Things....

I was just reading this over at Doug Ross....

It's an idea that certainly makes sense and, if it could somehow be put into place, would make the Democrats in Congress squirm.  I have to admit that watching them squirm would make me very happy.  To force them to dismantle some of the "give away" plans that they have put in place would be sweet....

But....

Somehow our national thought process always gravitates toward how horrible and restricting our debt is.  We wring our hands and pace the room wondering how we'll ever get it under control.  We lose sleep at night worrying about the fact that our children and their children will be saddled with this debt forever....  

We are constantly bombarded with gloom and doom regarding the debt from the media.

The only solution that our government proposes is increased taxation. 

The answer is not going to be found in greater taxation and restriction of our rights. 

Being more productive is the only viable solution to our financial woes.

 I lay no claim to being an economist.  Common sense tells me that the government has placed so many restrictions on business that business can no longer be profitable. 

The solution to our suffocating debt is not to be found in taxing America to her knees, but rather in America shaking off the chains of government regulation and becoming productive again. 

Government has done its part to kill American business through regulation and restriction.  The cost of compliance prevents many people with great ideas from ever getting a business off the ground.  The cost of compliance with government regulations in established businesses can be crippling.  These are the by-products of Liberalism and they prevent businesses from being profitable.  Profit is a dirty word to a Liberal.   

Many will lament the number of "good Americans jobs" that have gone overseas and will blame Bush and Reagan, along with any other Republican they can think of, for these losses. 

It wasn't Bush and Reagan that caused these jobs to disappear.  It's the Loony Lefties who have demanded the increased regulation that has caused the cost of manufacturing to skyrocket.

Unions that have demanded more and more from companies will have to admit that they share the blame in the destruction of our economy.  The result of union greed is companies sending the manufacture of their products overseas.  The unions have forced companies to cut costs in order for the companies to survive.  Labor is the most expensive component of the manufacturing process.  That's why we build our washers and driers (as well as the majority of the durable goods that we use) in China and other places where the cost of labor is lower.

I remember reading a story several years ago about a major American athletic shoe manufacturer.  This young start up company had moved the manufacture of their shoes to a Central American country rather than paying union labor to make their shoes.  This created a big stink with the Left Coast wackos.  The company defended itself by explaining that the cost of manufacturing in America was too great due to excessive government regulation and the high cost of labor.  The Lefties rebuttal was to try to smear the company by saying that they were only paying their Central American laborers a dollar and a half a day to manufacture these shoes and that the working conditions were deplorable and amounted to slave labor.  They "knew" that their audience was stupid and that they would refuse to buy the product because of these "human rights" violations.  Turns out that the dollar and a half a day that this company was paying it's workers was a half dollar a day higher than the going rate for that local economy and the facility was the most modern in the area.  In my opinion, that was just smart business.  If they had paid an American union worker $20 an hour to do the tasks required in the manufacture of their shoes they wouldn't have sold because they would have been even more prohibitively expensive than they already were.   Or, more likely, Nike wouldn't have succeeded as a business at all.  It's all about creating profit in order to turn those monies back into the business to make it grow and flourish. 

My younger brother works at John Deere.  Deere went through the process of creating a 2 tier wage system several years ago and then hired new manufacturing labor for the first time in 15 years.  Most of the "old guys" that were making $40/hr (plus benefits) to do the unskilled labor required in the manufacture of a tractor are gone.  The "new guys" make about half as much as their predecessors and are on a different benefit plan.  A benefit plan that requires co-pays and such when you see a doctor.  A plan similar to what most working people have.  They are still represented by the UAW. 

The point is that Deere was running at a loss for years and couldn't afford to continue to hire at the "old" rate and stay in business.  They didn't hire anyone in production for more than 15 years.  They modernized and automated every facet of the production process that they could.  Now that they have begun hiring again at a lower wage (which is still higher than anyone else in the area) they are turning a profit and growing again.  Their legacy costs, like those of other union stifled manufacturing businesses, are tremendous.  GM and Chrysler come to mind....

Government labor faces the same situation.  They are paid higher than "average" wages, they retire early, and they have better benefit packages than most workers in the private sector.  Also remember that all government employees are paid for by us, the taxpayer.  Another thing to remember about government employees is that they produce nothing.  In business terms, all government employees are an expense.  They add nothing to the bottom line.  In fact, they detract from the bottom line.  Are they needed?  Absolutely, well, some of them are.  The military for sure.  (I'm a huge proponent of a strong, well armed, well trained military.  One of the few good uses of my tax dollars...)  That's fodder for another post :)  Point is that they have tremendous legacy costs also.  And we keep creating more opportunities for government employment.

 Read this article.  It explains legacy costs much better than I ever could.  The last couple of paragraphs defines the situation that the majority of us (non-government employees) fall in.

My point in this post is that increased taxation is not the answer.  Production and corporate profitability is.  You'll never explain that to a Socialist.  They just don't get it.  They want the handout.  They want the life long "safety net".  They are wrong.  Increased profitability leads, by its nature, to increased monies going into the government coffers.  Decreased government spending leads to a lowering of the debt.  Lowering of the debt allows ("in the black") funding of existing commitments.

I didn't want this to be an exercise in bashing Liberals but Liberals got us into this situation.  The obama administration has increased our debt more than any administration in history.  In 2 years.  That, my friends, is a fact.  Spin it any way you want to, blame any previous administration that you want to, make any excuse that you want to, the fact still remains.  obama and his cronies have done more financial damage to this country than any other administration in history.  I don't believe it was an accident.  (we will talk about the divisiveness of obama and his administration in another post....)

Please remember that I am not an economist.  This post is overly simplistic as regards the economy.  That said, I believe that it is a simplistically accurate representation of a capital based economy.

BTW, I took this Civics quiz today.  I got 30 out of 33 correct.  That's like 94% and should be an "A" in anyone's class.   If they graded on the curve it would definitely be an A....  I'm kinda proud of myself!  :)

I should take my wife to breakfast.

Stay safe.