I sense much fear in you.

"Fear leads to anger, anger leads to hate, hate leads to suffering.  I sense much fear in you."

There are many sources of fear.  However, it usually boils down to the fear of being able to influence a situation is such a way as to make it turn out favorably for ones self.  This could be true of losing a job (how am I going to support myself), being chased by a tiger (how am I going to survive), wetting pants in school (how am I going to live with the embarrassment) or failing a test (how am I going to explain the failure to my parents, how am I going to get into college, how will I live with the negative perceptions of my teacher and friends). 

If you really believed you could turn the situation around for yourself favorably, you wouldn't be afraid.  To use the above examples, if you had a new job lined up that paid more, if there was a cage around the tiger, if no one saw you, you were in the bathroom alone and you had a spare pair of pants to change into, or if you knew that the test wasn't going to be graded, or that you knew the questions ahead of time and knew the answers would you be afraid?

Fear comes from the belief that you don't have the ability to act in such a way as to make the situation acceptable. 

There is plenty in this world to be afraid of.  Unemployment is 9% nationally.  Underemployment is around 18.5%.  The national debt just surpassed 15 trillion dollars.  The price of gas is high.  Hole in the ozone layer/global cooling/global warming/global climate change is going to irradiate, melt or freeze the earth.  Big banks/oil/retailers/anyone are making a lot of money (which must mean they are big, powerful, evil people).  The costs of healthcare are increasing dramatically.  Nuclear waste might pollute something.  The plastic water bottle you used today won't ever decompose.  Racism didn't end with the election of the first African-American president.  Muslim extremists are going to blow up something else.  Iran is going to nuke anyone they can.  China is going to own the rest of the world.  Europe's debt crisis is going to make the rest of the world implode.  The zombie apocalypse is just around the corner.  The Mayans predicted the world's end in 2012. Playgrounds don't have 5" of shredded rubber tires under the swings.  Our kids aren't wrapped in bubble wrap.  Guns might shoot me.  Knives might cut me.  And on and on and on.

However, fear leads to anger, anger leads to hate, hate leads to suffering.  I'll pick one example from the list above and illustrate.

If I am afraid that I might get shot by a gun, I would want to do everything I could to limit the number of guns around me.  So, I would be opposed to a "shall issue" concealed carry law.  I would view anyone who was for a "shall issue" concealed carry law as someone who was personally contributing to my potential danger.  I would view the "extreme" groups who supported the law as a group of people that cared more about their desire to have what they wanted, in spite of the danger posed to me.  If I thought a group of people were actively trying to expose me to more danger, I would hate them.  I would view their actions as a personal attack on my health and well-being.  That would cause me to actively seek to stop them.  If I had a strong belief that I would die as a result of their support of the law, I might even perform some extra-legal actions to try to stop them, with the reasoning that to save my life (and who knows how many other lives) extra-legal actions would be justified. 

Fear leads to anger, anger leads to hate, hate leads to suffering.

The biggest problem with my example is that, statistically, it has been proven that, in that situation, people are safer with a "shall issue" concealed carry law.  And there lies the biggest problem.

Fear doesn't have to be based upon fact.

And now we get to the reason I wanted to talk about this quote and fear.  If you look at many of the important issues of our day, you typically get at least one side that is based upon fear. Unfortunately, many of these issues are being clouded by fear.

In the 70's it was environmental damage.  In the 80's it was the hole in the ozone layer.  In the 90's it was global warming.  In the 00's it was global climate change.  I can't wait to see what it morphs into in the 10's.  However, the major focus is on the fear that man's progress is somehow ruining the world.

The cost of healthcare is increasing dramatically.  It was easy to see this coming.  There was a clear imbalance between power and responsibility.  Companies began offering health insurance as a perk.  Insurance companies covered most services.  Government, over the years, mandated that even more things be covered (wellness, birth control, etc.)  The consumer had no financial incentive to make fiscally responsible choices regarding his healthcare.  Costs increased.  Eventually, a crisis point is reached.  The fear is that I will get sick (truly ill) and not be able to be made well.



When you view situations in the future, examine whether one or many sides of the debate are acting out of fear.  Then, try to discern whether or not their fear is justified.  If it is not, run the other direction from their views.

For example, I have taken a look at the CCW, global warming, fear of the "rich", fear of losing a job/giving children a bad education and evil big oil arguments. 

http://gung-ho-man.blogspot.com/2011/07/global-warming.html

http://gung-ho-man.blogspot.com/2011/07/true-answer-in-battle-of-ideas.html

http://gung-ho-man.blogspot.com/2011/08/tax-rich.html

http://gung-ho-man.blogspot.com/2011/07/school-funding-in-michigan.html

http://gung-ho-man.blogspot.com/2011/07/evil-big-oil.html

In retrospect, it is amazing how many of the issues of our day are shaped by fear. 

