Sunday, December 21, 2008


Hello America,
Our subject tonight is one you likely know well. Politics. This, of course, comes from the greek "poly", which means many, and "ticks", which are bloodsucking parasites. We recently hired (elected) another group of ticks to hopefully not suck all the "blood" from our wallets.

I wonder how many citizens actually approach their vote as being one to "hire" an official to perform a duty. I see few other ways to view this act. However, there is one logical reason that a citizen would not have this perspective. When you engage the services of someone, whether it be a contractor or an employee, you have to investigate the qualifications of that person and pay for their services. You must satisfy yourself that the task you ask them to perform will be accomplished and that the price you pay is commensurate with the value you receive. This is a principle of a free market and a free people.

How does this explain a citizen's view on an election? Well, if an individual pays no price for one's services, there is no cost to them if they do not fulfill their responsibility. The argument can be made that everyone incurs a cost when public officials do not fulfill their responsibilities and I can't disagree. However, it has been proven time and time again that humans predominantly act in their own self-interest. Therefore, the price most people pay for politician's services is taxes. If one were to pay no taxes, what immediate cost do they bear for electing one person over another? None.

Some of you may be surprised (hopefully not) to learn that approximately 40% of Americans pay no income tax at all. How then, I implore you, does one extend a "tax break" to 95% of all Americans? This is accomplished by wealth redistribution. In other words, stealing from Peter to pay Paul. To extend the logic above, this would result in pretty solid support from Paul, wouldn't it?

In my profession, I have to keep up on political happenings as it directly effects the services I provide my clients. It is not uncommon for people to spend a great deal of time and energy trying to avoid taxes. These people are usually very productive people...likely the most productive people. These are type of people that provide jobs, innovate products, and give to charity.

Why should we give people incentive to engage in activities that are clearly non-productive (i.e. tax avoidance)? I have heard alot in this election cycle about "fairness." In the tax code, what would be more fair? To illustrate this, let's look at two people who benefit from the same national defense, the same judicial system, the same law enforcement, and the same public infrustructure. One spends $10,000 a year to hire professionals to ensure they are in compliance with the many laws and regulations our society has, but does not actively use the court system, and the other is in and out of the judicial system due to breaking many laws and regulations and defended by a state appointed attorney. It would seem reasonable that the latter person would be responsible for a greater share of taxes (the cost of public resources) than the former. However, I am sure you can all recognize that would not be the case.

Now the government has decided that they should loan money to the domestic automakers. Why? The biggest reason I have heard is that they are "too big to fail." This is as weak an argument as might exist. The other one I have heard is that "we bailed out the banks, why not the automakers?" I guess when you make one stupid decision, you may as well continue making stupid decisions because you have a track record.

Why is Detroit in this predicament? To be very simple, they are not making a profit. If my business was failing, I would certainly like someone to loan me money to continue to lose money and pay my bills as I produced my product at a cost higher than that which I could sell it. However, no one in their right mind would do this.

Of course, the government isn't lending their money. They are lending OUR money. Ponder this for a moment...there are 300 million people in the country...the loan to GM is almost 10 billion...So...each american just loaned GM $33. Except over 40% of americans don't pay income taxes. So those that do pay taxes each just loaned GM $55. This is on top of the types of services we NEED to pay for that I mentioned above.

Needless to say, I have read reports from economic experts who put the amount GM would need to actually retool and become profitable at 75 to 125 billion! Do the math...that is up to over $5,000 per taxpayer. Is this really a good idea?

Oh, and since Congress has done such a good job for us...they get a $4,600 raise too. Honestly, I'm not sure how to make this right as there is no simple answer, but shouldn't we at least not give money away to failing businesses.

If GM entered bankruptcy, their assets would not disappear. The buildings and machinery they own would not disappear. They would be purchased by someone who could use them and make a profit. The workers employed by GM would likely be hired by whomever purchased these plants OR they could find training for an occupation that does not need government subsidy to survive.

I suppose I could go on and on about this as the issue has multiple sides and is a terribly dynamic issue. However, businesses fail and are started every day. Jobs are destroyed and created every day. Allowing the Big three automakers to meet their demise, or at least enter bankruptcy, is the only efficient way to allow the companies to become competitive and profitable, if it is possible. American taxpayers are on the hook for enough debt already through the essential and (more troubling) careless spending of government. We do not need to add to that debt.


Sarah said...

Preach it, brother!

Bo said...

Tony, I'm with ya.

There is a website ( that allows one to engage in a sort of back and forth about all things worth talking about. If you're interested, check it out.