One of the most prolific writers of our time is economist Thomas Sowell. Sowell can take the complex and make it understandable through his writings. Recently, he wrote an article for the Hoover Institute that shows how history is being ignored with the present economic crisis in the USA. The article was entitled “Big Lies in Politics.”
His premise in “Big Lies in Politics” is this, “Among the biggest lies of the welfare states on both sides of the Atlantic is the notion that the government can supply the people with things they want but cannot afford. Since the government gets its resources from the people, if the people as a whole cannot afford something, neither can the government.”
Sowell pointed out that history shows that taxing the rich to pay for government programs doesn’t work. From 1916, the year of the Income Tax Amendment, to 1921 the number of rich in the US fell from over a thousand to around three hundred. Why? They moved their money into tax-exempted securities. That was decades ago but today it would be different. No way!
In 2010 the British employed the Obama strategy of taxing the top income earners and lo and behold they collected less tax revenue than before. Yes, collected less revenue because they invested their money in nations where the tax rates were lower. It has happened in other nations also.
“Nothing is easier for a politician than promising government benefits that cannot be delivered” wrote Sowell. He pointed out that the day of reckoning is in the future so the politicians can make false promises because they will be out of office and blame their mistakes on the politicians who follow them.
He envisions that one way they will attempt to solve the fiscal crisis in the future will be by printing more money. Inflation! Inflation is when there is a general rise in prices and it takes more of a person’s income to purchase the goods and services they need. It eats away at savings because everything costs more. It creates a bigger gap between the rich and the poor.
No wonder our present politicians receive low ratings from the public. They know they will not be in office when the financial crisis erupts and so can deny being responsible. No wonder they make promises they cannot sustain