Liberal Comments on Tax Cuts Reveal Communist Paradigm at Odds with American Capitalism

From the Huffington Post we read the following quote from Nancy Pelosi about the reauthorization of the Bush tax cuts, “‘Republicans have held the middle class hostage for provisions that benefit only the wealthiest 3 percent, do not create jobs, and add tens of billions of dollars to the deficit,’ Pelosi (D-Calif.) has said regarding the deal. ‘To add insult to injury, the Republican estate tax proposal would help only 39,000 of America's richest families, while adding about $25 billion more to the deficit.’"

I hate to ever quote Rep. Pelosi on anything, since she rarely makes any sense. But since I heard the same comments from other Democrats and liberal pundits this time around, I felt it important to address the comment. It points out a few major flaws in the understanding and paradigm of some of the Democratic legislators’ of both Houses perspective on our economic system.

For one, the only way a tax cut can “ADD tens of billions of dollars [and] $25 billion to the deficit,” respectively, is if Representatives plan to continue spending those billions as if they were still in revenues. The whole idea is to allow Americans to spend and invest their money, rather than the government. The problem is not the tax break. It is the expectation that all will continue as planned without thought to modifying behavior. It is the same as saying, a breadwinner who decides to put aside money for his or her children's college education is creating debt to their household, because they plan to spend the same amount of money, irrespective of putting some aside for someone else. That makes no responsible sense.

Moreover, the claim that the tax break benefiting “only the wealthiest 3 percent,” (assuming that is accurate), will not create jobs is a paradigm a socialist would make, because it assumes that it is the government that creates jobs, not people. This is absolutely false in a free market—capitalist system such as ours. The very name, capitalism implies precisely what that wealthy group will do—provide capital. That means, investing in buildings, machinery and other assets including human capital—more jobs.

To say that allowing Americans to control there own money is not going to help the economy speaks volumes about the socialistic mindset of those saying it. It is to completely ignore the fact that Americans make the economy run—not the government. This brings us to one more statement—a criticism by Democrats about “trickle down economics.” It is said that it does not work. I agree.

I’ll explain: Trickle down economics implies that the money is the federal government’s to begin with. Again, a socialistic point of view—even to the extreme of communism, where the government owns all, including the incomes of all people; and, even the people themselves. Trickle down economics means money comes from the government to the people. That paradigm has beguiled us into believing, unwittingly, in a socialistic perception of our economic system, by feeling a sense of gratitude to the government for giving us back our own money, or allowing us to keep a certain amount of it, rather than taking all of it.

Indeed, the reality in our capitalist system and our republican form of government, is that there is no such thing as “trickle down economics.” The money and assets are ours. Money is paid UP to the government. Whether constitutionally appropriate or not, is not the debate this time around. The point is, money goes up the rungs, not down. It was never theirs to begin with. Nor is the balance after taxes.

To apply “trickle down economics” to companies is the same. Allowing companies to keep more of their money, thus their effect eventually reaches the smallest of budgets, is, again, a system that does not exist. It is the typical American that keeps businesses going. Patronage, trust and competition, IE: choices, are what provide economic acumen to businesses, big and small. Again, the flow is from the bottom up, not the other way around. The government reducing the tax burden is not a gift. It is to step out of the way, rather than being the major competitor to the free market, to companies and individual consumers.

One last issue: I sincerely hope that Pelosi is correct that the tax break will help 39,000 of America’s richest families.” That would mean, 39,000 of America’s most able companies will be hiring employees. Thirty-nine thousand businesses will have more leverage to improve our country’s economy! 39,000! Does Pelosi actually realize what she said?