Saturday, August 9, 2014

Paul Krugman finally catches up to me

Inequality is a drag

And this, in turn, implies that redistribution — that is, taxing the rich and helping the poor — may well raise, not lower, the economy’s growth rate.
Apparently, the leading economic minds of the day are beginning to grasp the fact that Ronald Reagan sold us all a lie. Voodoo economics, it turns out, really is just voodoo. All this nonsense about the Laffer curve really is just laughable. Everything the ordinary citizen of the last two decades thinks about the economy is simply bunk. All lowering taxes does is make everyone poorer.

The secret to a healthy economy is high taxes. The reason is as simple as it is obvious. What makes an economy grow? DEMAND. Nobody builds a factory because they have a lot of money; they build a factory because the one they have isn't making enough stuff. And what drives demand? SPENDING. You have to spend to create demand. And what do governments do with all the money they collect in taxes? THEY SPEND IT.

This is so mind-numbingly simple as to defy explanation. How could those Austrians have been so wrong, but more to the point, how can the educated population of the world not see how wrong they are? For over 30 years the economies of the world have been driven by this idiotic inversion of basic truth, and the result is massive injustice, financial panics, and crumbling infrastructure.

Taking money from people who have it and then spending it makes the economy go. If you can't understand this, you're probably the kind of person who can't understand why fiat currency is better than a gold standard. Taxes are in fact why the world has progressed past subsistence farming.

If you think that rich people deserve their money, because they made it all by themselves without any help from anyone else, then just consider taxes as the price we charge for calculus. You want to avoid taxes? Fine, make your money without calculus, or logic, or democracy, or literacy, or fire, or any of the rest of the heritage of civilization and knowledge that you inherited for free.

This reminds me of an old joke, ironically a Christian one, which makes it even stranger that the people who often tell this joke don't see how it applies to their own economic prejudices:

God was once approached by a scientist who said, “Listen God, we’ve decided we don’t need you anymore. These days we can clone people, transplant organs and do all sorts of things that used to be considered miraculous.”

God replied, “Don’t need me huh? How about we put your theory to the test. Why don’t we have a competition to see who can make a human being, say, a male human being.”

The scientist agrees, so God declares they should do it like he did in the good old days when he created Adam.

“Fine” says the scientist as he bends down to scoop up a handful of dirt.

“Whoa!” says God, shaking his head in disapproval. “Not so fast. You get your own dirt.”

Stories that bring sermons to life

Is it wrong of me to tell Libertarians - get your own math?

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