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    Monday
    Nov262012

    Obsession with taxes

    The easiest part of the Grand Bargain everyone is ostensibly seeking in DC is to raise tax, but the fundamental solution that eludes those in power is economic growth -- all other solutions without growth are counterproductive.

    We should be on the way to economic growth but progressives have a point to make. They aren't going to capitulate to the Bill Clinton Strategy of going along with market principles to create economic growth, even though much of the growth was the dotcom bubble, because in this politically heated environment it would appear that Romney won after all, he just didn't get to move into the White House. Progressives are using their stay in power to make fundamental changes regarding the role of government in the economy, which really means the role of government, period, since everything we do is related to the economy in one way or another.

    Progressives will not ruin their opportunity to shine by capitulating to free market principles -- however, what they are doing is harmful to our economy. Obviously progressives believe that government investment will create enough economic growth to pay for an expanded welfare state that will keep the unemployed comfortable until a better social arrangement can be made -- in the meantime, Obama and his gang of progressives will design our statist system to accomplish their goals of social justice.

    The welfare state has already exanded, but ACA has not kicked in so there's a long way to go, and this is why raising taxes is such an obsession. There's no way a small tax hike on millionaires&billionaires will be enough to fund the progressive transformation, so they'll have to come back at some point with a carbon tax or value-added tax. Government has to shift a huge amount of money from the private sector to government in order to achieve their goals.

    Unless there's an intense and vigilant public reaction to extended unemployment and worsening economic problems, I don't expect any government interventions to create economic growth.

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