Math-challenged Stateopians – III

Liberal /Lefties (let’s call them “Stateopians”) like to say that government “creates jobs”. They’re right. It does…the wrong kinds of jobs. What’s wrong with government jobs? They don’t make profits.  A new DMV worker or TSA groper does not create value, as measured by profits. Quite the opposite, they bleed resources away from those that generate profits. This is bad.

This is where conservatives and Stateopians talk past each other. When conservatives speak of creating jobs, they speak of jobs that create added value (i.e., profits). To math-challenged Stateopians, however, profits are bad.

So let me try to keep this simple.

Government spending comes from taxes. Most tax revenues are generated from profits, including corporate profits and, on a personal level, disposable income (i.e., “golden eggs”).

Other tax revenues are generated from assets, such as real estate, savings and inheritances (i.e., the geese that lay the golden eggs). If you increase taxes on assets, you starve the geese that lay the golden eggs. This means less golden eggs and fewer tax revenues. Eventually, the geese die of starvation.

On the other hand, if you feed the geese that lay the golden eggs by, for example, reduce the taxes paid against assets, they lay more golden eggs (i.e., profits), which increases tax revenues. More profits, more tax revenues. Reagan understood this.

This is where Stateopian ideas are truly math challenged: if you really want to increase and pay for government spending, you need to increase the ability of the economy to generate profits. Profits are good! The more the better. Instead of encouraging profit-making, they bad-mouth and discourage profit generation.

How come they can’t understand something so basic?

So, next time you hear a Stateopians bad-mouth corporate and personal profits, ask them, “where the heck do you think your government gets its money?”

I’ll bet they never thought of that.