compassionate” big government conservatism, a conservatism that rejects its own core beliefs about the role of limited government, spending, and taxation.

Ron Paul would be the perfect candidate if it wasn’t for his anti-global positions. And I’m not talking about the United Nations or the role of international law in wartime. I’m talking about foreign isolationism and economic protectionism. Here’s an excerpt from Paul’s official 2008 election website:

So called free trade deals and world governmental organizations like the International Criminal Court (ICC), NAFTA, GATT, WTO, and CAFTA are a threat to our independence as a nation.  They transfer power from our government to unelected foreign elites.

First off, the International Criminal Court was something that was never signed off by President Bush nor ratified by the U.S. Senate. Therefore, the ICC issue is null and void at this point in time. Second, free trade agreements are actually a good thing.

Times have changed economically around the world. The world is no longer made up of limited, pocketed financial markets like it once was. Global information technology and the ability to travel overseas has increased our ability to communicate and trade with foreign peoples. As it was to the advantage of the Europeans to trade with America in the 1700’s, it is to our advantage to trade worldwide, with the least trade barriers. NAFTA and CAFTA are making it easier for the United States to participate in global trade, knocking down barriers to trading markets and foreign investment. Protectionism in these times simply does not work because the worldwide economic environment is not conducive to a protectionist philosophy. The reality is that the United States cannot economically isolate itself on the world stage. The consequences of such behavior could promote economic slowdown not only in the United States, but other countries as well.

Update: For an interesting take on Ron Paul, check out this article.

Be prepared to pay more for EVERYTHING you buy:

The Democratic-controlled House voted Wednesday to increase the federal minimum wage to $7.25 an hour, bringing America’s lowest-paid workers a crucial step closer to their first raise in a decade.

The vote was 315-116, with more than 80 Republicans joining Democrats to pass it.

Fox News has the latest…

Yet again, Democrats have shown me they are NOT the party of economic success. Thanks more making my hard earned money worth less than it already is.

Democrats are not ruling out raising taxes for the wealthiest people to help pay for tax cuts for middle-income families, House Speaker Nancy Pelosi said.

-Snip-

“As we review what we get from … collecting our taxes and reducing waste, fraud and abuse, investing in education and in initiatives which will bring money into the Treasury, it may be that (repealing) tax cuts for those making over a certain amount of money, $500,000 a year, might be more important to the American people than ignoring the educational and health needs of America’s children,” Pelosi, D-Calif., said in an interview aired Sunday.

Read more…

Here are the problems, Madam Speaker, with your way of cutting taxes:

First, repealing Bush tax cuts on the highest earners really doesn’t do anything for you except penalizing rich people for simply being rich. Second, it undercuts productivity and initiative to put toward wealth creation and investment of capital for those in the highest tax brackets. Third, higher earners who run businesses may have to cut back on workers, wages, investment, and possibly raise prices on products they sell. This passes the cost unto the “middle-class” consumer you’re so interested in protecting and ends up putting an indirect tax on them. This fact goes for not only the so-called “rich,” but also corporations, especially those your party is targeting like oil companies.

You want to cut taxes Ms. Pelosi? Here’s an idea - introduce a flat tax as they have in Russia and some South American nations. There won’t be anymore class warfare in regards to taxes because everyone will pay their proportion. Revenues will rise to the U.S. Treasury, helping to offset and pay the deficit. You on the other hand, will receive all the credit from conservatives for reforming the system and would truly make the United States a better country to live in.

But Ms. Pelosi, you’re a leftist, so you really have no clue how to give the government back to the people. All you care about is increasing your power in Washington and taking more of my money. I can’t wait to vote against your party in 2008.

Captain Ed over at Captain’s Quarters has a great article about how a minimum wage increase this year by Dems will actually hurt the poor and cause inflation. An excerpt:

…They’re distorting a market for a short-term political benefit that will do nothing to raise the standard of living for the people they supposedly want to help. Arbitrarily raising the prices of services and goods in a marketplace causes inflation, not an increase in real value. They’re forcing consumers of labor to pay more for the same service, from which they will get no increased benefit — and that means that they will have to pass the costs along to the consumers of their goods and services, all through the distribution chain.

Whose money is getting given away? Yours and mine, and all 479,000 minimum-wage workers, that’s who. i can absorb the incremental loss of buying power, but the people at the bottom rungs cannot. If they’re lucky, all that will happen is that their buying power will remain the same as it was after a short period of adjustment. More likely, some of their jobs will get eliminated as businesses have to support the cost increase in some other fashion than price hikes.

Captain Ed is awesomely correct in his assessment of possible results driven by a minimum wage increase. It’s an all too familiar example of why government needs to get out of the economy and how Americans need to get informed about their government.

Related: Say “No!” To Dems’ Agenda