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Wednesday, February 27, 2013

The Politics of Taxes and Spending

US treasury 
Every debate on the issue of wealth and "spending" is political, and not necessarily reflective of the truth. In most cases, politicians don't tell the truth. For instance, when government talk about spending as investment; there's no truth in it - they are talking about raising taxes or taking money you earned through hard labor. Spending on many government programs and welfare recipients don't return any revenue whatsoever. Government spends by taking money from people by way of higher taxes,  but it only temporarily relieves the economy but not in the long term. Why? Because the government takes money from people and spend them on programs that don't generate revenue. So the money it takes from people the government generated or earned.
The money money circulated and at the end of the day, no extra money is created! Instead of earning revenue, it takes from someone and gives it to the other. This is why welfare funds in the US didn't cure poverty but rather exacerbated the welfare state and further enhanced the dependency culture in the in the country. Investment is defined as "the investing of money or capital in order to gain profitable returns, as interest, income, or appreciation in value."(dic.com). In this sense, taxing or taking money that someone earned and giving it to those in welfare - no jobs - is not investment, rather mere spending. Taking money in the name of roads and bridges, schools etc. aren't investments, they are just financial free spending that don't return profits. In this case, the word "investment" is being misused; it is used by politicians in a way it is used in the world of business. 
Why the growth of the economy extremely slow? It is apparent that the government's policies don't prioritize revenue generating activities, and jobs. Nothing in this administration's fiscal policies targeted a speedy recovery of the economic, and it is ironic that the president and the Democrats often wonder why the "drag on". They just don't know why the economy is not growing or recovering faster than expected. Take for instance, the two revenue killing investments that this government had been prioritizing since 2009. They are the environmental sector and scientific research. 
The Environmental Protection Agency (EPA) has killed so many coal factories and refused to grant permission for offshore drilling and other industries that it deems harmful to the environment. This approach killed tens of thousands of jobs across America. Besides, this administration has enforced additional regulations on top of the current EPA regulations making it impossible to generate money in the energy sector. In his first term, the Obama administration dumped $95 billion as investments in solar energies of individuals tied to the Obama campaigns. Many of these solar companies lost their competitive advantage and eventually declared bankrupt. Solar panels and electric cars never returned profits to the government, they closed their doors earlier than anticipated. 
And just when this administration puts money into scientific research, it also imposes nail-biting taxes on medical technology - equipment, essentially slowing down the production of medical devices across America. Soon, hospitals will buy theirs from China, perhaps defected ones. 
So when you hear politicians talk about investment, note that this is not real investment as you know it, it is just a code-name for increase taxes - stealing your money!
Taxes is one of the ways our government steals money from poor citizens. While this administration promised transparency and zero hike in middle-class family incomes, they burden them by taxing little items such as smoke, beer, gas, foods, public transport, light-bulbs etc. In the end, the middle-class shoulders the larger portion of the tax revenues. When passing the Obamacare, the president promised that middle-class families wouldn't see any increase their current tax rates - "Not a single dime" according to Obama. Surprisingly, families are now paying a couple of thousands of dollars in taxes. Why's the increase? Because politicians lied to take more money from your paycheck this way. 

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