Be good critical thinkers...and check your fear at the door. 

Fear leads to anger, anger leads to hate, hate leads to suffering.

Aloha.

Tax us!

Tax us!

I have heard this from two different sources recently, so I wanted to talk about it.

What does it mean when someone says "Tax us!"?  And why don't they say "Tax me!"?

I believe words have significance and are very important.  This case is no exception.

If I were to go out and say "Tax me!" I should be laughed at.  If I want to give more money to the government, I could.  Now, I know that there was some discussion (and even a bill) about making sure it was law that wealthy people could give as much as they wanted to the federal government.  However, based upon the research I have done, (and this website from the federal government http://www.fms.treas.gov/faq/moretopics_gifts.html ) anyone can give to the federal government anytime they want (and has been able to since 1843).

If I want to give money to the government, I can.  There is no reason to say "Tax me!" as that is like saying "Please force me to give you money, when I already want to give you money and you have specifically already set up a way for me to give you money if I want to."  Again, a laughable proposition.

So, why the "us" instead of the "me"?

There can be a couple of reasons why someone would use us instead of me.  One reason is that the person speaking is representing the group.  This is clearly as laughable as tax me.  If everyone in the group of "us" wanted to be taxed more, then everyone in the group could simply act as "me"s and donate more to the government.  So, clearly that is not the reason.

In this case, the reason they say "us" is because they are trying to group a bunch of people together.  What they are trying to say is "Tax all of my group".  What they are implying is "Tax all of my group...some of whom don't want to be taxed."  And, since desire to be taxed is implied in the request, it could be restated as "Tax all of those in my group who don't want to be taxed."

And that is the dirty little lie of "Tax us!"  It is not really a request to tax us.  It is a request to tax those in my group who don't want to be taxed.

Or, stated differently, "Please use the force of the government (aka the gun) to take money from some other people."  

So, whenever I hear someone say "Tax us!" I view that person as a thief who is not brave enough to perform the act of theft himself...or perhaps as an accessory to theft.  Overall, however, I realize that the person speaking is not trying to give of himself (which is what he wants you to think), but is trying to take from others.



The first time I heard this recently was when I heard of some millionaire in Washington D.C. to try to convince Congress to "Tax us!" (with the us being millionaires).

The second time I heard this was when FoxNews broke a story talking about a proposed "tax on Christmas trees".  I then heard the "local reaction" on WOOD-TV.  The idea was to tax Christmas tree sellers $0.15 per Christmas tree.  This money would go to Washington D.C. and then be used to generically promote Christmas trees.

Now, I don't remember where exactly in the Constitution the clause was for "promoting fresh cut Christmas trees", but when you find it, please let me know.  Besides that obvious problem, isn't a "Christmas" tree specific to a certain religion?  By promoting "Christmas" trees, isn't the government specifically promoting a religion?  I remember reading something somewhere about that not being a good thing.

The initial national story:  http://www.foxnews.com/politics/2011/11/09/merry-christmas-agriculture-department-imposes-christmas-tree-tax/

The initial WOOD-TV story:  http://www.woodtv.com/dpp/news/local/sw_mich/christmas-tree-fee-delay-upsets-growers

The important thing about the local story is that it makes the same argument as the "Tax us!" people.  In the local story you have a local tree grower upset because the government isn't going to tax everyone to pay for a marketing campaign.

So, I have to ask a question.  What would keep all those who wanted to (including the local tree grower in the story) from getting together, paying $0.15 per tree, hiring a marketing firm, and promoting fresh cut Christmas trees from doing so?  The answer is "absolutely nothing at all, except selfishness and a desire to control money/productivity they did not produce".  So, why don't they do it?  Because one grower doesn't want to pay for marketing that may benefit a competitor without the competitor also paying for it?  Or because some tree farms have as much business as they can handle and don't want to do marketing?  Or because some are small enough that they don't want to spend money on marketing?

Who knows exactly.  But what it comes down to is that one part of an industry wants to use the government (aka the gun) to impose a marketing campaign on the rest of the industry who doesn't want it.

Or, stated differently, "Please use the force of the government (aka the gun) to take money from some other people." 



So, whenever you hear someone say "Tax us!", make sure you remember that the person speaking is at heart a thief, not an altruist.

Aloha.

Unemployment Payments and Economic Growth

I read this quote and had to respond:

"The Congressional Budget Office has estimated that each $1 spent on unemployment benefits generates up to $1.90 in economic growth."

