the Air Vent

Because the world needs another opinion

Ignorance Gone Wild

Posted by Jeff Id on January 6, 2019

We are told again and again that cutting taxes increases the deficit.  It’s so bad that people have invented stupid programs like the penny plan (which Hannity really promotes) and paygo which used to be Republican and now is being pushed by the Democrats.  I’ve long maintained that these are terrible ideas – because we are on the down slope of the Laffer curve. Taxation is so high, that less taxation results in more economy and more revenue for the government.  Smart liberals know this but they are authoritarians by nature and realize that more tax is inversely proportional to freedom (less freedom) and proportional to dependence on the federal government for services.  So Paygo by its nature completely ignores this situation as do the rules of the ‘non partisan’ CBO.

From Bloomberg.

In total, CBO projects that the cumulative increase in the deficit through 2028 due to the tax cuts will be approximately $1.9 trillion.

Paul Krugman – Literally the fakest economist I’ve read who also happens to be a prime government authoritarian darling wrote this

Later that day the joint committee delivered its predictable verdict: Like all other reasonable studies, its review found that the Senate bill would do little for U.S. economic growth, while directly hurting tens of millions of middle-class Americans, blowing up the deficit, lavishing benefits on the wealthy and opening up new frontiers for tax avoidance

and this:

Just about every G.O.P. member of Congress, including the sainted John McCain, is willing to put partisan loyalty above principle, voting for what they have to know is terrible and irresponsible legislation.

and this:

It was remarkable, for example, to see a group of Republican-leaning economists with serious professional credentials put out an open letter clearly intended to lend aid and comfort to Mnuchinesque promises of miraculous growth.

Pelosi said this:

simply theft—monumental, brazen theft—from the American middle-class and from every person who aspires to reach it.

The genius Schumer said –

cynical one-two gut punch to the middle class—raise their taxes to pay for corporate tax cuts & then decimate their earned benefits as a kicker.

Of course they were just lying like they so often do.  Lying is a word used inaccurately far to often in the political spectrum, when I use it I mean telling a non-truth that is known at the time to be a non-truth.   They knew damned good and well that the tax changes were significant cuts. And even though America figured out that the cuts worked, these central government authoritarians have repeatedly stated that they still want to undo the cuts as soon as they get power.

So we went against Krugmans authoritarian government-knows-best vision and lowered taxes in 2018 – and  the economy boomed and federal government got more revenue including significantly more from income taxes.

 

Increased revenue from INCOME TAX due to a cut in income tax rate!!

Increased overall revenue

Highest wage growth in years.

Lowest unemployment in numerous categories

Massive economic growth

Huge holiday spending

Big job creation

Manufacturing growth – this is very critical to a successful country!

#1 energy producer in the world

Looks like business owners actually know economics.  Huh…..who would a thunk it.

I’ve generally been forced to move on from blogging.   It is a lot of work running a now-large company and we used the cuts to invest massively in new injection molding equipment right here in the US, which we can now write off and will add numerous highly skilled people for decades to come.  I’ve written before that our effective tax rate was over 80% because nothing is considered an expense.  It isn’t that much better now but it was enough to allow the investment into American business and treat a massive expense as an actual expense – which it is!  State taxes and inventory are still not considered expenses despite the massive check writing but equipment at least is.   In addition to the advantages from tax cuts, we are forced into paying people more and having to compete harder to keep good workers.  The effect is non-trivial and has showed up in jobs growth numbers, wage numbers and even spending numbers. Investment is high, growth is high, imagine where we will be if this were to continue on Trump’s very positive path for another 6 years.  He gets 100% of the credit for this at this point. So much resistance from the authoritarian swamp including his own party.   It’s huge folks, it’s real, and if you are finding yourself in disagreement, you need to do some serious reading or perhaps not vote, because you are flat effing wrong! 

Like climate change, the evidence is directly in front of you, it is up to you to be smart enough to read it.

Unfortunately, the pro-government authoritarian left has taken over education at all levels and are pushing socialism in its most evil forms.  The federalist papers and the constitution have nothing to do with socialism.  In fact, there is no room in the American constitution for socialism under any interpretation and the judicial branch should strike much of it down as unconstitutional.  The result however, has been extra-constitutional departments and regulations which have no true foundation in law, approved by socialist activist judges who at best are fake and in far too many cases literally operate above the law with no effective method of censure.  In the US,  one of the three branches of government is more equal than others.

