Robert Reich’s recent video where he tries to expose the seven biggest lies about the economy only exposes the fact that he’s a better artist than economist. In response to that video, I offer the following:
#1: Reagan cut the rates, which sparked the biggest economic expansion in decades. The rates were higher before, but you’d be hard pressed to find anyone who paid them anyway. Rates were brought down, loopholes closed, and the code simplified. All to great effect.
#2: See #1. It may or may not hurt the economy, but the rich pay most of their taxes on capital. Raise income rates, and more income gets shifted to capital or to markets overseas. Fact.
#3: Yes. It’s an irrefutable fact that wealth that gets poured into the tax code comes out measurably smaller on the other end. Therefore by extension, a larger government intrusion into the economy creates a drag upon it. Otherwise, why do governments choose to free up markets whenever they finally seek to spark economic growth? FACT. Smaller government means less government workers (i.e. bureaucrats creating nothing), and that allows more capital to flow to where it can be utilized the best.
#4: No, the long-term goal is to live within your means. That goes for people, families, companies, and yes, governments. You only have to look to Europe right now to see which countries are teetering and which ones are rushing to support them. Germany: solid monetary policy. Greece: Spending money on government services like its going out of style. And now threatening to take down the whole world economy. We’ve thrown away over $1 TRILLION in stimulus, and we still have over 9% unemployment. Please, Robert. Pick up a paper and read it sometime.
#5: Health care costs are rising for a number of reasons, one of which is too much government regulation of the industry. Of course, the insurers like the regulations because they use them as a crutch to keep prices high. The LAST thing they want is real competition.
#6: I hate to admit that anything that Perry says is true, but he’s essentially correct on this one. And what Reich is suggesting will only add fuel to the fire. SS depends upon a larger and larger pool of income from a shrinking source to support ever expanding costs. After we tax the rich to add to this and then we still go over budget, then what? Let’s just cut our losses now. Anyone who thinks that SS is going to be there for them in 20 years should start sending wish lists to the North Pole.
#7: Okay, I’ll agree with him on this one. So, let’s make it really fair and institute a flat tax of 25% on everyone who makes more than $50,000 a year with NO deductions. No deductions means less ability for special interests to game the tax code to their favor. This creates more transparency in the process, which is fairer for us all. Tally up how much you make and send in a quarter of it to the government. End of story. Services get paid for. Tax day is much less stressful.