First, let me take away any possible suspense on where I stand on this by saying that, while this may be true, it is misleading at best, most likely intentionally misleading, and a blatant lie at worst.



Unemployment benefits are paid out of taxes collected (depending upon how the states choose to do it) by the federal and/or state governments. Those taxes are paid by businesses. Whenever taxes are paid by businesses they are passed along to consumers in the form of increased prices for products. This leaves the business with what it deems a reasonable profit.

What this means is that the average consumer, instead of paying $1.00 for a widget, pays $1.05 for a widget. This also means that the consumer now has $.05 less to buy anything else. So, while we see the consumer buy the widget for $1.05, we don't see the consumer fail to buy the piece of candy for his daughter for $.05. So, the tax has a negative impact upon the economy at least equal to the tax itself.

I say "at least" because the candy maker decides not to produce as much candy. Not only is the one consumer not buying the $.05 candy, but hundreds of other consumers (also impacted by a loss of buying power due to the tax) also don't buy the candy. So, the candy maker decides to not employ one worker for 1 hour. This costs the worker minimum wage of $7.50. That worker doesn't buy $7.50 worth of product and the whole process repeats itself.

As you can imagine, the exact impact upon the economy of a simple $.05 tax is difficult to quantify. However, it is clear that the $.05 tax has a greater impact on the economy than $.05.

This is how the CBO gets to the idea that $1 given to someone for them to spend can have a greater than $1 impact on the economy. They put this process into reverse and try to come up with an estimate (using tons of math) on the positive impact on the economy.

So, you ask, why did I sound so negative in the first place? It sounds like the CBO just did a reasonable thing...right?

No. Whenever a tax is collected, there is a net economic loss. This is always true.

Why? Because whenever the government takes money, runs it through "the system" and then gives it to someone else (or even back to the original payer) there is some cost to "the system". You might start with $1 going in, but when you run it through "the system", you end up with only $.50.

So, the government takes in $1, but only ends up with $.50 to spend, plus they have caused more than $1 harm to the economy.

So, to give away that $1 in unemployment, they have collected $2 and have caused more than $2 worth of harm to the economy.

That is how this statement is misleading. The $1 in unemployment already did more than $2 worth of harm, but now is going to do $1.90 worth of good to the economy.




The CBO should know this and should use even more math to figure out the initial negative impact upon the economy before calculating the positive impact of unemployment payments, and then tell us the whole story.

For example, let's say they determine the $2 in taxes that they collected cost the economy a total of $3.80. Then, they determine that the $1 in unemployment payments will generate $1.90 in economic growth. So, they should report that for every $1 in unemployment payments the economy lost $1.90 overall.

This is why I said earlier that this might be a blatant lie at worst. Most who have studied economics would understand this. Everyone at the CBO should understand this.



The ease of being able to detect the lie is easy, when you take the CBO statement to the (very logical) extreme. If $1 in unemployment payments generates $1.90 in economic growth, why not tax at 100%, pay everyone unemployment, and generate 190% of the economy?

The implication in the CBO statement is that the government (somehow) by taking money from someone and giving it to someone else has helped the economy without actually producing a single thing. Clearly, this belief is a load of crap.





"But that $.50 cost for 'the system' didn't just disappear. When the government takes in $1 it has $1, not $.50. It may use that money to pay salaries or other things. Doesn't that generate economic growth?"

Yes and no. When a government employee is paid, a certain amount is taxed and the rest can be spent. However, no actual economic productivity or growth has happened as a result of the salary paid to the government employee. So while, yes, the government employee is buying things like food, clothes and other items, thereby growing the economy, every penny of that salary came from a tax that was paid (ultimately) by the consumer. So, we run into the same problem with a government employee salary as we do with unemployment payments.

Additionally, every government employee is one that is unavailable for the private sector to employ. "But that doesn't matter in an economy with such high unemployment!" you might say. However, that would be missing the fact that many government employees could be highly skilled individuals who could contribute to actual production, even more so than some other people who are employed. The additional productivity of the otherwise employed government employees would reduce the costs of goods and services.




So, to wrap this up...

Whenever the government unnecessarily (not necessary to improve productivity (and I have never known the government to improve the productivity of anything)) puts its hands into something (or any other person/group unnecessarily puts his/her/their hands into something) there is a net harm to the overall economy. Once the money goes through government hands, there will always be a net loss to the overall economy, even if the government were to turn all money back to the original payers of the tax.


If you would like to learn more, please read Economics in One Lesson:

http://www.amazon.com/Economics-One-Lesson-Shortest-Understand/dp/0517548232/ref=sr_1_1?s=books&ie=UTF8&qid=1320563107&sr=1-1


Aloha.