I see no end to it though, in recent news, we watch the authoritarian left promote more anti-constitutional socialism at every turn, and it drives a great fear into my heart to see such stupidity taking over the now completely socialist Democrat party.  Democrats used to at least have the appearance of rational thought, or consideration of the constitution, although many of us could see them clearly through the fog of politics just fine. Now the inability of voters to comprehend what will come of their authoritarian government-first policies is absolutely terrifying.  I’m afraid for my regularly indoctrinated children, because this socialist ignorance is preached to them in school as though it is unquestioned knowledge on a daily basis.  My wife and I can probably save their minds, but other parents are helpless in the face of the onslaught. As a contemporary example, 29 year old Cortez literally doesn’t know anything about economics and she supposedly has a degree in it.  Her life experience in economics is limited to keeping her tips off the books and out of her co-workers hands but as an un-spanked millennial, she will not even listen to counter-arguments on the matter.  She already knows all, and that is the big Democrat socialist visionary who is going to lead the country to 70% federal taxation (of business too) and no fossil fuel.  Given the power to enact these plans, she would close us down overnight and some at least equally ignorant voters gave her a lot of power!!

She’s just a truly dumb person and her equally dumb self-confidence in the face of her ignorance cannot be cured.

According to the demonstrably fake socialist economic models, the way for the federal government to pay for something is HIGHER taxes, but we’ve just seen the opposite, lower taxes gave MORE revenue.  So if paygo were in effect, when we enact a new big unconstitutional program like the Department of Education, we must then fund it with increased taxes. So in our current over-regulated and over-taxed situation, when you raise taxes, you have less money in your personal pocket (less freedom), the government has less money in their pocket from you (bigger deficit), and then you will need more money printed by the government to save the people who fall off the bottom end, which will require more taxes to pay for it!!!  Pure genius orchestrated and voted for by an ignorant population and their authoritarian masters who are very happy with the most ignorant and financially needy constituents possible. I’ve heard rumors that the masters will even import the least educated of them en-masse and hand them free money — can’t be true though right?

We need to return to the constitution of this country in order to save America.  I don’t see it happening any time soon, so while my crystal ball doesn’t work any better than Krugman’s, the kids will likely starve in the socialist truly anti-American future.  In the meantime, lets enjoy the success of a tiny bit of sanity introduced by our orange leader Donald Trump who has turned out to be a much better president than I had ever imagined he would. To his so-scientific detractors, we all need to change our ideas in the face of data, and the data shows he was right (and BTW so was I so many times on this exact blog), tax cuts and regulation reduction did lead to success at every level, and the Krugman ilk’s twisted-socialist and completely fake economic models were wrong.

 

 

 

 

 

 

 

 


19 Responses to “Ignorance Gone Wild”

  1. George O'Har said

    Jeff,

    Nice to hear your calm and cogent voice again.

    Speaking of unspanked, I got into a slight verbal twist with the college student daughter of a relative Christmas Eve. She’s majoring in some worthless music program that is supposed to get her a job in A&R down the road. “Debate” may have gone south when I said I see music in hierarchical terms. There’s pop, etc., then there are geniuses like Beethoven. She’s white, but big into rap. She dismissed Beethoven as “white privilege,” and “dead white man.” She’s learned this at a top college for which her father is paying $70K per annum.

    I didn’t want to argue the point any further. So as we all got up from the table, she burst into tears. This caused big huddle among her family (4; college-age son, worse than her, was going on about “reparations” and “slavery”; father must make close to a million a year as a lawyer). They storm out of gathering. I’m the bad guy. I’m also mad. Another friendship crushed on the rocks of the mental institution that passes today for higher education.

    As much as I blame the professors, many of whom are no more witted than Cortez, I blame, increasingly, America’s witless, wealthy parents, who give tacit if not explicit approval via their checkbooks to the rot their kids learn in school (K through post-doc). They could put a stop to it tomorrow by demanding this nonsense stops. I can’t tell if they don’t see the danger, are stupid and or ignorant in ways that seem hard to fathom, or think it won’t ever affect them.

    My fear today is that the left has won. All we have is irascible Trump. Can one man stop the machine? He’s trying, yes, and at times he shoots himself in the foot or the head. In short, I see nothing on the horizon that prompts me to think the left will lose. Look at the Steele dossier.

    Everyone I know in NY thinks it’s true. These are educated people.

    But I repeat myself.

    Happy new year!

    George O’Har

    • Jeff Id said

      I’m sorry to hear about the family problems. I’ve heard anecdotally about these things happening and it’s a real shame they can’t even hear another view point. And a proper view point at that. They’ve stuffed these kids heads so full of irrational nonsense there is no room for rational thought. Especially thought that doesn’t support the conclusions they’ve been spoon fed.

