Government Economics 101

Today, class, we're going to cover a few of the basics of understanding government meddling in the economy. Our three topics will be taxes, spending, and the money supply. Eyes front, and Jimmy, keep your hands to yourself!

TAXES
1. Taxes are the enemy of economic growth.
2. Taxation is the process by which productive members within an economy are required to provide funding to non-productive members in an economy.
3. Taxes are on "profits" or funds that would have gone into development of new ideas, hiring of new employees, purchasing of new capital equipment, or investing in other ventures.
4. The higher the taxes, the higher the underemployment and unemployment rates as companies attempt to do more with less.
5. Tax money is wasted because it is money removed from the market to provide services for which people would not willingly pay.

SPENDING
1. Government spending does not spur economic growth. It creates the illusion of economic growth as it pumps either directly taxed dollars, or newly fabricated dollars into the economy.
2. Government expenditures regularly outpace returns, hence more dollars are manufactured, direct taxes are raised, or both.
3. Government projects are simply wealth redistribution programs. The contractor on a highway project is no more a creator of wealth than the welfare recipient.
4. The idea that a broken window due to vandalism creates economic momentum is sophomoric, because money that would have been spent in the market on another product, must go instead to replace something for which there was no prior requirement for replacement. By that measure, the destruction of war does not improve an economy, it weakens it.

MONETARY POLICY
1. A subjective standard for currency backing cannot defeat inflation. It is the ally of inflation.
2. The purpose of a central fiat bank is to allow for "elasticity" of the money supply. Elasticity equals inflation.
3. As a "need" emerges, the Federal Reserve begins Xeroxing more money, or coding more bits and bytes into bank accounts, buying government bonds to cover government checks.
4. The initial recipients of the new money benefit from enhanced spending power and, if wise, proceed to spend while the value is still reflecting the old dollar to goods ratio.
5. As the freshly photocopied dollars flood into the marketplace there are more dollars chasing fewer goods - the textbook definition of inflation.
6. Even in cases where the "price" of items remains steady, it is still inflation; the market is simply capable of outrunning (typically over short distances) the proliferation of fiat currency.

IN THE END
The solution isn't a "Fair" tax, regardless of its aim and rate. The solution is the eradication of government spending, thus eliminating the "need" for income or profit taxes, and stopping the Federal Reserve and its Parker Bros. operation.

--M.A. Hargett