  2. Serioso said

    Perhaps you should read the New York Times for an alternative version of the truth!

    • Jeff id said

      um:…. the nyt is definitely an alternate truth. I linked my data source, can’t find theirs.

      Can you find it?

      Btw, nobody expected 18 to have bigger revenue- even me! I just understand the impact on Business these rules have. I see the massive spending on infrastructure, I see the higher wages, the bigger orders. I do believe it is a huge wave- if Tariffs are dropped – duck and cover for the economic boom that follows.

    • Jeff Id said

      At this point, I assume you weren’t able to find any reference to data either. I have found other sources myself which confirm that this NYT article is actually fake news — again!! AND my article is correct. I don’t know why anyone would get their news from sources like CNN, MSNBC, Twitter, Facebook, PBS, Huffington post etc…. They are lying so often now that you have to be brain dead to miss it. If you find the data, let me know but my source linked to the actual fiscal year data from the US government.

      • Matthew W said

        First of all, the abject idiocy of “tax cuts paying for themselves” as if all monies belong to the government and they allow us to have some.
        Don’t even deal with that kind of economic stupid.

        • Jeff id said

          I agree, the goal shouldn’t be maximum federal income but the high taxation rates are driven by hose who think they will get more. It’s really a fight for economic freedom and at high net tax rates has the opposite relationship with federal income to what they state.

  3. Pouncer said

    “State taxes and inventory are still not considered expenses ”

    There I don’t blame the government per se, but the culture and profession of accounting.

    I served a term on the local school board after investigating, publicizing, and eventually proving via state audit several financial — let me be very careful in choosing this noun — shenanigans arranged by officials among the top administrative ranks.

    While I served the state appointed a “conservator” to monitor. We were operating on a shoe string and the “fund balance” for a 50 to 70 million dollar per year district was on the order of few hundred dollars.

    Come to find out — several months later — the “funds” included the value of inventory. Food in the freezer. Copy paper in school room closets. A partial tank of vehicle fuel in the maintenance yard … We’d spent cash money out of cash (asset) funds to buy this stuff, then booked the stuff at full retail value into an asset column in our journals. Our new internal CFO, the conservator, and our trainer from state board association all assured me this was the correct way to do things … Several months after that, we “rotated the stock” in the freezer, wound up throwing expired food away, and finally had to show an “expense”.

    The district survived … but we had been operating on a misunderstanding or miscommunication about what sort of cash flow and reserve we’d held. The administration NEVER explicitly advised the board responsible to set priorities and make policy about how thin and ill-liquid our resources were. And we undoubtedly made sub-optimal decisions in consequence.

    I agree with the general idea that good in storage are assets but having accountants book the asset value at full retail is just crazy. For a business to be TAXED on that value (in jurisdictions that do so) is crazier still.

    • Jeff Id said

      Pouncer,

      These extra ‘profits’ only come into effect when you reach a certain size. It used to be 5 million in sales for accrual accounting which then hits inventory. The tax cut increased that number to 25 million which didn’t help us but is a huge boost for smaller business. When your profits get higher, the state tax comes into play. So basically, the IRS knows very well what they are doing, although our congressman pretended he didn’t know about it when I met with him face to face. Complete bullshit IMHO. If anyone asks where manufacturing went, it is hidden policies like these that killed it in the US. Until you become very successful, you don’t even know they exist.

  4. Matthew W said

    Since the end of the Roosevelt Great Depression, the Treasury Dept collects around 17% of GDP regardless of tax rates:

    https://fred.stlouisfed.org/series/FYFRGDA188S

    Curious

    • Jeff id said

      The total percentage doesn’t shift much does it!! There are numerous complex problems with the data. For instance, in the late 50’s when tax rates were “high” you were allowed to take expenses which were not considered income. Not so true in the obama years.

      The data you have isn’t clean whatsoever. Not that the premise of less sensitivity is wrong. We have seen absolute proof that reduction of tax has led to an economic boom. Even if someone finds data to prove my data source is wrong (I doubt it very much) coming years will overcome the difference barring any extreme new shenanigans from congress.

      The proof is right there to se.

      • Matthew W said

        The dirty little secret is that during the 50’s when rates were 90%, the effective rates were actually about 31%, not to far from today’s 28%. When tax rates are high, the government gets the same amount of revenue but accountants get rich !!!!

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